MIRA INFORM REPORT

Report Date :

06.06.2008

IDENTIFICATION DETAILS

Name :	SHARDA MOTOR INDUSTRIES LIMITED
Registered Office :	D-188, Okhla Industries Area, Phase-1, New Delhi;110020
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	29.01.1986
Com. Reg. No.:	55-023202
CIN No.: [Company Identification No.]	L74899DL1986PLC023202
TAN No.: [Tax Deduction & Collection Account No.]	DELS03725B
Legal Form :	Public Limited Liability Company. The company shares are listed on the Stock Exchange.
Line of Business :	Manufacturer and Supplier of Components to automotive and White Goods.

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 5000000
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 at usual trade terms and conditions.

LOCATIONS

Registered Office :	D-188, Okhla Industries Area, Phase-1, New Delhi;110020, India
Tel. No.:	91-11-26811957 / 58 / 26811967 / 68 / 26816195
Fax No.:	91-11-26811678 / 26811676
E-Mail :	smil@shardamotor.com
Website :	http://www.shardamotor.com
Factory :	v Plot No.4, Sector 31, Kasna Industrial Area, Greater Noida, Uttar Pradesh, India Tel. No: 91-120-2341258/9 Fax No: 91-120-2341257 Email: smilkorin@shardamotor.com v Plot No. 558-559, Surajpur Bypass Industrial Area, Greater Noida, Uttar Pradesh, India v Exhaust System Division: G-20, SIPCOT Industrial Park, Irrungattukottai, Sriperumbudur – 602105, Tamilnadu, India Tel.No: 91-411-256092/95 Email: smilchennai@shardamotor.com v Exhaust & Suspension Division: Plot No. 112, M.I.D.C. Satpur, Near Mahindra and Mahindra Plant, Nashik, Maharashtra, India Tel. No: 91-253-2364451/2364452/2364453 Email: smilnsk@shardamotor.com v Plot No. 276, Udyog Vihar, Phase – VI, Gurgaon, Haryana, India

DIRECTORS

Name :	Mr. N D Relan
Designation :	Chairman
Date of Birth/Age :	31^st May 1929
Date of Appointment :	29^th August 1986
Name :	Mr. Ajay Relan
Designation :	Managing Director
Date of Birth/Age :	3^rd December 1961
Date of Appointment :	29^th January 1986
Name :	Mr. Sharda Relan
Designation :	Director
Date of Birth/Age :	11^th August 1935
Date of Appointment :	29^th January 1986
Name :	Mr. Rohit Relan
Designation :	Director
Date of Birth/Age :	2^nd July 1955
Date of Appointment :	25^th May 1991
Name :	Mr. R P Chowdhry
Designation :	Director
Date of Birth/Age :	11^th May 1925
Date of Appointment :	29^th August 1986
Name :	Mr. R P Kapur
Designation :	Director
Date of Birth/Age :	2^nd October 1927
Date of Appointment :	29^th August 1986
Name :	Mr. S P Marwaha
Designation :	Director
Date of Birth/Age :	11^th January 1928
Date of Appointment :	29^th August 1986
Name :	Mr. G L Tandon
Designation :	Additional Director
Name :	Mr. O P Khaitan
Designation :	Additional Director
Name :	Mr. Kishan N Parikh
Designation :	Additional Director
Name :	Mr. S C Chopra
Designation :	Executive Director
Date of Birth/Age :	6^th October 1944
Date of Appointment :	1^st June 2004
Name :	Mr. Udayan Banerjee
Designation :	Executive Director
Date of Birth/Age :	15^th January 1947
Date of Appointment :	1^st June 2004

KEY EXECUTIVES

Name :	Mr. Nitin Vishnoi
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (as on 31.03.2005)	No. of Shares	Percentage of Holding
Indian Promoters	2405738	80.92
Private Corporate Bodies	50375	1.69
Indian Public	517050	17.39
Total	2973163	100.00

BUSINESS DETAILS

Line of Business :	Manufacturing and Supply of Components to automotive and White Goods.
Products :	v Exhaust Systems v Catalytic Converters (for four wheelers) v Independent Front Suspensions v Canopies v Seat Covers v Seat Frames (for four wheelers) v Assembly of Rear Automotive Suspensions v Powder Coated Pressed Parts v Plastic Flexible Hose Pipes
Imports :
Products :	leather, accessories and other automotive components

PRODUCTION STATUS

Particulars	Unit	Actual Production
Soft Top and Canopies	Pieces/Set	29609 (19147)
Seat Covers	Pieces/Set	228406 (204652)
Exhaust System and Other Automotive Components	Pieces	3079069 (1443234)

