MIRA INFORM REPORT

 

 

 

Report Date :

17.11.2008

 

IDENTIFICATION DETAILS

 

Name :

N R AGARWAL INDUSTRIES LIMITED

 

 

Registered Office :

415-418, Janki Centre, 4th Floor, 29 Shah Industrial Estate, Andheri (West), Mumbai – 400058, Maharashtra

 

 

Country :

India

 

 

Financials (as on) :

31.03.2008

 

 

Date of Incorporation :

08.12.1993

 

 

Com. Reg. No.:

133365

 

 

CIN No.:

[Company Identification No.]

L22210MH1993PLC133365

 

 

Legal Form :

A Public Limited Liability Company. A Company’s Shares are Listed on the Stock Exchange.

 

 

Line of Business :

Manufacture of all Duplex Boards and Newsprint.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ba

 

RATING

STATUS

PROPOSED CREDIT LINE

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

Satisfactory

 

Maximum Credit Limit :

USD 2000000

 

 

Status :

Satisfactory

 

 

Payment Behaviour :

Slow by above 45 days

 

 

Litigation :

Clear

 

 

Comments :

Subject is a well established company having satisfactory track. Trade relations are fair. However the payments of the company are reported as very slow.

 

Subject can be considered normal for business dealings at usual trade terms and conditions.

 

 

INFORMATION PARTED BY

 

Name :

Mr. Ramesh Iyer

Designation :

Accounts Manager

Date :

14.11.2008

 

 

LOCATIONS

 

Registered Office :

415-418, Janki Centre, 4th Floor, 29 Shah Industrial Estate, Andheri (West), Mumbai – 400058, Maharashtra, India

Tel. No.:

91-22-26730667/ 26730570/ 26730668/ 26730913/ 14/ 17/ 2639215/ 56/ 57/ 26347316

Fax No.:

91-22-26730667/ 26730227/ 26320686

E-Mail :

Ramesh.iyer@nrail.com

admin@nrail.com

nrailm@eth.com

nrail@bol.net.in

Website :

http://www.nrail.com

Area :

2000 sq. ft.

Location :

Owned

 

 

Factory 1:

Plot No.169/1 GIDC, Phase – II, Vapi Gujarat – 396195, India

Tel. No.:

91-260-2401634

Fax No.:

91-260-2431706

Email :

admin@nrail.com

 

 

Factory 2:

Plot No. 1, Phase 1, GIDC, Vapi, District Valsad – 396 195, Gujarat

Tel. No.:

91-260-2431942

Fax No.:

91-260-2426979/ 2428320

Email :

admin@nrail.com

 

 

Factory 4:

Plot No. 901.3rd Phase, GIDC, Vapi. Dist.: Valsad (Gujarat) - 396 195, India

Tel No.:

91-260 - 240 0052 / 242 1124

Fax No.:

91-260 - 240 1836

Email :

admin@nrail.com

 

 

Factory 4:

Plot No. 901/P, 3rd Phase, GIDC,  Vapi - 396 195, India

Tel No.:

91-260 - 240 0052 / 242 1124

Fax No.:

91-260 - 240 1836

Email :

admin@nrail.com

 

DIRECTORS

 

Name :

Mr. N R Agarwal

Designation :

Executive Chairman

 

 

Name :

Mr. R N Agarwal

Designation :

Managing Director

 

 

Name :

Mr. S N Chaturvedi

Designation :

Director

 

 

Name :

Mr. P Kumar

Designation :

Director

 

 

Name :

Mr. C Musib  (Upto 10.07.2008)

Designation :

Director

 

 

Name :

Mr. C R Radhakrishnan

Designation :

Director

 

 

Name :

Mr. Raunak Agarwal (w.e.f. 01.05.2008)

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Ms. Priyanka Agrawal

Designation :

Company Secretary and Compliance Officer 

 

 

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

 

(As on 30.09.2008)

 

Category of shareholder

No. of shares

Percentage

Shareholding of Promoter and Promoter Group

 

 

Indian

 

 

