MIRA INFORM REPORT

Report Date :

30.09.2008

IDENTIFICATION DETAILS

Name :	TVS SRICHAKRA LIMITED
Registered Office :	TVS Building, 7-B, West Veli Street, Madurai – 625 001, Tamilnadu
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	02.06.1982
Com. Reg. No.:	18-9414
CIN No.: [Company Identification No.]	U25IIITN1982PLC009414 / L25111TN1982PLC009414
TAN No.: [Tax Deduction & Collection Account No.]	MRIS00086C
Legal Form :	Public Limited Liability Company. The company shares are listed on the Stock Exchange.
Line of Business :	Manufacturing of Two Wheeler Tyres.

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 2957000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a part of TVS Group, an established and reputed industrial house. Available information indicates high financial responsibility of the company. Trade relations are fair. Financial position is good. Payments are correct and as per commitment. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a medium to long-run

LOCATIONS

Registered Office :	TVS Building, 7-B, West Veli Street, Madurai – 625 001, Tamilnadu, India
Tel. No.:	91-452-2420461
Fax No.:	91-452-2420266
E-Mail :	secretarial@tvstyres.com sundarpk@tvstyres.com
Website :	http://www.tvstyres.com
Administrative Office :	10, Jawahar Road, Madurai-625002 Tamilnadu, India
E-Mail :	secretarial@tvstyres.com investorgrievances@tvstyres.com demat@tvstyres.com
Website :	http://www.tvstyres.com
Factory 1 :	Vellaripatti Village, Melur Taluk, Madurai District- 625122 Tamilnadu, India
Factory 2 :	Narasingampatti Village, Therkutheru, Melur Taluk, Madurai District-625122 Tamilnadu, India

DIRECTORS

Name :	Mr. S. Narayanan
Designation :	Chairman
Name :	Mr. R. Naresh
Designation :	Executive Vice Chairman
Name :	Ms. Shobhana Ramachandhran
Designation :	Managing Director
Name :	Mr. K. R. Ragavan
Designation :	Director
Name :	Mr. M. S. Viraraghavan
Designation :	Director
Name :	Mr. N. T. Atthreya
Designation :	Director
Name :	Mr. J. V. Raghavan
Designation :	Director
Name :	Mr. Sitaram Rao Valluri
Designation :	Director

KEY EXECUTIVES

Audit Committee : Shareholders/Investors Committee

Mr. M. S. Viraraghavan Chairman Mr. N. H. Atthreya Mr. Sitaram Rao Valluri Mr. K. R. Raghavan Mr. S. Narayanan Chairman Mr. Shobhana Ramachandran Mr. J. V. Raghavan

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (as on 31.03.2008)	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group
Individuals / Hindu Undivided Family	360762	4.71
Bodies Corporate	2661754	34.76
Public Shareholding
Institutions
Mutual Funds / UTI	650	0.01
Financial Institutions / Banks	2580	0.03
Central / State Government(s)	94	0
Foreign Institutional Investors	17400	0.23
Non-Institutions
Bodies Corporate	767853	10.03
Individual shareholders holding nominal share capital upto Rs. 0.1 Millions	2973952	38.84
Individual shareholders holding nominal share capital in excess of Rs. 0.1 Millions	815864	10.65
Clearing Member	49911	0.65
		0.01
Corporate CM / TM – Client Margin A/C	346	0.07
Corporate CM / TM – Client Beneficiary A/C	5284	0.07
Trust	600	0.01
Total	7657050	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Two Wheeler Tyres.

Products :

· Mopeds

· Scooter

· Light Motor Cycle

· Motor Cycle

· 3 Wheeler

· Light Commercial Vehicle

· Tractor Front

· Tractor Trailer

· Jeep

· Racing

· Industrial Pneumatic

· Implement

· Skid Steer

· Multi Purpose

· Mining

· Antiqu

Product Description	ITC Code No.
New Pneumatic Tyres of rubber	40.11
Inner Tubes of rubber	40.13
Phenolic Moulded Products	39.26

Export to :

UK, Germany, Italy, Spain, France , Benelux, Scandinavia, Hungary, Turkey, Morocco, Argentina, Algeria, Ethiopia, Ghana, Mauritius, Bahrain, Egypt, Austria, Ireland, Thailand, Sri Lanka, USA, Europe, Africa, South America and South East Asia

PRODUCTION STATUS (as on 31.03.2008):-

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Automotive Tyres	Nos.(000)	15000	11029	9774
Automotive Tubes	Nos.(000)	15000	11750	10241