GENERAL INFORMATION

Customers :	v Tata Motors Limited v Samsung India Limited v Mahindra and Mahindra Limited v LG India Limited v Hyundai Motor Industries Limited v General Motors India v Bharat Seats Limited v Maruti Udyog Limited
No. of Employees :	537
Bankers :	v Canara Bank v Citi Bank v Punjab National Bank v Industrial Development Bank of India The company has availed Term Loan from Industrial Development Bank of India (IDBI))
Banking Relations :	Good
Auditors :
Name :	S R Dinodia and Company Chartered Accountants
Associates/Subsidiaries :	v Relan Group Profile: It is a diversified, multi-product Rs. 5000 millions (approximately) group of Companies, with expertise in manufacturing and supply of components to automotive and White goods manufacturers. v Bharat Seats Limited (BSL) Profile: It is a joint venture between Suzuki Motor Corporation and Maruti Udyog Limited for manufacturing and supplying automotive Seat assemblies to the latter. The Company has benefited as a joint venture between the very best in the field – Suzuki Motor Corporation of Japan. Technical guidance has been provided by Houwa Kogyo Company Limited, a leading producer of hi-tech seating system for the automobile industry in Japan, and the main suppliers to Suzuki Motor Corporation. It has set up a manufacturing unit for PU Headrests within its existing plant with a capacity to produce 0.400 million sets per annum. v Relan Industrial Finance Limited (RIFL) Profile: It is engaged in Financing of Industrial Enterprises, Portfolio Management and Stock/Share broking. The Company is Member of National Stock Exchange, O.T.C.E.I. and Delhi Stock Exchange. n Sharda Enterprises n Sharda Pro-Acoustics

CAPITAL STRUCTURE

(As on 31.03.2007):-

Authorised Capital :

No. of Shares	Type	Value	Amount
25000000	Equity Shares	Rs.10/- each	Rs.250.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5946326	Equity Shares	Rs.10/- each	Rs.59.463 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		59.500	59.500	29.700
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		748.300	592.800	483.900
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		807.800	652.300	513.600
LOAN FUNDS
1] Secured Loans		287.600	101.400	27.800
2] Unsecured Loans		0.000	2.800	37.500
TOTAL BORROWING		287.600	104.200	65.300
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		1095.400	756.500	578.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		904.800	598.500	515.000
Capital work-in-progress		64.900	25.900	6.000
INVESTMENT		13.900	36.500	15.800
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	234.300	220.600	221.000
	Sundry Debtors	430.600	347.100	261.300
	Cash & Bank Balances	12.100	5.600	18.400
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	371.500	293.900	187.300
Total Current Assets		1048.500	867.200	688.000
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	627.400	502.100	469.400
	Provisions	311.600	273.200	181.500
Total Current Liabilities		939.000	775.300	650.900
Net Current Assets		109.500	91.900	37.100
MISCELLANEOUS EXPENSES		2.300	3.700	5.000
TOTAL		1095.400	756.500	578.900

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		3675.900	2996.500	2375.900
Other Income		60.700	8.400	7.000
Total Income		3736.600	3004.900	2382.900
Profit/(Loss) Before Tax		321.100	256.300	239.200
Provision for Taxation		96.900	77.200	86.300
Profit/(Loss) After Tax		224.200	179.100	152.900
Expenditures :
	Raw Materials	2178.100	1775.800	1299.200
	Excise Duty	632.900	508.300	412.100
	Power & Fuel Cost	38.500	31.700	26.300
	Other Manufacturing Expenses	151.300	104.500	97.000
	Increase/(Decrease) in Finished Goods	[11.100]	[17.900]	[1.400]
	Employee Cost	108.900	84.900	68.300
	Selling and Administration Expenses	190.200	155.600	149.700
	Miscellaneous Expenses	24.600	24.800	26.200
	Financial Charges	8.800	6.400	5.400
	Depreciation	93.300	74.500	60.900
Total Expenditure		3415.500	2748.600	2143.700

KEY RATIOS

Year	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	0.27	0.15	0.12
Long Term Debt-Equity Ratio	0.16	0.07	0.12
Current Ratio	1.02	1.03	0.98
TURNOVER RATIOS
Fixed Assets	3.20	3.43	3.34
Inventory	16.16	13.57	14.44
Debtors	9.45	9.85	11.46
Interest Cover Ratio	31.43	41.05	45.30
Operating Profit Margin(%)	10.06	11.25	12.86
Profit Before Interest And Tax Margin(%)	7.52	8.77	10.30
Cash Profit Margin(%)	7.63	8.46	9.00
Adjusted Net Profit Margin(%)	5.09	5.98	6.44
Return On Capital Employed(%)	29.97	39.60	48.83
Return On Net Worth(%)	25.64	30.72	33.68