Individuals / Hindu undivided family

12447923

73.14

 

 

 

Public shareholding

 

 

Institutions

 

 

Financial Institutions / Banks

2000

0.01

Central Government/ State Governments

500

0.00

Foreign Institutional Investors

4700

0.03

 

 

 

Non-Institutions

 

 

Bodies Corporate

710003

4.17

Individuals

 

 

i. Individuals shareholders holding nominal share capital upto Rs. 0.100 million

2688567

15.80

Ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 million

1141406

6.71

Any other (specify)

 

 

Non-Resident Indians

21569

0.13

Any Others       

2432

0.01

 

 

 

Sub - Total

17019100

100.00

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacture of all Duplex Boards and Newsprint.

 

 

Products :

Product Description

Item Code No.

 

 

Duplex Board

480523

Newsprint

480100

Writing and Printing

480200

 

 

Exports :

 

Countries :

Sri Lanka

 

 

Imports :

 

Products :

Waste Paper

Countries :
  • European Countries
  • Singapore
  • USA
  • UK
  • Japan
  • Germany
  • Malaysia

 

 

PRODUCTION STATUS (31.03.2008)

 

Particulars

Unit

Installed Capacity

 

 

 

Duplex Boards

TPA

112800 (3 Shifts)

Newsprint

TPA

36000 (3 Shifts)

 

 

GENERAL INFORMATION

 

No. of Employees :

250 (Office – 150 and Factory – 100)

 

 

Bankers :
  • Bank of India
  • Bank of Baroda
  • Oriental Bank of Commerce
  • Standard Chartered Bank
  • IDBI Bank Limited
  • ING Vysya Bank Limited

 

 

Facilities :

Secured Loans

31.03.2008

(Rs. In Millions)

 

 

Term Loans

 

Bank of India

83.574

The Bombay Mercantile Co-operative Bank Limited

40.351

Oriental Bank of Commerce

36.011

Bank of Baroda – Vapi

71.655

 

 

Corporate Loans

 

IDBI Bank

68.750

Bank of India

41.660

 

 

Rupee Terms Loan

 

IDBI Bank

80.000

 

 

Centurian Bank – Veh Loans

1.937

Working Capital Loan From Banks

425.684

 

 

Total

849.622

 

Note:

 

1) Term Loan from IDBI Bank Limited is secured by hypothecation of plant and machinery and extension of existing security on immovable properties situate at Vapi Plants on pari passu with other term lenders.

 

2) The Term Loans from Bank of India are secured by First pari passu charge on company’s net block excluding motor cars, office premises at Mumbai, staff quarters at Vapi and land at Sarigam, but including land admeasuring 19770 sq. metres at GIDC, Vapi purchased from Agarwal Paper Mills Limited, and Agrashakti Paper Mills Limited.

 

3) The Term Loan from Oriental Bank of Commerce is secured by hypothecation of plant and machinery and extension of existing security on immovable properties situate at Vapi Plants on pari passu with other term lenders.

 

4) The Term Loan from Bank of Baroda is secured by hypothecation of plant and machinery and extension of existing security on immovable properties situate at Vapi Plants on pari passu with other term lenders.

 

5) The Term Loan from Bombay Mercantile Co-operative Bank Limited is secured by way of Equitable Mortgage of Office premises situate at Janki Centre, Mumbai of the Company & are further secured by personal guarantee of Shri N R Agarwal & Shri R N Agarwal

 

6) The term loans from Bank of India, Oriental Bank of Commerce, Bank of Baroda and Bombay Mercantile Co-operative Bank Limited, are further secured by the personal guarantees of Shri N R Agarwal, Shri R N Agarwal, Smt R R Agarwal and Shri G N Agarwal.

 

7) The working capital loans from Banks are secured by hypothecation of present and future stock of raw materials, steam coal, goods-in-process, finished goods and book debts etc. ranking pari passu inter-se and second charge on Companies movable and immovable fixed assets and further guaranteed by personal guarantees of Shri N R Agarwal and Shri R N Agarwal.

