MIRA INFORM REPORT

Report Date :

27.02.2008

IDENTIFICATION DETAILS

Name :	THE INDIAN CARD CLOTHING COMPANY LIMITED
Registered Office :	Mumbai-Pune Road, Pimpri, Pune – 411 018, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	24.06.1955
Com. Reg. No.:	11-9579
CIN No.: [Company Identification No.]	L29261PN1955PLC009579
TAN No.: [Tax Deduction & Collection Account No.]	PNEI00638B
Legal Form :	Public Limited Liability Company. Company’s shares are listed on Stock Exchanges.
Line of Business :	Manufacturer and Marketing Card Clothing and also Servicing Card Clothing

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 3122000
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/ Factory :	Mumbai-Pune Road, Pimpri, Pune – 411 018, Maharashtra, India
Tel. No.:	91-20-2411145/27425390/ 39858200
Fax No.:	91-20-27477531
E-Mail :	accounts@cardindia.com
Website :	http://www.cardindia.com
Factory 1 :	Coimbatore 524, Avanashi Road, Peelamedu, Coimbatore – 641004
Tel. No.:	(422) 2561458, 2561459, 2567858
Fax No.:	(422) 2561459
E-Mail :	icccbe@cardindia.com
Factory 2 :	Madurai Alagamma Garden, 19, Sengolnagar, Vilangudi, Madurai - 625018
Tel. No.:	(452) 2668071, 2668330, 2668480
Fax No.:	(452) 2668480
E-Mail :	iccmdu@cardindia.com
Branches :	Located at : v Ahmedabad v Coimbatore v Hyderabad v Kolkata v Ludhiana v Madurai v Mumbai v New Delhi v Panipat v Salem
Tel. No.:
International Agents :	Located at : Australia Bangladesh Sri Lanka Hong Kong Taiwan Indonesia Iran Morocco Thailand Phillipines Vietnam Sri Lanka Syria Africa Egypt South Africa Portugal Bulgeria/ Poland/ Hungery Turkey USA Peru Brazil

DIRECTORS

Name :	Mr. K K Trivedi
Designation :	Chairman
Name :	Mr. Prashant K Trivedi
Designation :	Deputy Chairman
Name :	Mr. M K Trivedi
Designation :	Managing Director
Name :	Mr. H C Asher
Designation :	Director
Name :	Mr. M M Shah
Designation :	Director
Name :	Mr. J M Kothary
Designation :	Director
Name :	Mr. C M Maniar
Designation :	Director
Name :	Mr. Sudhir Merchant
Designation :	Director

KEY EXECUTIVES

Name :	Mr. A D Dahotre
Designation :	Vice President (Finance) and Company Secretary
Name :	Mr. U V Bhave
Designation :	Vice President (Human Resources)
Name :	Mr. N Jain
Designation :	Vice President (Sales and Marketing)
Name :	Mr. U S Borkar
Designation :	General Manager (Materials)
Name :	Mr. A B Pawar
Designation :	General Manager (Production)

SOLE PROPRIETOR/PARTNERS/DIRECTORS

Category of Share Holders	Total No. of Shares	Percentage of shareholding
Non Resident Individuals. Foreign nationals
Bodies Corporate	2610166	57.35
Institutions
Any Other (specify)
Sub-Total	2610166	57.35
Total holding of Promoter and Promoter Group	2610166	57.35
Public Shareholdings3
Institutions
Mutual Fund/UTI	1800	0.04
Financial Institutions/Banks	425	0.01
Insurance Companies	15050	0.33
Sub Total	17275	0.38
Non Institutions
Bodies Corporate	333257	7.32
Individuals
i) Holding nominal share capital upto Rs. 0.100 million	1407928	30.94
ii) Holding nominal share capital in excess of Rs. 0.100 million	156122	3.43
Any Other(specify)
i) Non Resident Individuals	26372	0.58
Sub Total	1923679	42.27
Total Public shareholding	1940954	42.65
Total	4551120	100.00
Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
GRAND TOTAL	4551120	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Marketing Card Clothing and also Servicing Card Clothing

Products :

Products	Item Code
Card Clothing	844831.00

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Flexible and Metallic Card Clothing	Sets	8000	5138
Woollen, Worsted, Cotton Waste and asbestos card clothing and raising fillets and sheets	Meters	450000	162588
Accura Fixed Flats	Nos.	28800	30159

GENERAL INFORMATION

Bankers :	Ø Corporation Bank Ø HDFC Bank Limited Ø ICICI Bank Limited
Facilities :	Secured Loans : Bank overdraft secured by pledge of fixed deposits : Rs. Nil (Previous Year Rs. 13.459 millions)