LOCAL AGENCY FURTHER INFORMATION

TRADE REFERENCES:

· Sejong Industrial Company Limited, Korea – Exhaust Systems

OPERATIONS: 
During the year the Company achieved yet another milestone and the turnover and inter unit transfers of the Company touched an all time high of Rs. 4046.400 millions as against Rs. 3198.800 millions for the previous financial year registering an increase of 26.50% over the previous year's turnover. 

EXTERNAL COMMERCIAL BORROWINGS (ECB): 

During the year, the Company has been sanctioned external commercial borrowing for US$ 7.50 million from ICICI Bank Limited., for the purpose of meeting expenditure towards ongoing expansion / modernization programmes of the Company. And out of the said US$ 7.50 million, the Company has received US$ 5.00 million during the year. 

AWARDS AND RECOGNITIONS: 

The company received the awards and recognitions during the year 2006-07. 

- Best Supply Chain Management (SCM) Award across the automobile sector from Mahindra and Mahindra Limited. - Supplier Quality Control Innovation (SQCI) - A Grade Company Award from Samsung India Electronics Limited. 

- Quality Innovation Award from Hyundai Motor India Limited

FUTURE PLAN OF ACTION: 

Steps are continuously being initiated to strengthen the existing research projects in hands and to undertake' new research and development assignments with an objective of efficient utilization of raw material, cost optimization of existing products and production of better quality products including new product development. 

INDUSTRY STRUCTURE, DEVELOPMENTS AND OUTLOOK: 

Three consecutive years of high growth clearly signals that the Indian Economy is moving onto a higher growth trajectory. Early indicators for 2007-08 also suggest another year of high growth of around 8-9 percent. And all agree that a compound annual growth rate of 8 percent needs to be sustained over a longer period of time. If that were to happen for a decade or more, it would result in significant structural changes like higher literacy rates, increased employment opportunities, higher growth in earning patterns and wider spread of the automobile industry. 

During the year 2006-07, the Indian economy scaled new heights and continued its high growth performance and played a predominant role and the GDP registered a remarkable growth rate as indicated in the monetary policy of RBI. The worldwide economic boom also gave a fillip to all important sectors of industry including automotive sector. Industrial recovery firmed up and broadened, driven mainly by manufacturing sector. Stock markets were buoyant with the Indian bourses outperforming many international stock indices. The buoyancy in the Automotive Industry during the year 2006-07, was aided by productivity gains, cost cutting by corporates, trade expansion and financial stability. The rupee has got stronger against USD during the year. With increase in inflation rate, interest rates were high during the year as compared to previous year's races. The Union Budget 2007 presented in the Parliament, contains a hike in the Education Cess and has cut down the Central Sales Tax by 1% respectively. 

During the year 2006-07, the Company has achieved another milestone and has been able to touch the turnover to the tune of Rs. 4046.400 millions as against Rs. 3198.800 millions for the previous financial year registering an increase of 26.50% against an expectation of 10%. 

The thrust being placed by the Government on the development of infrastructure and manufacturing sectors should result in an impressive growth in the automobile industry too. Companies are now placing greater emphasis on product innovation, technology, process improvement and operational efficiency to combat the rising trend witnessed in the prices of raw materials and other inputs, which continues to be an area of concern. In this prevailing environment, the Company continues to follow its philosophy to provide the highest quality products to its customers and the Company projects a further growth of 7.5% in its turnover for the next financial year 2007-08. The company has set up a new production unit at Nashik which has commenced commercial production and also in process of setting up of new manufacturing unit at Chennai as a part-of its ongoing expansion plan. 

OPPORTUNITIES and THREATS: 

Opportunities and threats are two sides of the same coin in this industry. In view of anticipated investments in automotive sectors, it is expected that the demand for the Company's products will continue to increase. The Company's strength are a dynamic and progressive leadership, a young team, nine factories across the country close to the customers driving supply chain advantages; world class technical tie up with state of the art suppliers, superior manufacturing practices supported with world class quality systems, JIT and JIS delivery practices, quick response to product change and new development, bold and aggressive marketing strategies, a well integrated and in house R and D set up, giving it a preferred supplier status, to automotive and white goods manufacturers. The Company continued to stress on improving internal efficiencies, optimizing product mix across plants, maximizing asset utilization and managing a complex flow of materials across plants. During 2006-07, improvements in these processes helped SMIL sustain its profit margins in a backdrop of increase in costs of basic raw materials like steel. 