 

Unsecured Loans

31.03.2008

(Rs. In Millions)

 

 

Fixed Deposits

3.441

Trade Deposits

27.879

Other Deposits

15.333

From Banks *

60.000

 

 

Total

106.653

 

*Unsecured loan from Indusind Bank is secured by personal guarantee of Shri R N Agarwal & Shri N R Agarwal

 

Banking Relations :

Satisfactory

 

 

Auditors :

 

Name :

Chaturvedi and Partners

Chartered Accountant

 

 

Associates/Subsidiaries :
  • Agarwal Paper Mills Private Limited
  • Agrashakti Paper Mills Private Limited
  • N. R. Paper & Boards Limited
  • Suman Paper & Boards Limited
  • Kherani Paper Mills Private Limited
  • Gayatrishakti Paper and Boards Limited

 

 

CAPITAL STRUCTURE

 

Authorised Capital:

No. of Shares

Type

Value

Amount

 

 

 

 

22500000

Equity Shares

Rs.10/- each

Rs.225.000 Millions

2500000

Preference Shares

Rs.10/- each

Rs.25.000 Millions

 

 

 

 

 

Total

 

Rs.250.000 Millions

 

Issued, Subscribed & Paid-up Capital:

No. of Shares

Type

Value

Amount

 

 

 

 

17019100

Equity Shares

Rs.10/- each

Rs.170.191 Millions

 

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

31.03.2008

31.03.2007

31.03.2006

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

170.191

178.691

178.700

2] Share Application Money

0.000

0.000

0.000

3] Reserves & Surplus

261.396

196.581

115.500

4] (Accumulated Losses)

0.000

0.000

0.000

NETWORTH

431.587

375.272

294.200

LOAN FUNDS

 

 

 

1] Secured Loans

849.622

762.105

755.300

2] Unsecured Loans

106.653

90.010

121.100

TOTAL BORROWING

956.275

852.115

876.400

DEFERRED TAX LIABILITIES

160.290

157.001

0.000

 

 

 

 

TOTAL

1548.152

1384.388

1170.600

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

1151.942

1127.717

867.000

Capital work-in-progress

46.368

38.075

169.700

 

 

 

 

INVESTMENT

1.848

1.636

0.800

DEFERREX TAX ASSETS

0.000

0.000

0.000

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
253.971

211.371

256.800

 

Sundry Debtors
394.633

367.307

313.000

 

Cash & Bank Balances
95.272

58.871

32.900

 

Other Current Assets
0.000

0.000

0.000

 

Loans & Advances
193.086

127.071

122.100

Total Current Assets
936.962

764.620

724.800

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities
552.571

489.384

564.900

 

Provisions
36.397

58.276

26.800

Total Current Liabilities
588.968

547.660

591.700

Net Current Assets
347.994

216.960

133.100

 

 

 

 

MISCELLANEOUS EXPENSES

0.000

0.000

0.000

 

 

 

 

TOTAL

1548.152

1384.388

1170.600

 

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

31.03.2008

31.03.2007

31.03.2006

Sales Turnover

3113.546

2906.781

2174.800

Other Income

20.527

7.065

11.100

Total Income

3134.073

2913.846

2185.900

 

 

 

 

Profit/(Loss) Before Tax

123.409

147.941

89.800

Provision for Taxation

32.854

37.325

33.100

Profit/(Loss) After Tax

90.555

110.616

56.700

 

 

 

 

Exports Value

143.244

78.853

NA

 

 

 

 

Import Value

99.095

116.926

NA

 

 

 

 

Expenditures :

 

 

 

 

Manufacturing Expenses

1134.528

1067.063

102.100

 

Raw Material Consumed

1698.575

1544.549

1146.300

 

Purchases made for re-sale

0.000

2.566

527.000

 

Increase/(Decrease) in Finished Goods

2.669

(1.459)

0.000

 

Interest

99.868

86.679

65.200

 

Depreciation & Amortization

75.023

66.508

52.700

 

Other Expenditure

0.000

0.000

209.600

Total Expenditure

3010.664

2765.905

2102.900

 

 