GENERAL INFORMATION

Bankers :

Ø State Bank of India

West Veli Street, Madurai- 625001, Tamilnadu, India

Ø HDFC Bank Limited

Facilities :

Secured Loans	31.03.2008 Rs. in millions
Loan from Banks:
Working Capital Facilities	1235.816
Term Loans:
State Bank of India Limited	346.808
HDFC Bank Limited	0.000
Total	1582.624
Unsecured Loans	31.03.2008 Rs. in millions
Fixed Deposits	1.168
HP Finance	1.699
Total	2.867

Includes Deposits matured and unclaimed Rs. Nil Previous years Rs. 0.116 million

Banking Relations :

Good

Auditors :

Name :

Sundaram & Srinivasan

Chartered Accountant

Address 1 :

Old No. 111, New No. 250, P.T. Rajan Road, Madurai-625014 Tamilnadu, India

Address 2 :

New No. 250, P T Rajan Road, Madurai – 625 014 Tamilnadu, India

Associates/Subsidiaries :

T V Sunadram lyengar and Sons Limited

TVS Telecom Components Limited

TVS Cherry Private Limited

Van Leeuwen Tyres and Wheels B.V., Holland

Sundaram Industries Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs. 10/- each	Rs.100.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
7657050	Equity Shares	Rs. 10/- each	Rs.76.570 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		76.570	76.570	6.570
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		514.801	453.334	412.866
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		591.371	529.904	489.436
LOAN FUNDS
1] Secured Loans		1582.624	1199.504	424.052
2] Unsecured Loans		2.867	5.888	364.729
TOTAL BORROWING		1585.491	1205.392	788.781
DEFERRED TAX LIABILITIES		73.703	75.864	72.221
TOTAL		2250.565	1811.160	1350.438
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		628.121	589.735	508.369
Capital work-in-progress		10.224	25.176	27.346
INVESTMENT		12.450	12.450	12.450
DEFERREX TAX ASSETS		0.000	0.000	2.013
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	934.999	615.401	371.521
	Sundry Debtors	845.363	720.634	618.820
	Cash & Bank Balances	42.349	15.245	21.470
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	365.091	346.168	163.404
Total Current Assets		2187.802	1697.448	1175.215
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	547.618	478.104	347.743
	Provisions	40.414	35.545	27.212
Total Current Liabilities		588.032	513.649	374.955
Net Current Assets		1599.770	1183.799	800.260
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		2250.565	1811.160	1350.438

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		4663.319	4267.250	2918.339
Other Income		0.000	0.000	0.000
Total Income		4663.319	4267.250	2918.339
Profit/(Loss) Before Tax		137.057	105.678	63.474
Provision for Taxation		43.839	37.656	26.978
Profit/(Loss) After Tax		93.218	68.022	36.496
Total Earnings		895.311	743.451	458.569
Imports :
	Raw Materials	1042.184	1123.060
	Stores & Spares	5.292	0.761
	Capital Goods	7.500	14.734
Total Imports		1054.976	1138.555	507.786
Expenditures :
	Material Consumed	3074.676	2966.359	1944.960
	Purchase of traded goods	7.393	5.070	4.313
	Other Expenses	1242.422	1027.941	23.992
	Interest	110.908	81.023	66.021
	Depreciation	90.863	81.179	815.579
Total Expenditure		4526.262	4161.572	2854.865

QUARTERLY RESULTS

PARTICULARS	30.06.2008
Type	1st Quarter
Sales Turnover	1362.400
Other Income	16.900
Total Income	1379.300
Total Expenditure	1279.400
Operating Profit	99.900
Interest	36.700
Gross Profit	63.200
Depreciation	25.100
Tax	15.100
Reported PAT	23.000

KEY RATIOS

Year	31.03.2008	31.03.2007	31.03.2006
Debt-Equity Ratio	2.49	1.96	1.05
Long Term Debt-Equity Ratio	0.73	1.09	0.77
Current Ratio	1.20	1.50	1.68
TURNOVER RATIOS
Fixed Assets	4.30	4.45	3.77
Inventory	6.71	9.63	10.50
Debtors	6.64	7.09	6.64
Interest Cover Ratio	2.22	2.28	3.36
Operating Profit Margin(%)	6.54	5.67	4.72
Profit Before Interest And Tax Margin(%)	4.79	3.96	2.73
Cash Profit Margin(%)	3.53	3.14	3.09
Adjusted Net Profit Margin(%)	1.78	1.43	1.10
Return On Capital Employed(%)	12.72	12.50	9.21
Return On Net Worth(%)	16.55	13.34	7.60

LOCAL AGENCY FURTHER INFORMATION

HISTORY:

Subject is a part of TVS Group, the largest auto ancilary group with a turnover of 1.6 billion dollars. Incorporated in Jun.'82, Srichakra Tyres (STL) was promoted by R Naresh, T V Sundram Iyengar and Sons and Sundaram Industries. Renamed as TVS Srichakra Tyres Limited on Oct, 1997. The company manufactures tyres, tubes, Flaps, rubberised textile fabric and it is one of the largest manufacturers of Industrial Pneumatic Tyres, Farm and Implement Tyres, Skid Steer Tyres, Multipurpose and Vintage Tyres.