The Government is continuing to emphasize on development of the infrastructure and streamlining the manufacturing sector which should translate to a growth in the automobile sector. The Company's activities are increasingly focused on the automotive segment and white goods segment.

The trend of rising prices of raw materials, and other inputs, expensive import of steel are areas of concern for the Indian automotive industry.

India is one of the fastest growing economies and consequently, most of the international players are; focusing on the business opportunities available here. The domestic market will therefore continue to face intensifying competition, caused by the entry of more international players, as well as by local players strengthening their operations. This may result in increased pressures on margins and delivery time. 

To protect against the possibility of competition, the Company is continuously making efforts towards specific cost improvement aimed at protecting its competitive prices. The Company has a committed team of people at all levels, ready to face the challenges and a well established customers' network. The newly developed products along with the products that are in the pipeline have enough potential to generate additional revenue for the company in the current financial year.

SEGMENT-WISE/PRODUCT-WISE PERFORMANCE: 

Segment-wise performance forming part of Annual Report for the year ended 31st March, 2007

Risks and Concerns: 

Risk is inherent in business activity, particularly one largely dependent on the steel industry. Major portion of the inputs used by the Company are steel based and their prices are linked to movement of steel prices. The management of the Company is continuously analyzing and evaluating the various risks associated with the Company's business and has adopted risk management practices to minimize the adverse impact of these risks on the business. Both external and internal developments are assessed regularly as the Company is exposed to Regulatory risk, Operational risks Legal and Statutory risks, Business risks, Assets risks and financial risks. 

Nearly 30% of the raw material requirement of the Company is imported and is subject to exchange fluctuation risk. However, the Company is efficiently managing its foreign exchange fluctuation risk. 

The management constantly scans the major areas like Customers requirements and preferences; Quality improvement, Government policies, global developments, competition from new market players, global developments with respect to steel inputs, technological changes, currency and interest rate changes, etc. Business risks and uncertainties are identified and prioritized. Appropriate de-risking strategies are planned and implemented. 

Operational Risks are the market concentration, input availability and price volatility. 

Contractual liability, statutory compliances under various corporate laws of the country, stringent legislation on pollution and emission requirements will increase production costs for the Automotive Sector. 

Retention of talented manpower appears to be another area of concern in view of buoyant job market. 

Internal Control System and Their Adequacy: 

The Company has in place, adequate systems of internal control. These controls have been designed to provide a reasonable assurance with regard to maintaining proper accounting controls, monitoring of operations, protecting assets from unauthorized use, or losses, compliances with regulations and for ensuring reliability of financial reporting. The Company has continued its efforts to align all its processes and controls with global best practices in these areas as well. 

The Company has an Audit Committee of the Board of Directors headed by a Non-Executive Independent Director, inter alia, to oversee the Company's financial reporting process, disclosure of financial information, performance of statutory auditors, functions, related parties transactions as well as other areas requiring mandatory review as per amended Clause 49 of the Listing Agreement with the Stock Exchange. 

The audit findings and recommendations are considered by the Board of Directors of the Company. The Audit Committee's observations are acted upon by the Management. 

In order to strengthen the internal control systems, the Entrepreneurs Resource Planning (ERP) system is being implemented by the Company for all its units. 

The Statutory Auditors have also opined in their report that there is an adequate internal control system commensurate with the size of the Company.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE: 

In the preparation of the financial statements, the Company has followed the Accounting Standards issued by ICAI. The accounting policies which are consistently applied have been set out in Significant Accounting Policies and Notes to Accounts under Schedule 12 forming part of the Balance Sheet and Profit and Loss Account of the Company for the year ended 31^st March, 2007. The details of the financial performance of the Company arc appearing in the Balance Sheet, Profit and Loss Account. 'The Financial highlights of the Company, has been given in the Directors' Report under the heading 'FINANCES'. 

AS PER WEB SITE:-

Subject is an ISO 9002, QS 9000, TS 16949, ISO 14001 and OSHAS 18001 certified Tier–I OEM (Original Equipment Manufacturer) for automobile and white good industries with 7 manufacturing locations.