QUARTERLY RESULTS

 

PARTICULARS

 

 

30.06.2008

1st Quarter

30.09.2008

2nd Quarter

 

 

 

 

Sales Turnover

 

873.400

1001.300

Other Income

 

5.200

3.400

Total Income

 

878.600

1004.700

Total Expenditure

 

802.400

936.400

Operating Profile

 

76.200

68.300

Interests

 

24.000

24.600

Gross Profit

 

52.200

43.700

Depreciation

 

19.900

19.900

Tax

 

9.100

0.200

Reported PAT

 

23.200

23.600

 

 

KEY RATIOS

 

PARTICULARS

 

 

31.03.2008

31.03.2007

31.03.2006

 

 
 

 
 

Debt-Equity Ratio

 
2.24

2.58
2.52

Long Term Debt-Equity Shares

 
1.31

1.83
1.86

Current Ratio

 
0.77

0.77
0.76

TURNOVER RATIOS

 
 

 
 

Fixed Assets

 
2.02

2.19
2.50

Inventory

 
13.38

12.42
13.00

Debtors

 
8.17

8.55
10.39

Interests Cover Ratio

 
2.27

2.71
2.38

Operating Profit Margin (%)

 
9.68

10.38
9.55

Profit Before Interests and Tax Margin (%)

 
7.27

8.09
7.13

Cash Profit Margin (%)

 
5.37

6.10
5.03

Adjusted Net Profit Margin (%)

 
2.96

3.82
2.61

Return On Capital Employed (%)

 
17.31

19.61
18.15

Return On Net Worth (%)

 
23.12

37.93
28.12

 

 

LOCAL AGENCY FURTHER INFORMATION

 

NOTE:

 

They have purchases – 93 acres of land in sarigam in Gujarat, It is around premises taken by GIDC, which will cost app. Rs.350.000 Millions

 

They have purchased last year for Rs.100.000 Millions

 

 

HISTORY:

 

Subject promoted by N R Agarwal group is into manufacture of all Duplex Boards and Newsprint. The company incorporated in 1993 as a public limited company is one of the biggest manufacturer of industrial paper and packing boards in India. 

 
The range of products includes writing & printing paper, wrapping paper, newsprint, photographic paper, emery paper, duplex and triplex boards, soda pulp, mechanical pulp and sulphite pulp.  

 
The company operates two plants at Vapi, Gujarat with an installed capacity to produce 25200 MTPA of Duplex Boards and 30000 MTPA of Newsprint on three shift basis.  

 
The company's Duplex Boards, which are marketed under N R brand is used by reputed FMCG companies as packaging material. The company has more than 100 companies on its client list including blue-chip names such as Brooke Bond, Glaxo, ITC, Colgate-Palmolive, Johnson & Johnson, Emami and Balsara.  

 
The company came out with a public issue in Jul 1994 to part finance its project of setting up a 15000 tpa plant in Gujarat to manufacture Duplex Boards and Kraft paper. Later during the year 1998-99 the company has commissioned Newsprint manufacturing plant and production commenced from July 1998. Further next year the company has installed additional equipment in the newsprint project which has resulted in enhanced production and improved quality of newsprint.

 

 

YEAR IN RETROSPECT:

 

The Company achieved a production of 99070 tones of Duplex Boards and 32524 MT of Newsprint /Writing & Printing, highest achieved by the Company so far, compared to 98893 Tonnes of Duplex Board and 30549 Tonnes of Newsprint in the previous year. The gross sales and other income for the financial year were Rs.3134.073 Millions as against Rs.2913.847 Millions for the previous financial year

 

 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT 

 
INDUSTRY STRUCTURE AND DEVELOPMENTS: 

 
Paper industry in India being the 15th largest paper industry in the world provides employment to nearly 1.5 million people and contributes around Rs. 25 billion to the government's kitty. The government regards the paper industry as one of the 35 high priority industries of the country. The paper industry plays an important social role and consumption of paper is considered as an indicator of economic growth of the country. 