Banking Relations :	Satisfactory
Auditors :
Name :	B. K. Khare and Company Chartered Accountant
Address :	706/708, Sharda Chambers, New Marine Lines, Mumbai – 400 002, Maharashtra, India
Holding Company :	* Multi Act Industrial Enterprises Limited, Mauritius
Associates/Subsidiaries :	Ø Acre Street Investments (Mauritius) Limited Ø ICC Investment and Finance Consultants Limited Ø ICC International Agencies Limited Ø Garnett Wire Limited, UK Ø Kardhar Construction Limited Ø Multi Act Trade and Investments Private Limited Ø Multi Act Equity Consultancy Private Limited Ø Crawford Bayley and Company

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares	Rs.10/- each	Rs.50.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4551120	Equity Shares	Rs.10/- each	Rs.45.511 millions

Of the above shares :

(a) 2610066 Equity Shares are held by the holding company – Multi Act Industrial Enterprises Limited, Mauritius

(b) 2620800 Equity Shares were allotted as fully paid bonus shares by capitalization of General Reserve.

(c)

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		45.511	45.511	45.511
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		735.043	637.102	548.421
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		780.554	682.613	593.932
LOAN FUNDS
1] Secured Loans		0.000	13.459	12.411
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	13.459	12.411
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		780.554	696.072	606.343
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		226.961	82.871	91.507
Capital work-in-progress		186.982	210.135	57.850
INVESTMENT		252.582	205.337	327.421
DEFERREX TAX ASSETS		1.284	2.584	1.661
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	94.230	107.616	89.608
	Sundry Debtors	92.493	84.883	99.718
	Cash & Bank Balances	6.689	74.579	21.548
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	43.340	45.630	54.924
Total Current Assets		236.752	312.708	265.798
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	99.707	94.542	118.492
	Provisions	24.300	23.021	19.402
Total Current Liabilities		124.007	117.563	137.894
Net Current Assets		112.745	195.145	127.904
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		780.554	696.072	606.343

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		450.445	467.191	465.753
Other Income		186.968	147.508	83.396
Total Income		637.413	614.699	549.149
Profit/(Loss) Before Tax		195.489	186.736	141.583
Provision for Taxation		32.340	33.187	282.169
Profit/(Loss) After Tax		163.149	153.549	423.752
Earnings in Foreign Currency :
	Export Earnings	91.275	87.503	77.747
	Other Earnings	2.012	1.903	1.531
Total Earnings		93.287	89.406	79.278
Imports :
	Raw Materials	12.527	27.247	27.722
	Stores & Spares	1.867	1.406	2.257
	Capital Goods	6.959	29.893	0.000
	Others	1.787	1.688	0.981
Total Imports		23.140	60.234	30.960
Expenditures :
	Interest	0.113	0.093	0.132
	Depreciation & Amortization	23.559	14.103	14.707
	Other Expenditure	418.252	413.767	392.727
Total Expenditure		440.144	427.963	407.566

SUMMARISED RESULTS

Particulars	30.06.2007	30.09.2007	31.12.2007
Type	1^st Quarter	2^nd Quarter	3^rd Quarter
Sales Turnover	81.400	125.400	111.300
Other Income	12.900	15.500	27.200
Total Income	94.300	140.900	138.500
Total Expenditure	84.600	106.100	94.800
Operating Profit	9.700	34.800	43.700
Interest	0.100	0.000	0.000
Gross Profit	9.600	34.800	43.700
Depreciation	6.000	6.100	6.100
Tax	0.300	10.000	7.700
Reported PAT	2.000	18.700	29.900

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	0.01	0.02	0.02
Long Term Debt-Equity Ratio	0.00	0.00	0.00
Current Ratio	2.16	2.06	1.69
TURNOVER RATIOS
Fixed Assets	1.33	1.71	1.68
Inventory	5.08	5.43	6.79
Debtors	5.78	5.80	6.46
Interest Cover Ratio	591.00	672.00	883.00
Operating Profit Margin(%)	16.14	15.18	19.17
Profit Before Interest And Tax Margin(%)	11.54	12.55	16.44
Cash Profit Margin(%)	13.25	12.10	15.19
Adjusted Net Profit Margin(%)	8.65	9.47	12.45
Return On Capital Employed(%)	8.00	10.32	15.18
Return On Net Worth(%)	6.06	7.94	11.71

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject was incorporated on 24^th June, 1955 at Pune in Maharashtra having Company Registration Number 74692.

Subject was incorporated in July, 1955 as a private limited company. it was converted into a public limited company in January, 1976. Subject was promoted as a joint venture between two British Companies- The English Card Clothing Company and the Carclo Engineering Group.

Subject manufactures card clothing suitable for all types of fibers requiring carding, ie. all the natural fibres and manmade fibres in staple form. It also has a 100% EOU at Ahmedabad. The company came out with a rights issue (Premium : Rs. 70) aggregating Rs. 104 millions in December, 1993., to provide for normal capital expenditure and participated in a joint venture with Spindelfabrik Suessen Schurr, Stahlecker & Grill, Germany, which it had undertook to manufacture of textile machinery equipment.

Due to recession in textile industries in the Domestic and Overseas market, subject diversified its project and participated in Joint Venture with Texmaticc India Limited and invested Rs. 2.500 millions. The Residential housing project of Nirvan Builders and Developers Limited in which company participated and received advance for sale of major part of its investment in project. Garnett Wire Limited, a U.K. company, in which ICCCL has 60% of issued share capital, this is second year of investment by the ICCCL.

Subject has maintained ISO 9002 recognition by Bureau Veritas Quality International for Metallic and flexible card clothing and R and D Centre begun to make a contribution to development of newer and improved products and processes.

Subject is planning to develop new products for carding applications and also improvement in the processes.

BUSINESS

Subject is engaged in the business of Manufacturing and Marketing of Card Clothing and also Servicing Card Clothing.

OPERATIONS-HIGHLIGHTS

The Company's Sales and Servicing Income for the year was Rs.455.263 million as compared to Rs.471.699 million in 2005-06.

Sale of metallic card clothing registered growth of 3.85% during the year to Rs.307.847 million from Rs.296.435 million in the previous year as a result of higher demand for the Company's products. Sale of woollen card clothing decreased by 18.14% during the year to Rs.59.333 million from Rs.72.480 million in the previous year due to decreased demand from woollen sector. Export increased by 6.63% to Rs.91.275 million during the year from Rs.85.600 million in the previous year.

Other Income includes Rs. 98.758 million of non-recurring gain as a result of a development agreement in respect of the land at Pimpri and is included under capital work in progress. Capital work in progress also includes Rs.37.952 million paid as an advance towards land and Rs.35.692 million towards imported capital machinery in respect of the project for manufacture of card clothing in Himachal Pradesh. The project is delayed pending receipt of all the statutory permissions.

SUBSIDIARY COMPANIES

ICC International Agencies Limited recorded an increase in income of 30.82% from Rs.47.940 million in the previous year to Rs.62.714 million in the current year. The subsidiary company recorded profit after tax of Rs.12.758 million in the current year against previous year's profit after tax of Rs.11.181 million.

The higher profit after tax was mainly on account of higher commission income and income from traded goods. ICC International Agencies Limited paid a dividend of 75% (previous year 40%). 

Garnett Wire Limited (GWL), a U.K. Company, in which the Company has 60% of the issued share capital, recorded to lower turnover and consequently lower profit after tax of pound 22349 against pound 67844 in the previous year.

GWL did not pay dividend during the year (11.43% in the previous year).

The reduction in Turnover reflected a relative weakness in the domestic U.K. market and modest growth in the export sales. Whilst increases in the cost of raw material, labour and energy contributed to the erosion of the margin, as these input costs could not be passed on in the sales price. 

During the year the Company purchased 940 shares of Rs.100 each at an aggregate price of Rs.23000 and therefore Shivraj Sugar and Allied Products Private Limited became a subsidiary of the Company.

Industry Structure and Development

Cotton: 

The pace of consolidation within the card clothing industry appears to have come to a standstill for the time being after the spate of acquisitions in the previous financial year.

Although there were significant changes in the structure of the industry following the acquisitions, the global card clothing industry remains fragmented. Therefore, many competitors, vying for increased market share, but without a significant bargaining position between customers and suppliers in the re-clothing business, characterize the industry. 

A few years ago, card clothing businesses were able to specialize in a particular segment of carding machines to be re-clothed. However, with the advent of a global market in textiles, the older make of cards are being replaced by cards with higher productivity and therefore many businesses are now moving up the value chain to re-clothe those high production cards, resulting in greater competitive pressures in the re-clothing business. 

In the case of supplies to original equipment manufacturers, the four major manufacturers of carding machines have their own suppliers or associate companies who manufacture card clothing. Reiter AG. and Lakshmi Machine Works Limited are now supplied card clothing by Graf + Cie A.G. and Lakshmi Card Clothing Limited respectively. Whilst Trutzchler GmbH and Trumac Engineering Limited have manufacturing facilities in Germany and in India respectively to produce card clothing from equipment purchased from J.D. Hollings worth GmbH. All four manufacturers of card clothing are attempting to influence the customer's re-clothing decision with mixed success. 

Within India, there are still only two major manufacturers of card clothing for short staple application viz., The Indian Card Clothing Company Limited and Lakshmi Card Clothing Company Limited. N.V. Bekaert S.A. through its acquisition of the assets of English Card Clothing Co. Limited, a subsidiary of Carclo pic has a small tops manufacturing plant in Pune, and Trutzschler GmbH has a small cotton flexible facility, in Ahmedabad. Trutzschier GmbH has commenced commercial production at its Ahmedabad plant for sundry items for the Trutzschler cards, although the main card clothing items are still imported. 

Chinese Textile machinery manufacturers have set up sales offices in India and Chinese card clothing manufacturers have appointed agents at various locations in India with a view to exploiting the buoyant Indian textile industry but have to date, met with limited success. 

Woollen: 

The flexible card clothing business is less fragmented, as many producers of flexible card clothing have over the past few years withdrawn capacity due to the decline in the use of flexible card clothing in favour of metallic card clothing to process wool in developed economies. However, in India, majority of the wool spinners use flexible card clothing, but the business is characterized by erratic sales fluctuation due to the cyclical nature of the woollen and waste regeneration business, high inventory carrying costs and a diverse product line, which requires an element of customization. 

In India there are two manufacturers of flexible card clothing forwool and long staple fibres. The Indian Card Clothing Company Limited and ABCC Limited. In addition there are a number of distributors of card clothing manufactured by Chinese and Italian producers, the latter firms, looking for markets to replace sales lost in Europe. 

The competitive environment in the flexible card clothing business is fierce and marked by discounts and price wars between Indian manufacturers and foreign manufacturers to gain market share. 

Opportunities

Growth of the textile industry: 

The consumption of fibre has a direct bearing on the demand for card clothing. In India, production of cotton yarn for the year 2006-07 at 2835.94 million kgs. has shown an increase over 2472 million kgs. in 2005-06, whilst production of blended yarn for the year 2006-07 at 637.20 million kgs. has shown an increase over 584 million kgs. in 2005-06. 

This trend augurs well for the continued demand for the Company's products. Increase in the capacity of spinning frames and rotors have a direct impact on the potential for growth of the Company. India has the second largest spinning capacity in the world and the capacity expansion in the Indian textile industry continues unabated. Approximately 1.47 million spindles were added in the fiscal year 2006-2007 and the rate of expansion is expected to continue. In 1986 India had a spinning capacity of 26 million spindles and 19,300 rotors, by October 2006 it had 39.4 million spindles and 603,000 rotors. Approximately Rs.10,035 crores were disbursed under the Technology Upgradation Fund Scheme (TUFS). In the Budget 2007 the scheme has been extended further to 2010. 

Exports

Tapping the markets outside of India presents a great opportunity for the Company to expand its reach, leveraging on its large domestic market.

Participation in international textile machinery exhibitions has created a brand awareness of ICC in major textile markets to help in the effort to increase exports. 

The Company also provides after sales service through regular visits of service engineers to its most important markets to help its customers maintain their card clothing. 

Brand

Efforts are continuous to ensure that the positive "ICC" brand image is reinforced.

This is being done by new product introductions, improvements in service levels and continuous improvements in quality.

Operations

The Company's main business is the manufacture and marketing of card clothing. Although the conditions in the cotton textile industry-continue to remain buoyant, the Company recorded a marginal increase in turnover of 2 percent in cotton card clothing. The continued decline in the woollen industry resulted in the Company registering a decline in sales of woollen card clothing of 18 per cent resulting in a decrease in gross profit from operations by 13 percent. 

Demand for better quality yarn required textile mills to invest in one-time purchases of card upgradation products like Accura Carding elements and Accura Beater segment although the Company registered a marginal decline of 8% in sales of these items. Sales of Sharprite, wire sharpening device and Sharphte Tops, the tops re-sharpening and cleaning device also saw a decline. Principal reasons for the decline in sales of these items was due to the textile mills expenditure on increasing production capacity by purchasing new equipment rather than retrofit products. Efforts to enhance the operating efficiency including re-training manpower and introducing flexibility in manning, depending on skills, are continuing since these will become more critical over the years as demand continues to rise for re-clothing new carding capacity being created. 

The above efforts are expected to result in supply of better quality products.

Outlook

The growth and profitability of card clothing business is highly dependent on the performance of the textile industry and yarn, being a global commodity, depends on market forces and the overall global economic outlook.

The Company hopes to further improve its operations by:

(a) making further improvements in the quality of its products; 

(b) continuing to introduce new products which will increase the product portfolio of the Company and meet the requirements of the Company's existing and potential customers; 

(c) improving productivity in the manufacturing processes and; 

(d) reducing costs. 

Financial Performance: 

Trading conditions in the cotton textile industry have shown growth and consequently the sale of metallic card clothing for the cotton textile industry registered an increase of 3.85%. Woollen card clothing sales were affected by adverse industrial relations in one of the major woollen market of Panipat. 

Sale of Accura assemblies, a one-time retrofit device for carding machines, was lower by 7.31% during the year, as were sales of Sharprite, Sharprite Tops and Accura Beater Segments. The principal cause of this decline in sales was due to a growing trend amongst Spinning mills opting to purchase new carding machines instead of upgrading their old carding machines.

Exports have shown a growth of 6.63% on account of higher demand in the overseas market. 

The company’s fixed assets of important values include Land, Buildings, Plant and Machinery, Electrical Installations, Air Conditioning, Plant and Machinery, Furniture and Fitting, Office Equipments and Computers and Vehicles.

Website Details :

Subject has mastered change to keep its position as a leader. With products developed to handle the evolving needs of increased rate of outputs – going as high as 150 kg/hour. And to meet more exacting quality standards worldwide. Innovation has become an ongoing process at subject. A state-of-the-mind instilled in every employee, in every department, in every stage of the production process.

The result. A wide range of wires, tops and flexible card clothing. To suit every requirement, depending on the type of fibre being processed and the quality parameters desired. In fact, subject is one of the few companies in the world that manufactures card clothing to process every fibre. Natural or man made. On every type of carding machine, be it conventional cards or super high production cards.

The R&D Cell at subject is constantly tuned to market needs. Experimenting with fresh ideas and technologies. Making significant breakthroughs in tooth geometry, surface treatment, etc, Recent developments include special alloy steel wires in the Tenace series, a new generation of Triumph Tops and specially developed AeroDoffer Wires for better doffing.

Thanks to team efforts, ICC now has a line of Card Upgrade Products which aim at adding carding efficiency to older cards. Subject's Web Catcher and Accura Carding Elements have added significantly to the returns at hundreds of mills, where they have been installed in the last couple of years. More such innovations are on the testing line.

News :

Issue Two :

ICC and Garnett Wire celebrate decade of Carding Innovation

Enduring Performance and Reliability- Introducing The Endura Range

ITME 2000 Success

Essential Fancy Design

Soma relies on ICC for Consistent Quality

Carding the World-Great Export Success

Issue One

A Global Force In Carding -ICC and Garnett Wire form worldwide partnership

Global Communication-Launch of ICC website

Breathing New Life Into Old Cards-Accura enchances Carding efficiency

ITME2000- See ICC's product showcase

Increased Production Rates-Enchanced quality with Tenace wires

In-House Quality Assurance-Focus on ICC Tool Room

ICC Around The World- Spotlight on new export markets

Outstanding Commitment To Quality- Profiles of ICC and Quality Control Division

Trumac Machinery Manufacturer - ICC and Trumac partnership

They can also supply from their sister concern M/S Garnett Wire Ltd, UK who manufacture interlocking wires as well as metallic wires in heavier cross section commonly used in blow room lines, woollen, nonwoven & worsted machineries.

The ICC stamp of quality, recognised the world over, is further endorsed by the ISO 9001 Certification from BVQI. ICC has satisfied clients in virtually every part of the globe-the Far East. South East Asia, Africa, Europe and the Americas.

Customer Support

One of the biggest advantages of buying an ICC product is that it comes complete with ICC Customer Care, the support services that set the standard for quality and reliability. From the minute you purchase any ICC product, have their commitment to helping you get the most from it. They’re always close by to provide product support, or just to answer the questions, whenever and wherever you need us.

Only trust the repair or service of the ICC product by an authorized technician. Their support technicians are trained to assist you for repair of ICC products.

In order to provide full assistance of servicing they have service stations situated in both Coimbatore & Madurai Branch. They conduct all types of mounting of metallic wire, clipping & grinding of tops in their service station. On request their trained technicians also conduct mounting work in mills at a nominal service charge

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.39.92
UK Pound	1	Rs.79.31
Euro	1	Rs.60.63

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	7
--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		72

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

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