 The Company manufactures Exhaust Systems, Catalytic converters, Suspension systems,  Sheet metal components and plastic parts for the automotive and White Goods   industries. The  company is in the process of expanding its manufacturing capabilities and   technology to become the Leader in Automotive Exhaust Systems, Canopies, seat Covers and Independent Front Suspensions by 2010.

 The Company is the sole Distributor and Service provider of High end Car Audio/Video Home Theatre products of Nakamichi, Marantz, Boston, Mordaunt-Short etc.

Company profile:

Relan Group is a diversified, multi-product group of Companies, with expertise in manufacturing and supply of components to automotive and White Goods Manufacturers. The group is also one of the pioneers in financial services.

Relan Group believes that their responsibility is to satisfy all their customers and those who use their products and services by meeting their needs promptly and accurately by maintaining the highest quality standards. There must be equal opportunity for development, advancement and growth.

Relan Group has state of the art manufacturing facilities with continuous focus on new product, innovation and technology upgradation.

Under the dynamic leadership and vision of Shri    N.D.Relan, the Chairman of the Group, Shri Rohit Relan, the Managing Director  Bharat Seats Limited and Shri Ajay Relan, the Managing Director of the Sharda Motor Industries Limited and it's units, the RELAN GROUP, with its successful track record and desire for excellence is today an industrial force to reckon with in the Automotive Supplier Industry.

GROUP COMPANIES

Bharat Seats Limited (BSL) is a Joint Venture between Suzuki Motor Corporation and Maruti Udyog Limited for manufacturing and supplying automotive Seat assemblies to the latter. The products include Automobile Seat assembly, Polyurethane Moulding of Seat, Sheet Metal / Tube Frame Forming and Welding of Seat Frame / Tube Frame Forming.

Relan Industrial Finance Limited (RIFL) is engaged in Financing of Industrial Enterprises, Portfolio Management and Stock / Share Broking . The Company is Member of National Stock Exchange , O.T.C.E.I and Delhi Stock Exchange

Progressive Engineering and Automation Private Limited (PEAPL) is incorporated with the object to manufacture, import, export and deal in engineering goods including auto parts and components.

Automotive Industry

· Exhaust Systems

· Catalytic Converters (for four wheelers) 

· Independent Front Suspensions

· Canopies

· Seat Covers

· Seat Frames (for four wheelers)

· Assembly of Rear Automotive Suspensions

White Good Industry

· Powder Coated Pressed Parts

· Plastic Flexible Hose Pipes

Entertainment Industry

Distribution, Marketing and Servicing of High end Car Audio/ Home Theatre Products Of NAKAMICHI, MARANTZ, MORDAUNT-SHORT, BOSTON ACOUSTICS etc.

In order to acquire the latest know-how to establish the quality requirements of all customers in Automobile and White Goods industry, the company has entered in to a technical collaboration with the world's renowned companies.

M/s Sejong Industrial Company Limited, Korea - Exhaust Systems

They have developed SCORPIO Exhaust System jointly with M/s Mahindra and Mahindra Limited., India and INDIGO Exhaust System has been designed and developed in house for Tata Motors Limited.

press clippings

The Hindu, October 28, 2004

New Delhi: Sharda Motor Industries on Wednesday announced that its wholly-owned subsidiary, Sharda Pro-Acoustics, will market, service and support the premium range of professional home entertainment audio visual solutions and car-audio systems of highly acclaimed international brands, Marantz and Boston Acoustics. Sharda Pro-Acoustics has already set up the first of its exclusive showrooms for the Marantz and Boston Acoustic’s range of products in New Delhi and plans to open more in Mumbai, Kolkata, Chennai, Bangalore and Hyderabad.

The Hindu, June 21, 2004

Chennai, June 21

Boston Acoustics, which announced its entry into the Indian market last week, has said it will focus on dealer training and direct marketing to gain a foothold here.

The Massachusetts-based company will market its range of audio products for the home entertainment and automotive segments through Sharda Motor Industries and Sebastian and Sons. While the latter will distribute Boston’s audio products in South India, Sharda will be its exclusive distributor for home and custom speakers for the country, as well as for car audio products for the rest of India. Mr. Christopher Cairoli, Boston’s International Sales Director (Europe, Middle East and Africa), said the company will use less of media but more for direct marketing and dealer training to make customers understand “the unique characteristics of Boston”.

Boston Accoustics, which is listed on the Nasdaq, saw its net sales for 2003-04 decreased by 26 percent to $52.6 million, from $70.6 million a year ago

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.42.86
UK Pound	1	Rs.83.58
Euro	1	Rs.66.17

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	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	YES
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		68

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/normal.	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