In Sep.'94, the company came out with a rights issue to meet the cost of expanding the installed capacity from 1.500 Millions to 2.400 Millions tyres/tubes and to meet the long-term working capital requirements, at a project cost of Rs 36.000 Millions. Some of the major clients of STL are Hero Honda, Bajaj Auto, TVS Suzuki, etc. The company has a joint venture with DuPont and Cherry.

STL exports to the US and the European market. In 1995-96, the company expanded its production capacity to 33 lakhs pa. Technology for modernization of certain sections of its plant is imported from Schiesser Rubber Technology, Switzerland. During 1997-98, the company has expanded its plant capacity of Automotive Tyres to 36 lakhs nos per annum and Tubes to 33 lakhs no per annum. This was funded through Long Term Debt and Internal Accruals.

Nitya Sarvamangala Trading and Holding Limited and TVS Srichakra Holdings Limited are its subsidiaries. The company launched a new premium range of moped tyre, under the name "MEGA STAR" during the year 1999-2000. 

In 2000-01 company has expanded its plant capacity of the tyre division from 53 lakh nos to 55 lakh nos of tyres per annum. The company has also invested Rs.31.700 Millions for this expansion and modernization. It is developing new tyres for the export market. During 2002-03 the 2 subsidiary companies viz Nitya Sarvamangala Trading and Holding Limited and Subject Holdings Limited was amalgamated with the company with prior approval from the board as well as from the Hon'ble High Court of Chennai. It has also increased the tyre capacity and tube capacity to 73.62 lakh and 65.52 lakh respectively. The above expansion as well as modernization of its plant was done at a outlay of Rs.52.500 Millions. The company has invested in modeling software, machine center and in other related infrastructure for developing proven products, in the least possible development cycle time. 

The Company is accredited with ISO 9001 and ISO 14001 and won TPM Excellence award and practising Six Sigma and Lean Manufacturing Techniques.

PERFORMANCE:

The Company's turnover for the year has grown over previous year, to Rs.5200 Millions, despite a negative growth in two wheeler market. This growth in turnover was mainly due to increased contribution from After Market and Exports segments. Volatility in the prices major raw materials, particularly Natural Rubber and petroleum based inputs has affected the margins, during this year also. The Company was able to register a higher profit before tax (PBT) at Rs137.000 Millions as against Rs.105.700 Millions in the previous year, due to strategic sourcing of major raw materials, particularly Natural Rubber. There was a significant increase in interest cost during the year. This was mainly due to the increased working capital requirements, strategic sourcing of raw materials and also increase in interest rates due to non availability of packing credit facility in US Dollar. 

The Company's profit after tax for the year ended 31st March, 2008 also improved to Rs.93.200 Millions, against Rs68.000 Millions in the previous year. 

The growth in two wheeler market has shown a negative growth rate during the year 2007-08, resulting in reduced off-take from OEMs. However, the Company has been able to increase After Market and Exports sales and maintain the top line. The bottom line has got affected due to the fact that the increase in raw materials price could not be passed on in full to the Customers. To offset the slump in bottom line due to spiraling input costs, the Company has initiated a series of cost reduction measures and productivity improvement programs.

EXPORTS: 

The Company has achieved an Export turnover of Rs.900.000 Millions from Rs.750.000 Millions last year, inspite of rupee becoming stronger against dollar. The growth achieved was 28%. 

Significant addition of new products have enabled the Company to grow in the niche segment and also pave way for further expansion in the trade by adding more new customers in various countries. In the year 2007-08 the Company has expanded the distribution net work to more than 60 distributors around the globe. The number of countries where the export has made a significant presence has gone up from 28 to 56 in the last 3 years. 

The Company has also identified the futuristic demand for motorcycle tyres in Africa and has made a significant beginning and the future for two wheeler tyre Exports to Africa and South America is also encouraging. 

