MIRA INFORM REPORT

Report Date :

23.02.2008

IDENTIFICATION DETAILS

Name :	SI GROUP – INDIA LIMITED (w.e.f. 13.09.2006)
Formerly Known As :	SCHENECTADY HERDILLIA LIMITED
Registered Office :	Plot No.2/1, TTC Industrial Area, Thane-Belapur Road, Navi Mumbai 400 703, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	01-07-1963
Com. Reg. No.:	11-12674
CIN No.: [Company Identification No.]	L99999MH1963PLC012674
TAN No.: [Tax Deduction & Collection Account No.]	MUMS04774A
PAN No.: [Permanent Account No.]	AAACH7323L
Legal Form :	It is a public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing and Marketing of various chemical products.

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 5374000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track. Directors are reported as experienced and respectable businessmen. Trade relations are 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/ Works/ Import and Export Department :	Plot No.2/1, TTC Industrial Area, Thane-Belapur Road, Navi Mumbai 400 703, Maharashtra, India
Tel. No.:	91-22-66732000 / 01/ 2768 3328/ 27681153/ 27681154/ 2761 1508 (Export)
Fax No.:	91-22-27671848/ 2768 5653/
E-Mail :	shl.Navi-Mumbai@siigroup.com , factory@herdillia.com shl.Export@siigroup.com , shl.Import@siigroup.com
Website :	http://www.herdillia.com
Corporate Office :	Air India Building, 13^th Floor, Nariman Point, Mumbai - 400 021, Maharashtra, India.
Tel. No.:	91-22-2024224/4279/4378/285 3932/3
Fax No.:	91-22-2042379
E-Mail :	herdillia@herdillia.com shl.mumbai@siigroup.com

DIRECTORS

Name :	Mr. R. M. Pandia
Designation :	Vice Chairman and Managing Director
Name :	Mr. Daniel Paul Tilley
Designation :	Chairman
Name :	Mr. G. C. Vasudeo
Designation :	Alternate Director to Ms. Heather Ward and Director – Finance and Executive Vice President – Operations and Human Resources and Community Development
Name :	Mr. Suresh N Talwar
Designation :	Alternate Director to Mr. A Malcolm MacCormick
Name :	Mr. Richard Barlow
Designation :	Director
Name :	Mr. B. V. Bhargava
Designation :	Director
Name :	Mr. P. N. Ghatalia
Designation :	Additional Director
Name :	Mr. Ravindra V Nagarkar
Designation :	Director
Name :	Mr. B. Chakrabarti
Designation :	Director
Name :	Mr. A Malcolm MacCormick
Designation :	Director
Name :	Ms. Heather Ward
Designation :	Director
Name :	Mr. K Shankar
Designation :	Executive Vice President – Marketing
Name :	Mr. P S Kumbhar
Designation :	General Manager – R and D
Name :	Mr. S S Gokhale
Designation :	General Manager – Exports

BUSINESS DETAILS

Line of Business :

Manufacturing and Marketing of various chemical products.

Products :

Item Code No. (ITC Code)	29071101
Product Description	Phenol
Item Code No. (ITC Code)	29141100
Product Description	Acetone
Item Code No. (ITC Code)	29173500
Product Description	Phthalic Anhydride

Exports :

Products :

Diacetone Alcohol, Nonyl Phenol, Dedecyl Phenol, Para Cumyl Phenol, Para Octyl Phenol, Diphenyl Oxide, Isophorone, Hexylene Glycol, Acetophenone, ISO Butyl Benzene, Hersol, Alpha Methyle Styrene, Unsaturated Dimers of Alpha Methyle Strene, Pthalic Anhydride

Countries :

China, Finland, Nigeria, Chile, Australia, Dubai (UAE), Germany, South Africa, Venezuela, Hongkong, Netherlands, Indonesia, Russia, Iran, Switzerland, Japan, United Kingdom, Korea, Malaysia, Philippines, Saudi Arabia, Singapore, Thailand, Taiwan and USA

Imports :

Products :

Cumene, Ortho-Xylene, Propylene Trimer, Propylene Tetramer, Di-isobutylene

Countries :

Europe and Far East countries

GENERAL INFORMATION

No. of Employees :	About 697
Bankers :	* State Bank of India * Bank of Baroda * ABN Amro Bank N. V. * Credit Lyonnais * HDFC Bank Limited

Banking Relations :	Good
Auditors :
Name :	BSR and Company Chartered Accountants
Certification :	ISO 9001 : 2000,  ISO 14001 : 2004 as well as OHSAS 18001
Associates :	* Herdillia Unimers Limited * Herdillia Oxides and Electronics Limited * Maharashtra Polybutenes Limited
Subsidiaries :	* Herdillia Investments Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
60000000	Equity Shares	Rs.10/- each	Rs.600.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
42306300	Equity Shares	Rs. 10/- each	Rs. 423.063 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		423.100	423.100	423.100
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		920.500	920.100	804.500
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1343.600	1343.200	1227.600
LOAN FUNDS
1] Secured Loans		957.600	761.300	171.000
2] Unsecured Loans		1099.300	646.200	1098.100
TOTAL BORROWING		2056.900	1407.500	1269.100
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		3400.500	2750.700	2496.700
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1538.600	1338.000	1135.700
Capital work-in-progress		129.100	109.300	206.000
INVESTMENT		10.800	10.900	11.400
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1491.000	1152.700	1257.100
	Sundry Debtors	1155.700	938.300	1127.700
	Cash & Bank Balances	9.000	127.400	28.700
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	600.400	563.500	310.300
Total Current Assets		3256.100	2781.900	2723.800
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	1444.600	1398.300	1557.800
	Provisions	89.500	91.100	22.400
Total Current Liabilities		1534.100	1489.400	1580.200
Net Current Assets		1722.000	1292.500	1143.600
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		3400.500	2750.700	2496.700

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		6881.100	5851.000	8066.100
Other Income		188.100	516.000	386.800
Total Income		7069.200	6367.000	8452.900
Profit/(Loss) Before Tax		(25.000)	68.500	317.000
Provision for Taxation		(26.000)	(50.900)	120.400
Profit/(Loss) After Tax		1.000	119.400	196.600
Expenditures :
	Raw Materials	4466.200	4050.200	5323.000
	Excise Duty	807.600	682.800	970.100
	Power & Fuel Cost	575.200	485.100	507.900
	Other Manufacturing Expenses	297.200	245.000	324.100
	Employee Cost	293.200	280.400	335.600
	Selling and Administration Expenses	170.400	150.900	219.700
	Miscellaneous Expenses	200.400	204.600	211.400
	Interest & Financial Charges	152.900	91.900	117.600
	Depreciation	131.100	107.600	126.500
Total Expenditure		7094.200	6298.500	8135.900

QUARTERLY RESULTS

Particulars	31.12.2007	30.09.2007	30.06.2007
Type	3^rd Quarter	2^nd Quarter	1^st Quarter
Sales Turnover	1620.900	1536.500	1724.000
Other Income	10.700	15.800	30.700
Total Income	1631.600	1552.300	1754.700
Total Expenditure	1516.600	1463.200	1557.000
Operating Profit	115.000	89.100	197.700
Interest	34.900	41.400	51.600
Gross Profit	80.100	47.700	146.100
Depreciation	32.600	36.000	37.700
Tax	6.100	2.100	13.300
Reported PAT	21.800	9.600	54.900

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt Equity Ratio	1.29	1.05	1.50
Long Term Debt Equity Ratio	0.57	0.36	0.23
Current Ratio	1.22	1.14	0.89
TURNOVER RATIOS
Fixed Assets	2.60	2.51	3.00
Inventory	5.21	4.86	6.88
Debtors	6.57	5.66	7.33
Interest Cover Ratio	0.81	(1.72)	3.70
Operating Profit Margin (%)	3.70	(0.86)	6.96
Profit Before Interest and Tax Margin (%)	1.80	(2.70)	5.39
Cash Profit Margin (%)	1.86	(1.45)	4.01
Adjusted Net Profit Margin (%)	(0.05)	(3.28)	2.44
Return on Capital Employed (%)	4.02	(6.04)	16.07
Return on Net Worth (%)	(0.25)	(15.02)	18.15

LOCAL AGENCY FURTHER INFORMATION

The Registered Office of the company has been changed from Air India Building, 13^th Floor, Nariman Point, Mumbai - 400 021, Maharashtra to the present w.e.f. 18.02.2005.

HISTORY

The company was incorporated on 1^st July, 1963 at Mumbai in Maharashtra having Company Registration Number 12674.

Subject was promoted in 1965 by EID-Parry (India),Chennai, in collaboration with Distillers Company, UK, and Hercules Power, US, It was earlier known as Herdillia Chemicals. It manufactures heavy organic chemicals such as phenol, cumene, acetone, diacetone alcohol, phthalic anhydride, phthalates and their derivatives. In Mar.'65, subject entered into an agreement with Distillers Company to supply technical information for manufacturing phenol, cumene, diacetone alcohol and phthalates.

