MIRA INFORM REPORT

Report Date :

27.09.2008

IDENTIFICATION DETAILS

Name :	CAMLIN LIMITED
Registered Office :	9-B, Nanddeep Industrial Estate, Kondivita Lane, J. B. Nagar, Andheri (East), Mumbai - 400 059, Maharashtra
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	24.12.1946
Com. Reg. No.:	005434
CIN No.: [Company Identification No.]	L24223MH1946PLC005434
TAN No.: [Tax Deduction & Collection Account No.]	MUMC11127E
PAN No.: [Permanent Account No.]	AAACC1647E
Legal Form :	It is a public limited liability company. The company's shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing, Marketing and Trading of stationary articles and related consumer products

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 2400000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track. Available information indicates high financial responsibility of the Company. Trade relations are fair. Fundamentals are strong and healthy. Payments are reported as correct and as per commitments. The Company can be considered good for any normal business dealings.

LOCATIONS

Registered Office :	9-B, Nanddeep Industrial Estate, Kondivita Lane, J. B. Nagar, Andheri (East), Mumbai - 400 059, Maharashtra, India
Tel. No.:	91-22-28360302 / 28366011 / 28327983
Fax No.:	91-22-28366579 / 28368477 / 28211491
E-Mail :	deepak@camlin.com
Website :	www.camlin.com
Corporate Office :	Hilton House, 48/2, Central Road, MIDC, Andheri [East], Mumbai 400093, Maharashtra, India
Tel. No.:	91-22-28360302 / 28366011/28216687 / 28364388
Fax No.:	91-22-28366579 / 28353231
Factory 1 :	M.I.D.C. Boisar, Tarapur, District Thane 401 506, Maharashtra, India
Factory 2 :	M.I.D.C. Taloja, Navi Mumbai 410208, Maharashtra, India
Factory 3 :	101, Gangyal Industrial Area, Phase II, Jammu 180 004, Maharashtra, India
Factory 4 :	Industrial Growth Center, Samba Phase I, Jammu, J and K State.
Factory 5 :	Rajprabha Udyog Nagar, Walive, Vasai (East), District Thane 401 308, Maharashtra, India

DIRECTORS

Name :	Mr. Subhash Dandekar
Designation :	Chairman Emeritus
Name :	Mr. Dilip D. Dandekar
Designation :	Chairman and Managing Director
Name :	Mr. Rajiv M. Dandekar
Designation :	Joint Managing Director
Name :	Mr. Shriram S. Dandekar
Designation :	Executive Director
Name :	Mr. Deepak M. Dandekar
Designation :	Executive Director
Name :	Mr. Ashish S. Dandekar
Designation :	Director
Name :	Mr. Govind G. Desai
Designation :	Director
Name :	Mr. Shrikrishna E. Godbole
Designation :	Director
Name :	Mr. Madhukar P. Khedkar
Designation :	Director
Name :	Mr. Premanand A. Narvekar
Designation :	Director
Name :	Mr. Shishir S. Shirgaokar
Designation :	Director
Name :	Mr. Pramod M. Sapre
Designation :	Director
Date of Ceasing :	24.09.2007
Name :	Mr. Dhananjay N. Mungale
Designation :	Director
Name :	Mr. Anil C Singhvi
Designation :	Director
Date of Appointment :	24.09.2007

KEY EXECUTIVES

Name :	Chetan R Badal
Designation :	Chief Financial Officer
Name :	Mr. Ravindra V. Damle
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 30.06.2008)

Category of Shareholders	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group
Individuals/ Hindu Undivided Family	1558972	25.98
Bodies Corporate	636246	10.60
Foreign
Individuals (Non-Residents Individuals/Foreign Individuals)	135500	2.26
Public shareholding
Institutions
Financial Institutions ^/Banks	430	0.01
Foreign Institutional Investors	1237863	20.63
Non-institutions
Bodies Corporate	315083	5.25
Individuals -i. Individual shareholders holding nominal share capital up to Rs 0.100 Million	1162820	19.38
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	950897	15.85
Non Resident (Non-Rep)	1315	0.02
Non Resident (Rep)	874	0.01
Total	6000000	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing, Marketing and Trading of stationary articles and related consumer products

Products :

Item Code No. (ITC Code)	32.13
Product Description	Artist Colours
Item Code No. (ITC Code)	96.09
Product Description	Wooden Pencils
Item Code No. (ITC Code)	96.08
Product Description	Writing Instruments

· Camlin Crylin Ultra-Soft Acrylic Colours

· Camel Grass Colours (Water Based)

· Camel Wax Crayons

· Camel Student’s Water Colour Cakes

· Camel Student’s Water Colour Tubes

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity
Chemical and Chemical Products	Ltrs./Kgs.	60.98	65.22
Stationary items	Ltrs.	6.36	45.20
Stationary items	Nos./Pks.	2074.06	1474.20
Buik drugs	Kgs.	3.37	0.70

GENERAL INFORMATION

Suppliers :

· Anuroop Packaging

· Asian Pen and Plastic Industries

· Beekay Industries

· Bombay Plastic Works

· Century Caps Industry

· Mayur Colours Limited

· P. P. Industries

· Global Plastics

· Galaxy Industrial Corporation

· Excella Pencils Limited

· Shreeji Industries

· Pratibha Pens Private Limited

· Sagar Enterprises

· Sethia Printers

· Sushart Art Products

· Sahara Plastic Industries

· Uday Manufacturing Company

· Uday Multi Print

No. of Employees :

About 2500

Bankers :

· Bank of Maharashtra

· IDBI Bank Limited

· The United Western Bank Limited

Facilities :

Particulars	As on 31.03.2008 (Rupees in Millions)
SECURED LOAN
[a] Term Loans from Bank and Financial Institutions	107.307
Interest accrued thereon	1.234
[b] Bank Overdrafts/Working Capital Demand Loan (Net of balances in collection accounts)	93.960
Interest accrued thereon	-
Total	202.501
Term Loans include Rs.55.008 millions repayable within one year (2006-2007 Rs.26.063 millions.)
UNSECURED LOAN
Fixed Deposits	1.890
Total	1.890
Includes Rs.0.661 millions repayable within one year (2006-2007 Rs.26.511 millions)

Banking Relations :	Good
Auditors :
Name :	B. K. Khare and Company Chartered Accountants
Address :	Mumbai
Associates/Subsidiaries :	· Camlin North America, Inc, USA · Camlin International Limited · CAFCO Consultants Limited · Camart Industries Limited · Camlink Agencies Limited · Camlink Consultants Private Limited · Dandekar Investments and Consultants Private Limited · Dandekar Print Pack Private Limited · Camlidhan Investments Private Limited · DDI Consultants Private Limited · Nilmac Packaging Industries Limited · Vibha Agencies Private Limited · Triveni Pencils Limited · Excella Pencils Limited · Col Art Camlin Canvas Private Limited · Camelia Management Services Private Limited · Vibha Agencies Private Limited

CAPITAL STRUCTURE

(As on 31.03.2008)

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
6000000	Equity Shares	Rs.10/- each	Rs.60.000 Millions

Out of these shares:

[i] 6000 Equity Shares allotted to vendors as fully paid up shares pursuant to contract without payment thereof being received in cash.

[ii] 3634500 Equity Shares allotted as fully paid up by way of Bonus Shares by capitalization of General Reserve and Share Premium.

[iii] 500000 Equity Shares issued by way of Conversion of Debentures.

[iv] 1200000 Equity Shares issued by way of Preferential Allotment during the year.

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		60.000	48.000	48.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		426.828	210.841	104.654
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		486.828	258.841	152.654
LOAN FUNDS
1] Secured Loans		202.501	125.444	502.089
2] Unsecured Loans		1.890	27.791	95.639
TOTAL BORROWING		204.391	153.235	597.728
DEFERRED TAX LIABILITIES		3.440	3.737	11.367
TOTAL		694.659	415.813	761.749
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		215.095	180.497	411.566
Capital work-in-progress		47.405	14.775	78.792
INVESTMENT		9.891	9.891	11.394
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	392.865	300.958	379.904
	Sundry Debtors	264.182	187.471	289.042
	Cash & Bank Balances	36.010	23.738	18.664
	Other Current Assets	0.729	1.144	0.843
	Loans & Advances	74.695	75.174	115.341
Total Current Assets		768.481	588.485	803.794
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	343.497	400.298	582.634
	Provisions	36.222	27.841	20.220
Total Current Liabilities		379.719	428.139	602.854
Net Current Assets		388.762	160.346	200.940
MISCELLANEOUS EXPENSES		33.506	50.304	59.057
TOTAL		694.659	415.813	761.749

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		2240.300	1963.300	2011.300
Other Income		5.800	470.200	55.600
Total Income		2246.100	2433.500	2066.900
Profit/(Loss) Before Tax		65.000	456.600	(17.500)
Provision for Taxation		26.700	95.900	2.200
Profit/(Loss) After Tax		38.300	360.700	(15.300)
Earnings in Foreign Currency :		35.336	166.656	397.783
Total Imports
Raw Materials		12.945	20.402
Stores & Spares		46.497	18.840
Capital Goods		15.216	4.554
Purchases of Traded Products		6.687	6.107
Total Imports		81.345	49.903	211.427
Expenditures :
	Raw materials	1075.900	1011.600	1090.400
	Excise Duty	95.100	75.800	86.600
	Power and Fuel	18.600	23.700	35.900
	Other Manufacturing Expenses	426.800	259.400	229.400
	Employee Cost	169.200	152.700	174.100
	Selling Expenses	278.800	269.500	250.600
	Miscellaneous Expenses	107.900	111.700	100.800
	Depreciation	37.700	38.500	51.900
	Interest and Financial charges	26.100	37.200	67.000
	Stock Adjustment	(55.000)	(3.200)	(2.300)
Total Expenditure		2181.100	1976.900	2084.400

QUARTERLY RESULTS

Year	30.06.2008
Type	1st Quarter
Sales Turnover	856.600
Other Income	2.000
Total Income	858.600
Total Expenditure	773.400
Operating Profit	85.200
Interest	10.300
Gross Profit	74.900
Depreciation	9.700
Tax	22.100
Reported PAT	42.700

KEY RATIOS

Year	31.03.2008	31.03.2007	31.03.2006
Debt-Equity Ratio	0.48	1.93	3.99
Long Term Debt-Equity Ratio	0.28	1.09	1.93
Current Ratio	1.39	1.01	0.88
TURNOVER RATIOS
Fixed Assets	4.8	3.37	2.84
Inventory	6.46	5.77	5.46
Debtors	9.92	8.24	7.25
Interest Cover Ratio	4.16	1.88	0.99
Operating Profit Margin(%)	6.53	5.53	5.89
Profit Before Interest And Tax Margin(%)	4.85	3.57	3.31
Cash Profit Margin(%)	3.89	2.95	2.66
Adjusted Net Profit Margin(%)	2.21	0.99	0.08
Return On Capital Employed(%)	21.33	13.59	10.76
Return On Net Worth(%)	13.25	9.99	1.24

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Incorporated to take over the business of Dandekar and Company, Subject got its present name in 1988. Starting with stationery products, it has diversified into art materials and pharmaceuticals. Its products are marketed under the popular Camel and Camlin brands. Its stationery division has a wide range of products like fountain pen inks, rubber stamp inks, duplicating inks, adhesives, writing instruments and gift sets, fountain-pen nibs and ball-point pens, erasers, stamp pads, scales, carbon paper, etc. 

The art material division supplies water colours, oil colours, poster colours, drawing inks, crayons, oil pastels, fabric colours, painting brushes, canvas, wooden and mechanical pencils, lead, markers; mathematical, engineering and biological instruments, etc. Bulk drugs like diloxanide fuorate, mebendazole, diazepam, etc, as well as a wide range of formulations (used in treating asthma, skin diseases, rheumatism, etc) are manufactured by the pharmaceutical division. 

Subject started commercial production of high polymer lead in Mar.'90, in technical collaboration with Pilot Corporation, Japan, and has become one of the few companies in the world manufacturing the product. The company's products are exported to east and west Asia, Europe, Africa, Australia, etc.  

Subject has entered into a marketing alliance with Colart Fine Art and Graphics, UK, to market its Winsor and Newton premium range of colour products. Besides expanding its present manufacturing capacities, the company has also set up a plant to manufacture industrial grade synthetic adhesives, which commenced commercial production in Mar.'96. 

The plant for manufacturing bulk drugs/chemicals, commenced commercial production in 1995-96. Camlin International became a wholly-owned subsidiary of the company. 

During 1998-99, the company has raised a sum of Rs.75.000 millions from IDBI through Private Placement of 16.5% Non Convertible Secured Redeemable Debentures for financing capital expenditure and long term working capital.The Erstwhile Stationery and Art Material Divisions have been merged into Consumer Products Division w.e.f. 1st April, 1999. 

The company undertook major expansion in production of anti-oxidant range of products.

REVIEW OF OPERATIONS:

The Company registered an impressive growth in Revenue and Profits during the year. Total Net Sales at Rs. 2137.748 millions as against Rs.1876.666 millions and Profit before tax at Rs.65.033 millions as against Rs. 21.541 millions (excluding non recurring items) represent a robust increase of 13.91% and 201.91% respectively, over the previous year. This increase is a combination of high growth in sales along with optimum product mix, enhanced level of operations, higher margins on new products introduced in the market and overall cost reduction measures adopted by the Company. 

NEW PLANT AT JAMMU 

The Company has setup a new plant at Samba Phase I, Jammu for manufacturing various types of Colours such as Poster Colours, Crylin Colours, Premium Poster Colours, Glass Colours, Ceramic Colours etc. The estimated Capital expenditure is Rs.99.000 millions. The civil construction work is now complete with most of the machines installed at the site. The Company has started trial production during this month and it expects to commence commercial production in the second week of June, 2008 and achieve optimum capacity in the second quarter of the current financial year. 

The various tax benefits/subsidies/exemptions under Excise, Income Tax and other statutes would help the Company gain Competitive advantage and thereby increase its market share. 

DIVIDEND 

Dividend at the rate of Rs. 2.50 per share on 60,00,000 Equity Shares of Rs 10/- each, for the year ended 31st March, 2008. The total dividend outgo amounts to Rs.15.000 millions exclusive of Tax of Rs.2.549 millions to be paid by the Company.  

MANAGEMENT DISCUSSION AND ANALYSIS:

INDUSTRY STRUCTURE AND DEVELOPMENT AND SEGMENTWISE PERFORMANCE: 

The Company offers a wide range of products such as Artist Materials, Hobby Colours, Scholastic Colours, Scholastic Stationery Products, Office Products and Writing Instruments under the Camel and Camlin brands and caters to a vast consumer segment for their Fine Art, Scholastic and Office Stationery needs. 

Indian art material market is divided into sub-segments like Paints, Mediums and Accessories. Similarly it can be categorized as per the user profile where on the top of the pyramid there is serious and high quality artist material patronised by professionals. The hobby material comes in the middle of the pyramid, which includes a very wide range of products and is used by a wide spectrum of people of all ages, regardless of the gender or education. The base is built up of the scholastic art material, including products like crayons, pastels and other economically priced products patronised by a huge population of schools and students. The market for art material in India is growing at a very healthy rate. The phenomenal rise in the recognition and appreciation of Indian art at home and abroad, has given impetus to the fine art material market. The artists are now in position and mood to use better and more expensive inputs to create the work of global standards. 

Whereas Indian Stationery market, can be divided into School Stationery, Office Stationery, Paper products, and Computer Stationery. The growth of this Market is driven by increased spend on educational sector by government, education standard getting improved and opening new categories of education for specialisation and concentration on overall development of students. The office supplies segment is also growing rapidly. Opening of new commercial offices having multi locational presence has helped the organized players with scalability to serve across locations and offer diverse range of products. All this has not only increased demand, but has shifted sales from unorganised to organised sector with premium quality products. The dominance of unorganised market in stationery segment has its impact on the profit pressure for organised sector but due to introduction of VAT and increase tax compliance, they expect a shift in sales from unorganized sector to organised sector. 

The large portfolio of products, well-known brands, and wide distribution network have helped the Company to retain its market leadership position in many product groups, in spite of competition not only from Indian Companies but also from cheap imports from China and South East Asian countries. It has been possible to maintain this position by the continuous efforts for product development and upgradation by the in-house R and D team and continuous brand building activities, which has made the Company's brands household names. 

The Company has taken certain initiatives to improve its value creation potential. Some of these initiatives are: 

· Focus on products, which are at the higher end of the value chain. 

· Portfolio review of businesses to aggressively support business with profitable growth potential. 

· Increased spending on advertisement on T.V. media. 

· Promotion of Art in India by Sponsoring 'Euro Art Tour' by the Camel Art Foundation, which has gained recognition and popularity from Artists Fraternity and expanding the scope of activities of the Foundation. 

· Exploring new areas for Marketing of products like Note Books, Art Accessories and tools, paintings as a part of Business Development Model through outsourcing. 

OUTLOOK, OPPORTUNITIES AND THREATS, RISKS AND CONCERNS: 

Continuous positive development on the economic front, rapid changes in the retail environment and an increasing consumption and aspiration levels for FMCG products present a positive way forward for the Company. The growing young population, rising middle class incomes, changing lifestyles and aspirations present a unique opportunity for a Company. Increased allocations for education in the current Budget and increase in spending on education by public at large will result in strong demand for the products.

Company is also consistently enhancing its operations in an effort to expand and strengthen its competitive margin. Series of strategic initiatives will henceforth help the Company in mitigating the risks of squeeze on margins and paucity of funds for business development.  

Macro economic factors like economic and political developments, natural calamities may affect the Company and industry at large. 

Nevertheless increasing competitive pressures and dumping of imported products at extremely low prices, continue to be a cause of concern for the Company. Prices of raw materials, packing materials continue to rise making an adverse impact on the margins of the some of the products, but the Company expects to increase selling prices of these products over a period of time thereby improving the margins. The year ahead looks exciting. 

INFORMATION TECHNOLOGY: 

The Contribution of Information Technology to the Company's operations cannot be understated. This function has contributed strongly to improved operational efficiencies, inventory minimisation, cost optimisation. 

As reported in last year, the Company had undertaken Implementation of SAP. The management is pleased to inform you that the Company has successfully implemented SAP and has gone live from 1st January, 2008. The system connects factory locations, offices and depots all over India. 

With the introduction of SAP the Company has a robust Business Intelligence platform which would help in improving the manufacturing efficiencies and Supply Chain Management as well as primary and secondary sales can be tracked and analysed against various parameters and benchmarks.  

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY: 

The Company has adequate internal control procedures commensurate with its size and nature of business. The Company has established well-defined written policies and processes across the organisation pertaining to all major activities including authority for approvals. In all cases where a monetary decision is involved various limits and authorities are in place. Management Information System together with in exhaustive budgetary control system covering all major perations forms part of the overall control mechanism that ensures the requisite information related to operations is being prepared and is available for control and review. Internal Auditors independently evaluate adequacy of internal control systems. Based on the observations and recommendations, follow up and remedial measures are being taken including increased area of coverage, if necessary. Observations and Recommendations of the Internal Auditors are discussed by the Audit Committee to ensure effective corrective action. 

CONTINGENT LIABILITIES

· In respect of Guarantees issued on behalf of the Company by its Bankers to the extent of Rs.0.170 Millions (2006-07 – Rs.0.310 millions)

· Corporate Guarantees given to ColArt Camlin Canvas Private Limited Rs.15.000 Millions (2006-2007 Rs.15.000 millions)

· Demands against the Company, either disputed or not acknowledged as debts and not provided for :

	As on 31.03.2008 (Rs. In Millions)
Income Tax	9.788
Sales Tax	4.312
Excise Duty	20.102
Provident Fund	0.067
Modvat	0.910
Service Tax	0.189
Labour Matters	0.813
Others	0.063

FIXED ASSETS

· Freehold Land

· Leasehold Land

· Site Development

· Building Shed

· Plant and Machinery and Equipment

· Vehicles

· ERP Hardware/ Software Cost

· Furniture and Fittings

· Intellectual Property Rights (IPRs)

WEBSITE DETAILS

Profile

Subject, a name synonymous with stationery and Art colours in India, has more than seventy five years of technical expertise and state-of-the-art manufacturing facilities. Subject believes in offering good value for money to the customer. The focus on quality has got the Art material Products like writing instruments to conform to EN-71 standards and the coveted ACMI Certification. The company's core values-entrepreneurial leadership, a belief in innovation, trust, integrity and continuous learning - comprising all aspects of the business.

With a team of more than 1000 personnel employed across India and a distribution network of more than 50,000 retailers catering to a population of 500 million, they ensure that the writing instruments and allied products reach every literate Indian. They have a fully equipped R and D laboratory approved by Dept. of Science and Technology and FDA. Subject is a Public Limited Company, listed on the Bombay Stock Exchange.

They, at Subject, have a diversified product range consisting of Stationery and Writing Instruments, Art Materials, Office Products, Educational and Hobby Products and Adhesives.

With its sight on the global market, Subject is already exporting to the Asia Pacific Region, Middle East, Europe and USA. In the new millennium they are exploring similar opportunities in many more countries.

The Company

Subject is the household name in India reputed for a wide range of high quality products. They have a major presence in Scholastic Stationery, Office Stationery, Fine Art Material, Hobby Art Materials. Subject has sound infrastructure in terms of manufacturing facilities, sales and distribution network and a dedicated workforce in place. Subject are now poised to make the presence felt globally in this new millennium.

The Speciality Ink division

Ink is the heart of any writing and marking instrument and it makes a world of difference to it. Subject has been in the business of marketing fountain pen ink for more than 65 years. In the last two decades they have developed a whole range of speciality inks to meet the diverse needs of the writing and marking instrument industry.

Media and Press

Latest at Camlin

Camelart Foundation’s 7th Northern Region Art Exhibition from 7th to 15th April 2007

Camlin Limited has substantially contributed to the growth of art, artists, art appreciation and art education in India through Camlin Art Foundation. To celebrate the spirit of art, this non-profit organization holds four art exhibitions each year, in the Northern, Southern, Eastern and Western regions that plays host to more than 12,000 professionals and art students.

In continuation with the same, the foundation in association with The Government College of Arts and Department of Fine Arts, Panjab University, Chandigarh will host the 7th Northern Region Art exhibition in Chandigarh from 7th to 15th April at Museum of fine Arts, Panjab University, the exhibition will be open from 10.00 am to 1.00 pm & 2.00 pm to 5.00 pm.

The objective of Camelart Foundations is to provide a platform for art students, amateur artists and professional artists to display their talent.

Besides getting an opportunity to display their work, the artists with the best paintings will also rewarded with grand prizes from Camlin. The entries, categorized into professional artists and art students, are sub divided by the art media like oils, water, acrylics and mixed media. The paintings at the exhibition will be available for sale if the artist so wishes. The first four prizes for each category will get cash prizes and the winners from each region will qualify for the coveted sponsorship by Camlin for the European Art Tour 2007.

The exhibitions inauguration and prize distribution will be through the hands of Padamshri B.N Goswamy on 6th April 2007 at 5.30 pm at Museum of Fine Arts, Punjab University, Chandigarh. All the winners will receive their cash prizes, trophies and certificates during this function.

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 :

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.46.43
UK Pound	1	Rs.85.38
Euro	1	Rs.67.95

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	YES
--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.	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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