MARKETING:

The two wheeler industry was growing at a double digit growth of 15% consistently for the last 3 years. However, the year ended 31.3.2008 registered a negative growth of around 8%. The main factor for the slow down of the Industry continues to be higher interest rates and also the regulations by the bankers on lending. This slow down has impacted the Company's sales volume with OEMs. With concerted efforts in the After Market, the Company was able to restrict this negative growth.

The After Market continued to be buoyant. The intense focus through the sales promotion activities driven the market growth substantially. The Company will continue to enhance the brand image in the coming years through these activities which will result in higher, market share. During the course of the year the Company launched Terrific Trio, which supplemented the efforts on the volumes. The Company plan to sustain the growth level in the coming year also. 

EXPANSION:

The Company proposes to expand its capacity from 110 lakh nos of tyres and tubes each per annum to 150 lakh nos of tyres and tubes each, per annum.The Company is hopeful of utilizing the expanded capacity of Tyres and Tubes during the year 2008-09, in the export as well as domestic market.

The Company's outlay on capital expenditure during 20072008 amounts to Rs.150.000 Millions, funded by borrowings and internal accruals. The Company proposes to spend an amount of Rs.250.000 Millions during the year 2008-09. 

The Company is exploring a possibility to expand its capacity further through Green field projects outside Madurai. 

NEW PRODUCT DEVELOPMENT: 

The Company has launched new tyres during the year 2007-08 for both export and domestic market, depending on the market requirements. The Company is concentrating on developing tyres for the new generation bikes, during the coming year 2008-09. 

Industry Structure and Development:

The tyre industry derives its demand primarily from the automobile industry. The growth and off take in the OE market is directly related to new vehicle sales; whereas in the After Market, several factors like vehicle population, road conditions, technology up gradation, extent of tyre retreating determine the volumes. 

The core business of the Company is manufacturing, distribution and sale of tyres, tubes and flaps primarily to two/three wheelers segment in the domestic market and larger tyres for agricultural and other industrial applications in the Export Market. 

The year gone by has been a very difficult and sluggish year for the automobile industry, and in particular, for the two wheeler industry, which has registered a negative growth of 8%. This has been due to various reasons and a significant contributor was the hike in interest rates affecting the middle and low income consumers. In the Export Market also, the unprecedented depreciation of the Dollar made the product more expensive in raw material inputs and less attractive in realization. 

Raw Material prices continued to be volatile in the previous year and became unpredictable in its spike, which in turn, forced the manufacturers towards larger inventories and increased interest costs. This uptrend is expected to continue during the year 2008-09 also. Hence, the tyre manufacturers are watchful of this trend and are taking cost reduction measures for sustaining the margin levels. 

Power scarcity has also been a very serious concern for the industry as a whole during the previous year. This resulted in increased power cost due to Companies resorting to DG power. 

Discussion and Analysis:

Market: 
Original Equipment Manufacturers

The Company consciously decided to de-risk the Company's sale from the OE segment in order that the Company achieves a healthy balance between the OE and After Market segments of the two wheeler tyre market. It was satisfying to note that the contribution of OE sales to the total sales has substantially come down compared to last year. 

After Market:

The After Market sales registered a spectacular growth in both value and volume from the previous year and there is a major thrust within the Company to expand the same still further. Major sales promotion activities and introduction of new products together with robust marketing initiatives have contributed to this growth. 

Export:- 

Export sales registered a very healthy growth over the previous year, inspite of the depreciating US Dollar. The Company has opened new avenues in terms of geographical and distribution capabilities and is poised to expand even more significantly in this segment. 

Manufacturing: 

Challenges in the manufacturing area have been directly met with initiatives in increased productivity, value engineering and process changes, creating a better yield and a lower rate per kg of product produced. The Company won for third successive year the Energy Conservation Award from the Government of India, which is a unique and singular achievement in optimum utilization of energy. 

Outlook:

The two wheeler industry is optimistic about the revival of the good growth witnessed in 2006-07. independent of this, the Company has taken ample steps to prioritize the Product Mix towards satisfying the OE sales and increasing the share of business in the After Market segment.

The Company has in OE, identified new international customers in order to remain the leader in its field and also has been short listed for supplies to a major international manufacturer in India.

In the After Market, the healthy growth trend is being supplemented by aggressive sales promotion and market storming activities in order to achieve a significant market share this year. 

Export Market growth is being strengthened by actions which may also include establishing a dedicated green field project to meet the significant increase in the Export thrust. New Product Development Program is also actively focused towards this. 