 
An improvement in the standard of living of Indians, especially in urban areas has resulted in a gradual shift towards better quality papers. This is expected to increase the demand for high-end varieties of paper. Further, with rising exports and keeping in view the current trend of outsourcing, foreign publishers have started outsourcing printing and publishing jobs to India. This would significantly increase the demand for different varieties of paper. 

 
The country is almost self-sufficient in manufacture of most varieties of paper and paperboard. The country imports only certain speciality paper such as coated and cheque paper, etc. which are imported from Singapore, USA, UK, Japan, Germany and Malaysia. Writing/ Printing grade paper, art paper, coated paper, etc. are exported to neighbouring countries like Sri Lanka, Bangladesh, Nepal and Middle-East countries. 

 
Indian paper industry needs the following for being globally more competitive. 

 
 i. Sustained availability of good quality of raw materials (forest based) and bulk duty free import of waste paper to supplement the availability of raw materials. 

 
 ii. Adequate modernization of the manufacturing assets. 

 
 iii. Improvement of the infrastructure. 

 

 iv. Quality improvements and reduction in cost of production 

 
 v. Import policy conducive for import of material, equipment, instruments, raw materials & technologies, which have a bearing on the quality and environment. 

 


OPPORTUNITIES AND THREATS: 

 
The domestic paper industry's prospects appear positive for the coming years. Additionally the paper industry in India is also witnessing a gradual change in consumer preference, which is shifting from lower to higher quality paper. With steady demand for paper in India and a surging requirement for higher quality paper, foreign players are exporting to India in a major way. Alternatively, there may be foreign tie-ups with Indian manufacturers who have a strong marketing network. 

 
The Indian paper industry is highly fragmented with numerous small players. The performance of the industry has been constrained due to high cost of production caused by high cost of raw materials, high cost of energy and environmental issues. The cost of own power generation is increasing due to consistent increase in coal prices. Thus Indian mills are losing on two counts ie high cost of power and higher power consumption. In order to enable the industry to sustain the production, the Government has taken several policy measures such as rationalization of duty structure, funding of R&D activities, de-licensing of the paper industry, permitting 100 per cent FDI through automatic route, etc. 

 

 

INDUSTRY OUTLOOK: 

 
Demand for the industry is expected to grow at the present rate of 7-8% of compounded rate and would require 9.5-10 million tonnes by the end of the decade from the existing production of around 6.7 million tonnes due to healthy economic growth, promotion of education by the government & rising literacy rates. With buoyant demand scenario and very high operating rates, imports are growing at double-digit rates. The per capita consumption of paper in India may go upto 9 kg in the coming years, up from the current 7.5 kg. Rising disposable incomes, a proliferation of malls and a greater innovation in packaging are also expected to drive the off-take and packaging paper. 
 
The steady growth in paper consumption has been accompanied by a shift to higher quality papers generated by increasing office automation, an expansion in high-speed offset printing and the substitution of traditional packing materials such as jute and wood by paper (especially in the agricultural and export sectors). Industrial users are showing an increasing preference for lower weight and brighter papers. Thus the demand for upstream market paper products, like, tissue paper, tea bags, filter paper, lightweight online-coated paper, medical grade coated paper, etc. is picking up. 


As exports require high quality packaging, exports will push up duplex board demand. However, despite high demand growth, there may be continuing over capacity in the low-end wastepaper-based capacities on account of the low capital intensity of the business. Moreover, prices in the industrial packaging segment are likely to rise only moderately on account of high level of fragmentation in the industry. 

 
The demand for Newsprint paper is expected to consistently grow with fast increasing literacy rates as also newsprint consumption per literate person. 

 
Due to favourable economic factors, which are directly linked to the demand for paper, the industry outlook appears to be positive. 

 

 

PERFORMANCE HIGHLIGHTS: 

 

The Company produced 99070 tonnes of Duplex Board and 32524 tonnes of Newsprint / W & P, compared to the installed capacity of 112800 tonnes and 36000 tonnes respectively. The Company sold 99039 tonnes of Duplex Board and 32371 tonnes of Newsprint, during the year, as against 99480 tonnes of Duplex Board and 30812 tonnes of Newsprint / W & P, in the previous year. Throughout the year under review, the company has faced stiff competition due to high cost of inputs as well as the high cost of raw materials. 