In 1984, the interests of EID-Parry were taken over by Duncans Agro Industries and it is now a part of the Goenka-Duncan group. In 1994, the company entered into a strategic alliance with Bayer, Germany, for setting up a facility to produce heat transfer media. The heat transfer media plant was commissioned in Feb.'94. The isophorone plant was commissioned in Apr.'94. The company expanded phenol capacity from 20000 tpa to 22500 tpa in a phased manner.

In 1994-95, subject increased the capacity for IBB from 1000 tpa to 2000 tpa. It received the ISO 9002 certification from BVQI in Dec.'95. 

During 1995-96, subject increased the capacity for DPO, phenol and acetone to 3000 tpa, 24000 tpa and 14400 tpa respectively. HCL has set up a greenfield plant to produce 1 lac tpa of phenol and 60000 tpa of acetone at Dahej, Gujarat. 

The company further increased the capacities of the Phenol, Acetone, Iso Butyl Benzene and Isophorone plant to 26,500, 16,170, 2,500 and 2,500 MT in the year 96-97. It has set up a captive cogeneration plant. The capacity of Phenol and Acetone plants was increased to 34,000 and 20,400 MT/year respectively in the year 1999-2000.  

The company was renamed Schenectady Herdillia consequent to acquistion of 81.19% of equity capital by Schenectady (India) Holdings Ltd during April 2002. Consequent to the approval by Hon'ble Bombay High Court, Schenectady Specialities Asia Private Ltd was merged with the company with effect from 28th Noember, 2002 and the appointed date was 27th September,2002.

OPERATIONS REVIEW: 

The sales turnover at Rs. 6880.000 millions was higher by 18% compared to the previous year. The increase in turnover was mainly due to the improved performance of the Company in the domestic and export markets. 

CHANGE OF NAME: 

Having received the requisite approvals, the name of the Company was changed from Schenectady Herdillia Limited to SI Group - India Limited with effect from September 13, 2006. 

PRODUCTION: 

Total production during the year ended March 31, 2007 at the Navi Mumbai unit was 110014 MT, being higher by 12% compared to 97649 MT during the previous year. 

New annual production records were established in respect of Diacetone Alcohol, Isobutyl Benzene and Isophorone.

In the year, the Cumene Zeolite project was successfully completed in the month of January, 2007. This project has made the Company self sufficient in its requirement of Cumene, which is the intermediate for Phenol and Acetone. 

Production at the Rasal unit was 17894 MT as against 19421 MT during the previous year, a decrease of 8%. This was partly due to severe competition in Asian markets for Nonyl Phenol. 

The Solid Fuel Hot Oil unit and Cogeneration plants were commissioned during the year. These will reduce energy costs and result in improving the performance of the unit.

The Lote unit continued its encouraging performance and the volumes showed an upward trend from 2576 MT to 4245 MT production, an increase of 65%. 

The combined production at the Navi Mumbai, Rasal and Lote units was 132153 MT as against 119646 MT in the previous year, recording an increase of 10%. 

SALES AND EXPORTS:

During a major part of the year under review, prices of the Company's commodity products continued to be depressed on account of new large capacities which came up in Asia. With high prices of raw materials, driven by high crude oil prices, profitability was under severe pressure.

During the year, exports were at Rs. 1210.000 millions FOB, as against Rs. 1000.000 millions during 2005-06. 

FINANCE: 

Company did not accept any fresh deposits or renew any existing deposits from the public or shareholders during the year. As of March 31, 2007, 47 deposits aggregating Rs. 0.687 million had matured for payment but not been claimed by the depositors. 

The following products of the Company, viz. Phenol Acetone, Diacetone Alcohol and Performance Resins, come under the purview of Cost Accounting Records (Chemical Industries), Rules, 1987. However, cost audit in respect of only Acetone, Diacetone Alcohol and Performance Resins is applicable to the year under reference. The Company has maintained relevant records and the cost audit is in progress.

In respect of capitalization of the Para Tertiary Butyl Phenol (PTBP) Project during the previous Accounting Year, the Company is not in agreement with the view of the Auditors. The Company believes that the Capital Work-In-Progress taken over from Schenectady Specialities Asia Private Limited (since merged with the Company), amounting to Rs. 99.000 millions is valuable to the Company in the PTBP Project. Accordingly and also based on expert opinion, the said amount was capitalized in the books of the Company without any adjustments as per the Scheme of Amalgamation approved by the Hon. Bombay High Court in the year 2002. 

The Company has initiated the process of obtaining approval of the Central Government for excess remuneration paid / payable to the Managing Director. 

An amount of Rs. 44.900 millions, being the expenditure incurred towards repairs/replacement of assets at the Company's Navi Mumbai plant damaged due to flood in the year 2005, net of 'on account' payment received from the insurance company, is further receivable by the Company. The Company has initiated arbitration proceedings for settlement of the claim and necessary adjustments will be made upon settlement of the claim.

A report on Corporate Governance in terms of Listing Agreement and a note on Management Discussion and Analysis with respect to the Company's business are provided in the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS: 

BUSINESS OF THE COMPANY:

The Company is engaged in the manufacture and marketing of organic chemicals and phenolic resins that find a wide range of industrial applications. There is no segmentation of products manufactured by the Company. Applications of these products cover laminates, tyres, resins, plasticizers, paints, surfactants, pharmaceuticals, lubricating oil additives, surface coating, paper and downstream chemicals. The Company has three manufacturing units situated at Navi Mumbai, Rasal and Lote.

REVIEW OF OPERATIONS: 

Capacity utilization was higher at 76% during the year under review as against 72% in the previous year. 

The Cumene Zeolite project was successfully commissioned in the month of January, 2007. This has helped make the Company self-sufficient in this vital intermediate. Solid fuel based hot oil unit and power generation plant have also commenced during 2006-07. 

Sales turnover of Rs. 6880.000 millions (including excise duty) was higher by 18%. Exports aggregated Rs. 1210.000 millions, 21% higher over the previous year. 

Phenol and Acetone continued to face severe competition from imports on account of new larger capacities which came up in Zia. While selling prices were volatile during the year, margins were under pressure due to steep increase in input costs. This partly reflects the cyclicity of the commodity chemical business. 

The total operating cost, excluding depreciation and interest, aggregated Rs. 5877.200 millions as compared to Rs. 5475.200 millions during the previous year, an increase of 7%. This increase was largely on account of higher cost of raw materials and energy.

PBIDT to sales ratio was 4%, same as in the previous year. 

Staff cost was Rs. 307.600 millions compared to Rs. 292.600 millions in the previous year, an increase of 5%. 

The cost of fuel, power and water was Rs. 575.200 millions -19% higher than in the previous year, due to increases in energy costs globally.

Interest cost at Rs. 142.900 millions was significantly higher compared to Rs.56.500 millions during the previous year because of additional borrowings for projects and increase in interest rates. 

Other income was Rs. 54.100 millions (compared to Rs. 539.800 millions for the pervious year, which included profit on sale of leasehold land (Rs. 318.600 millions), export incentives (Rs. 46.700 millions) and insurance claim on loss of profit (Rs. 80.300 millions) following flooding at the Navi Mumbai site.

Profit/ (Loss) before tax (PBT) and profit after tax for the year were Rs.(24.300 millions) and Rs. 1.000 million respectively, as against Rs. 68.600 millions and Rs. 119.400 millions for the previous year.

Earning per equity share (EPS) was Rs. 0.02 for the year under review as against Rs. 2.82 for the previous year. 

TAXATION: 

Provision for Income Tax at Rs. Nil has been made as per the Income Tax Act. Deferred tax credit on carried forward losses for the year was Rs.32.300 millions as against Rs. 61.800 millions during the previous year. 

Provision has been made for taxes for earlier years amounting to Rs. 2.900 millions (net). Fringe benefit tax for the year was Rs. 3.400 millions as against Rs. 12.100 millions in the previous year. 

KEY STRENGTHS AND GROWTH DRIVERS:

The Company continues to upgrade manufacturing technology, process hardware and operating parameters at its three sites. The Company is a very well established reliable manufacturer of organic chemicals and resins in the market through its sustained efforts and emphasis on product quality, continuing improvements, introduction of new products through in-house development, creation of customer preference and competitive pricing. The Company's R&D efforts are aimed at process improvements to maximize efficiencies as also development and engineering of new processes for high value speciality chemicals based on existing products, processes and synergies. 

INDUSTRY STRUCTURE AND DEVELOPMENTS: 

Company has been in the business of manufacturing basic organic chemicals viz. Phenol, Acetone, and Phthalic Anhydride as also derivatives such as PNP, PDDP DAA, IPH, AMS-Dimers, etc. These chemicals have a wide range of applications as detailed earlier.

Chemical industry being highly capital intensive, typically sees large capacity plants being set up elsewhere in the world to avail of economies of scale. This, in turn, leads to periods of over-capacity and cyclicity.

The Phenol and Acetone business went through this phase in 2005 and 2006 due to excess capacity in the region. 

While this resulted in depression in selling prices, there were steep increases in the costs of raw materials and energy, which are driven by crude oil prices. Consequently, margins were under pressure and there were large volumes of low priced imports. 

The Government of India continued with its policy of reducing tariffs and since there has not been a commensurate improvement in infrastructure and transaction costs, it further aggravated profitability of chemical companies. The other area of concern is the strength of the rupee vis-a-vis other currencies, which has seen very sharp movements.

BUSINESS OUTLOOK: 

The Cumene Zeolite Project, which was commissioned in January 2007, has fully stabilized and the Company has started realizing the benefits envisaged.

The change in the fuel mix and captive power generation at Rasal have also resulted in lower production cost. 

The Government of India has levied provisional anti-dumping duty on imports of Acetone and is in the process of considering applications for levy of duties on Phenol and Nonyl Phenol. These, it is hoped, will offset to some extent the erosion of prices due to dumping and lower tariffs. 

The introduction of two new products during the year, exclusively for exports, has added to the Company's range and their volumes are expected to grow in future.

The Company is also actively working on alternate sources of some key raw materials which were in short supply. 

Fixed Assets

* Leasehold Land and Development

* Buildings

* Plant and Machinery

* Furniture and Fixtures

* Equipments

* Vehicles

All the manufacturing units have been certified to ISO 9002 standard by the internationally renowned Certifying Agency Bureau Verita Quality International.

The company has developed and established systems to ensure sound environmental performance. Its environmental management systems are certified to ISO 14001 by VBQI Since January 1998.

AS PER WEB:

Profile

Subject is a part of Schenectady International Group, Inc.  is a leading producer of petrochemicals in India having technological tie-ups with several large international corporations.

Schenectady International Group, Inc.  is a global leader in alkylphenols, phenolic resins, and electrical insulation coatings. It has 25 manufacturing facilities spread over 14 countries. Of these there are two sites in India for the manufacture of chemicals, viz. Schenectady Herdillia Limited and Schenectady Specialities Asia Private Limited, both in the vicinity of Mumbai.

A customer driven company, Schenectady Herdillia's wide range of quality products is well accepted globally and has been accredited by BVQI with the ISO 9001 : 2000, ISO 14001 : 1996 and OHSAS 18001 : 1999 certifications.

Schenectady Herdillia's inherent strength lies in its wellhoned R&D capability which has earned it worldwide recognition and national awards, making it a major contributor in the evolution of the Indian speciality chemical industry.

The Company's plants for Cumene, Phenol, Acetone, Diacetone Alcohol, Phthalic Anhydride, and Phthalate plasticisers were set up at Thane-Belapur, Navi Mumbai, in collaboration with leading international licensors such as UOP, BP Chemicals, Hercules and Scientific Design. Commercial production was established in 1968.

During the following years, the capacities of these palnts were steadily expanded and the company setup new facilities for the manufacture of wide range of specialty chemicals.

The Company has since made considerable progress in terms of production volumes, plant operation, market development, R&D, pollution control, expansion and diversification and in keeping with its high customer oriented profile, is rated among the leading petrochemical companies in India.

Quality Assurance

subject received ISO 9002 : 1994 certification for the first time in 1995 and currently all the manufacturing units have been Certified to ISO 9001 : 2000 Standard by the internationally renowned Certifying Agency 'Bureau Veritas Quality International' (BVQI).

The Company is a signatory to the Responsible Care^®   programmer which aptly reflects its commitment towards maintaining high levels of standards in the area of Safety, Health & Environment.

The Company has developed and established systems to ensure sound environmental performance. Its environmental management system is certified to ISO 14001 : 2004 by BVQI since January 1998, which was subsequently upgraded to ISO 14001 : 2004 on 19th April 2006. Also its Occupational Health and Safety system is Certified to OHSAS 18001 : 1999 by BVQI since march 2004.

Subject's continuing thrust on customer orientation and environment protection has seen it emerge  as the first company in India bound by the principles of Responsible  Care^® and certification under
ISO 9001 : 2000,  ISO 14001 : 2004 as well as OHSAS 18001 .

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.39.91
UK Pound	1	Rs.78.44
Euro	1	Rs.59.13

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
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	7
--CREDIT LINES	1~10	7
--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

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