Risks and Concerns:

External Risks 

Raw Material price escalation which would outpace the price increases received from the Customers. 

Down turns in OE Sales - Two wheelers due to increased interest costs and inflation and also migration towards the low cost four wheelers. 

Foreign Exchange Volatility, specific to US Dollar and Euro. 

Power scarcity which can increase the Conversion Cost. 

The Company continues to hedge the raw material prices through strategic sourcing. 

There is a structured FOREX Policy in place with the following objectives: 

1) Ensuring adequate hedging of the Company's exposure in Forex, viz.exports, imports and loans. Hedging is done up to a certain level of total exposure and certain portion of exposure is left uncovered to take care of market dynamics. 

2) Hedging/covers are taken based on Bench mark rate, for various currencies.

Internal Risks: 

Dependence on OE Customers.

Competition from low cost manufacturer in the After Market segment.

Increased marketing initiatives from China creating price pressure in the Export Market. 

Dependence on OE has come down noticeably and will further reduce in the coming years. Company is increasing its presence in the other segments, such as After Market and Exports in order to reduce dependence on OE segment. Even among the OE segment, dependence on a few OEs is seen as a risk and steps are being taken to de-risk the same. 

A detailed Risk Assessment Study has been carried gut through an outside consultant and steps are taken to monitor the risk inventory on a regular basis in order to mitigate and minimize the risks wherever possible. 

The Company has taken adequate insurance cover, wherever the risk is insurable. 

The Company has complied with all the safety requirements and norms of the various Government agencies. The Company also faces other normal risks which are faced by any industrial undertaking of similar size.

Notes on Accounts:

Continent Liabilities not provided for:	31.03.2008 (Rs. In Million)	31.03.2007 (Rs. In Million
a)Estimated amount of contracts remaining to be executed on capital account	45.606	21.997
b)On Guarantee executed by Company’s Bankers	0.085	0.100
c)On Letters of Credit opened by Company’s Bankers	293.249	79.169
d) Exice Duty under Dispute	23.408	30.501
e)Sales Tax under Dispute	3.361	3.312
f)Customs duty on goods lying at Bonded Warehouse	27.718	0.321

Information pursuant to clause 4 (ix) (b) of the Companies (Auditor’s Report) Order, 2003 in respect of dues

disputed, not deposited, pending with various authorities:

Forum where dispute is Pending	Excise Duty	Sales Tax Rs. Millions
High Court	--	2.172
Commissioner	6.011	0.061
Assistant Commissioner	1.597	0.362
Appellate Tribunal	15.800	0.082
Assessing Officer	--	0.684
Total	23.408	3.361

Nature of charge created against secured loans:

a) Working Capital Facilities availed from State Bank of India are secured by a first charge by way of Hypothecation of stock of raw materials, stores, work-in-progress, finished goods and book debts;

b) Term Loan availed from State Bank of India is secured by hypothecation of specified movable Plant & Machinery located at Company’s Plant at Vellaripatti Village, Madurai including 1 No. 1250 KW Wind Electric Generator located at Vadavalli Village, Palladam Taluk, Coimbatore District. Further, the term loan of State Bank of India is secured by equitable mortgage by deposit of title deeds of 1.90 acres of land in survey No. 519/1 B2, located at Narasingampatti Village, Madurai.

Fixed Assets

• Land
• Buildings
• Plant and Machinery
• Electrical Installation
• Furniture and Fixtures
• Vehicles

PROFILE

The company is Part of the TVS Group, the largest Auto Ancillary group with a turnover of over US$ 2.2 billion.

The company Manufactures Industrial Pneumatic Tyres, Farm and Implement Tyres, Skid Steer Tyres, Multipurpose Tyres and Vintage Tyres at its State - of- the- art manufacturing facility at Madurai, Tamilnadu, India.

The company also has the distinction of being India's leading two wheeler tyre manufacturer , rolling out over 9 million tyres annually and enjoying highest share with Vehicle manufacturer backed by a strong network of over 2050 Dealers and 20 Depots across the country.

The company is Accredited with ISO 9001 and ISO 14001 certification and has won TPM Excellence Award. The Company also practices Six Sigma and Lean Manufacturing Techniques.

Specification

• Specially engineered design gives superb road grip
• Optimized radius for excellent driveability
• Rugged looking tyres suitable for all track conditions
• Studs extended upto shoulder for better cornering
• Reinforced casing for absorbing shocks and impacts
• Good aesthetic appearance

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 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 :

Their 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.

Their 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.46.94
UK Pound	1	Rs.85.57
Euro	1	Rs.67.79

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	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--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		63

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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