 
Overcoming the increase in input costs, the Company has posted record results during the year with total sales revenues and other income of Rs.3134.073 Millions as against Rs.2913.847 Millions for the previous financial year registering an increase of 7%. There has been a marginal reduction in profits as compared to last year due to steep increase in input cost. 

 
The Company exported Duplex Board and realized Rs.143.243 Millions, as compared to Rs.78.853 Millions, during the previous year. 

 

 

CONTINGENT LIABILITIES:

 

(a) Guarantees and counter guarantees given by the Company on behalf of group companies Rs.42.000 Millions

 

(b) Excise duty demands and penalties – Rs.3.397 Millions

 

(c) Claims against the Company not acknowledged as debts in respect of labour disputes –Rs. NIL

 

(d) Letter of Credit outstanding Rs.161.165 Millions

 

(e) Customs penalties on Imports – Rs.0.188 Millions

 

 

TRADE REFERENCE:

 

 

FIXED ASSETS:

 

 

Website Details:

 

Profile:

 

The Group commenced its activities with the incorporation of a 10 TPD unit manufacturing Kraft Paper in 1975, and has today evolved as one of the largest manufacturing facility in its chosen area of operation. The combined manufacturing capacity of Coated Duplex Boards today is 130,000 MT per annum and that of News Print, 40,000 MT PA.

 

The Company has vast resources in terms of assets, technical expertise and technology, Research and Development, plants and state of the art machinery, well equipped laboratories, excellent infrastructure and utilities including water, own power generation (steam), steam generation, communication, D.M. Plants, Effluent Treatment Plants, transportation etc. at all manufacturing locations. The Group has excellent marketing network including highly effective sales team, end users, distributors, storage facility and fast delivery capabilities.

 

Subject has grown significantly during the last decade. The technical manpower of the company is rated among the best in the Industry. To achieve the objectives of exponential growth, the company has a well knit organization with clear vision, coordination and decision channels. The effective functioning of the company is aided by support services and effective administrative systems and procedures. Total manpower including technical and commercial personnel handling activities of the company is 1500.

 

Coated Duplex Boards manufactured by the company are exported across the globe to many countries including Sri Lanka, Bangladesh, Philippines, Egypt, East Africa and Gulf Countries to name a few.

 

The company manufactures five different qualities of News Print depending on the specific needs of Publishing Houses.

 

 

NEWS:

 

PROJECTS UNDER IMPLEMENTATION

 

Unit I

 


Unit III & Unit IV

 


Systems

 

The company has recently implemented the SAP ERP system, and has won the SAP Award for Customer Excellence.

 

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.49.46

UK Pound

1

Rs.73.17

Euro

1

Rs.62.96

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

6

PAID-UP CAPITAL

1~10

5

OPERATING SCALE

1~10

5

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

5

--PROFITABILIRY

1~10

5

--LIQUIDITY

1~10

5

--LEVERAGE

1~10

5

--RESERVES

1~10

5

--CREDIT LINES

1~10

5

--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

 

46

 

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

 

Financial condition (40%)            Ownership background (20%)                 Payment record (10%)

Credit history (10%)                    Market trend (10%)                                Operational size (10%)

 

 

RATING EXPLANATIONS

 

RATING

STATUS

 

 

PROPOSED CREDIT LINE

>86

Aaa

Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums

 

Unlimited

71-85

Aa

Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums

 

Large

56-70

A

Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums

 

Fairly Large

41-55

Ba

Overall operation is considered normal. Capable to meet normal commitments.

 

Satisfactory

26-40

B

Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.

 

Small

11-25

Ca

Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity

 

Limited with full security

<10

C

Absolute credit risk exists. Caution needed to be exercised

 

 

Credit not recommended

NR

In view of the lack of information, we have no basis upon which to recommend credit dealings

No Rating

 

 

 

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions