MIRA INFORM REPORT

Report Date :

16.08.2011

IDENTIFICATION DETAILS

Name :	TIPS INDUSTRIES LIMITED
Registered Office :	601, Durga Chambers, 6^th Floor, Opposite B P L Gallery, 278/E, Linking Road, Khar (West), Mumbai – 400052, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	08.05.1996
Com. Reg. No.:	11-099359
Capital Investment / Paid-up Capital :	Rs.173.059 Millions
CIN No.: [Company Identification No.]	L92120MH1996PLC099359
TAN No.: [Tax Deduction & Collection Account No.]	MUMT04974E
PAN No.: [Permanent Account No.]	AAACT5284A
Legal Form :	Public Limited Liability Company, the companies shares are listed on this stock exchange.
Line of Business :	The business areas where subject operates are: Music Movies Artist Management Distributors
No. of Employees :	Not Divulged by the management

RATING & COMMENTS

MIRA’s Rating :

Ba (45)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 3200000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments terms are reported to be usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

INFORMATION DECLINED BY

Name :	Mr. Ashwin
Designation :	Accounts Department
Date :	12.08.2011

LOCATIONS

Registered Office :	601, Durga Chambers, 6^th Floor, Opposite B P L Gallery, 278/E, Linking Road, Khar (West), Mumbai – 400052, Maharashtra, India
Tel. No.:	91-22-66431188
Fax No.:	91-22-66431189
E-Mail :	response@tips.in
Website :	www.tips.in
Factory :	Silvassa: Plot No. 22, Survey No. 126, Amli, Silvassa - 396 230. Dadra and Nagar Haveli (UT), India

DIRECTORS

As on : 05.08.2010

Name :	Mr. Kumar S Taurani
Designation :	Managing Director and Chairman
Name :	Mr. Ramesh S Taurani
Designation :	Managing Director
Appointment :	27.09.2005
Name :	Mr. Amitabh Mundhra
Designation :	Director
Name :	Ms. Radhika Pereira
Designation :	Director
Name :	Ms. Sunita Menon
Designation :	Director
Appointment :	27.09.2005
SENIOR MANAGEMENT :
Name :	Mr. Shyam Lakhani
Designation :	Vice President - Administration
Name :	Mr. Ishwar Advani
Designation :	Vice President - Operations
Name :	Mr. I. T. Gursahani
Designation :	Vice President - Legal and Corporate Affairs
Name :	Mr. Kunal Taurani
Designation :	Vice President - Music

KEY EXECUTIVES

Name :	Ms. Bhoomi Thakkar
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.06.2011

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of promoter and Promoter Group
1) Indian
a) Individuals / Hindu Undivided Family	9517084	59.64
2) Foreign
(B) Public Shareholdings
1) Institutions	9517084	59.64
2) Non – Institution
a) Bodies corporate	2491229	15.61
b) Individuals
i. Individual Shareholders holding nominal share capital upto Rs.0.100 Million	2745428	17.20
ii. Individual Shareholders holding nominal share capital in excess Rs.0.100 Million	998086	6.25
c) Any other	206873	1.30
i) Clearing Member	153752	0.96
Non Residential Individuals	53121	0.33
Total	15958700	100.00

Note :

1. Promoter and Promoter Group

Name of Shareholder	Number	As a% of Grand Total
Ramesh Sadhuram Taurani	2,375,684	14.89
Kumar S Taurani	2,372,184	14.86
Renu K Taurani	2,376,933	14.89
Varsha R taurani	2,373,433	14.87
Shyam M Lakhani	7,000	0.04
Kavita S. Lakhani	4,500	0.03
Rajeev Sogani	7,350	0.05
Total	9,517,084	59.64

2. Public Shareholding more than 1% of the Total No. of Shares

Name of Shareholder	Number of Shares	Shares as % of Total No. of Shares
Shastha Advisors Private Limited	603,750	3.78
Matangi Traders and Investors Private Limited	200,000	1.25
Prithviraj Saremal Kothari	208,299	1.31
Pasha Finance Private Limited	466,000	2.92
Total	1,478,049	9.26

BUSINESS DETAILS

Line of Business :

The business areas where subject operates are:

1. Music
2. Movies
3. Artist Management
4. Distributors

Products :

Particulars	Item Code No.:
Pre Recorded Audio Cassettes	8524-32
Pre Recorded Audio Compact discs	8524-90
Cinematographic Film	Not Applicable

GENERAL INFORMATION

No. of Employees :

Not Divulged by the management.

Bankers :

· IDBI Bank Limited, IDBI Tower, WTC Complex, Cuffe Parade, Colaba, Mumbai – 400005, Maharashtra, India

· Bank of Baroda, Everest Building, Tardeo Road, Mumbai - 400 034, Maharashtra, India

Facilities :

Particulars	Rs. In Millions 31.03.2011	Rs. In Millions 31.03.2010
Secured Loan
From Banks Term Loans Cash Credit Accounts	199.474 103.288	297.859 80.731
From Others Term Loan	0.000	26.931
Total	302.762	405.521
Unsecured Loan
Fixed Deposits From Directors From Others	30.500 204.900	58.500 82.700
Total	235.400	141.200

Notes :

Secured Loans from Banks :

Cash Credit Loans are secured by mortgage of deposit of title deeds of Land and Building situated at Silvassa and Palghar and first charge, ranking pari passu by way of hypothecation of Raw materials, Finished Goods and Book Debts are further secured by personal guarantee / mortgage of properties owned by one of the directors of the Company/ relatives.

Term Loans from bank are secured by hypothecation and mortgage of the properties. Out of total Term Loans of Rs. 0.195 (Previous year Rs. 0.295) outstanding as on balance sheet date, Rs. 0.045 (Previous year Rs. 0.124) are payable within one year. The loans are counter guaranteed by the Managing Director.

Vehicle loans are secured by hypothecation of vehicles acquired on equitable monthly installment (EMI) system. The amount repayable within the financial year 2011-12 is Rs. 0.002 (Previous year Rs. 0.001).

Unsecured Loans

Unsecured Loans repayable within 1 year is Rs. 0.235 (Previous year Rs. 0.141)

Banking Relations :	--
Auditors :
Name :	B K Khare and Company Chartered Accountant
Address :	706/708, Sharda Chambers, New Marine Lines, Mumbai 400020, Maharashtra, India
Other Related Parties :	· Tips Exports · Tips Finance and Lachmi Sadhuram Taurani Charitable Trust

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
20000000	Equity Shares	Rs.10/- each	Rs.200.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
17305900	Equity Shares	Rs.10/- each	Rs.173.059 Millions

Of the above, Rs.638.400 (Previous Year Rs.638.400) Equity Shares of Rs10/- each, fully paid, were allotted to the shareholders of Tips Films Ltd (TFL) without payment being received in cash and as a consideration for acquisition of shares in TFL in accordance with the swap ratio determined.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		159.587	173.059	173.059
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		635.189	679.161	619.631
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		794.776	852.220	792.690
LOAN FUNDS
1] Secured Loans		302.762	405.521	452.460
2] Unsecured Loans		235.400	141.200	114.900
TOTAL BORROWING		538.162	546.721	567.360
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		1332.938	1398.941	1360.050
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		328.080	338.878	75.044
Capital work-in-progress		0.000	0.000	272.632
INVESTMENT		0.050	0.050	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	544.291	790.753	830.343
	Sundry Debtors	229.027	93.249	86.389
	Cash & Bank Balances	6.365	44.537	50.965
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	377.505	362.754	337.491
Total Current Assets		1157.188	1291.293	1305.188
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	69.006	167.284	132.741
	Other Current Liabilities	60.030	38.621	137.402
	Provisions	23.344	25.375	22.671
Total Current Liabilities		152.380	231.280	292.814
Net Current Assets		1004.808	1060.013	1012.374
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1332.938	1398.941	1360.050

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	665.977	842.371	647.246
		Other Income	6.441	8.226	15.735
		TOTAL (A)	672.418	850.597	662.981
Less	EXPENSES
		Decrease/(Increase) in Stock of Work-in-Progress and finished goods.	12.457	1.991	(3.545)
		Material Consumption	5.282	14.145	33.892
		Cost of Production / Distribution of films	389.987	406.504	204.654
		Operating and Other Expenses	143.539	272.932	261.863
		Artist Management Expenses	0.000	0.000	0.550
		Prior Period Adjustment	1.738	0.000	0.000
		TOTAL (B)	553.003	695.572	497.414
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		119.415	155.025	165.567
Less	FINANCIAL EXPENSES (D)		64.208	43.377	21.333
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		55.207	111.648	144.234
Less/ Add	DEPRECIATION/ AMORTISATION (F)		16.213	13.539	9.210
	PROFIT BEFORE TAX (E-F) (G)		38.994	98.109	135.024
Less	TAX (I)		9.164	13.353	20.485
	PROFIT AFTER TAX (G-I) (J)		29.830	84.756	114.539
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		293.601	238.320	151.802
Less	APPROPRIATIONS
		General Reserve	1.500	4.250	5.750
		Proposed Dividend	19.948	21.632	19.036
		Corporate Tax on Proposed Dividend	3.236	3.593	3.235
	BALANCE CARRIED TO THE B/S		298.754	293.601	238.320
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	2.702	4.299	4.184
		Royalty	12.268	1.887	3.945
		Miscellaneous Income (Film Distribution Income)	0.000	55.714	NA
	TOTAL EARNINGS		14.970	61.900	8.129
	Earnings Per Share (Rs.)		1.81	4.90	6.62

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2011
Type	1^st Quarter
Sales Turnover	114.940
Total Expenditure	45.180
PBIDT (Excl OI)	69.760
Other Income	1.030
Operating Profit	70.790
Interest	14.640
Exceptional Items	0.060
PBDT	56.210
Depreciation	4.100
Profit Before Tax	52.110
Tax	10.370
Reported PAT	41.740
Extraordinary Items	0.000
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	41.740

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	4.43	9.96	17.27
Net Profit Margin (PBT/Sales)	(%)	5.85	11.64	20.86
Return on Total Assets (PBT/Total Assets}	(%)	2.62	6.01	9.78
Return on Investment (ROI) (PBT/Networth)		0.04	0.11	0.17
Debt Equity Ratio (Total Liability/Networth)		0.86	0.91	0.17
Current Ratio (Current Asset/Current Liability)		7.59	5.58	4.45

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS

Particulars	Rs. In Millions 31.03.2011	Rs. In Millions 31.03.2010	Rs. In Millions 31.03.2009
Sundry Creditors Total outstanding dues of Creditors	69.006	167.284	132.741

REVIEW OF OPERATIONS

(A) TURNOVER:

During the year, the Company’s net turnover was Rs. 665.977 millions (including Rs. 367.290 millions from Royalty Receipts and 290.625 millions from Film Distribution Income) as compared to turnover of Rs.842.371 millions in the previous year. The other income in current year is Rs. 6.441 millions as compared to Rs. 8.226 millions in the previous year. During the year, the Company earned a profit of Rs. 40.731 millions before provision for taxation and extraordinary and prior period adjustments as compared to profit of Rs. 98.109 millions in the previous year.

(B) FILM PRODUCTION / DISTRIBUTION/ ROYALTY INCOME:

The Company released 1 (One) Hindi cinematographic film in the financial year 2010-2011 – “Prince”. It has also undertaken distribution of 1(One) Punjabi Movie “Mel Kara De Rabba” which was a phenomenal success worldwide. The Company has earned majority of its revenues through exploitation of its music on digital platforms like radio, mobile and internet and licensing its movies for exploitation through Cable TV, Satellite, Pay per view, DTH, IPTV, VOD, etc.

FUTURE OUTLOOK

The Indian entertainment industry is among the fastest growing sectors in the country. In the past two decades entertainment industry in India has witnessed explosive growth. The popularity of Indian entertainment industry goes well beyond the geographical frontiers of the country. As India’s profile rises on the global stage, interest in India’s culture and entertainment industry is also bound to grow.

New Technology is driving the entertainment industry / Music Industry into the next decade, and its boundaries is merging with those of the telecommunications and information technology segments, giving rise to a host of value-added features for consumers and new revenue streams for players in the industry. There is a technology push in the industry with a wide repertoire of film and music becoming available through a variety of legitimate and convenient platforms and options like increased internet penetration, digital downloads, ring tones, introduction of DTH and IP-TV, Video on Demand, Satellite Radio and FM Radio, cable and satellite television, pay per view telecast, etc. Due to the emergence of very prominent 3G services, mobile entertainment is becoming the biggest growth driver in digitization of music & films. Large scale exploitation of movies and music is also undertaken through mobile services like ring tones, caller tunes, games, images, wallpapers, themes, song video downloads, etc.

The company is currently in process of commencing production of a movie directed by the Abbas-Mastan which is the sequel of super hit movie the Race. The star casts of the movie include John Abraham, Saif Ali Khan, Sonakshi Sinha, Deepika Padukone and others are in finalization stage. In the current year company is in process of distributing another Punjabi Movie “Jinhe Mera Dil Lutiya”.

MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMIC OVERVIEW

India’s GDP grew at a healthy 8.6% in 2010-11 (8.0% in 2009-10), largely due to the significant growth in the country’s agriculture sector at 5.4% (0.4% in 2009-10); while the services and industrial sectors maintained their growth. Net capital inflows increased US$ 13.7 bn to touch US$ 36.7 bn as on March 31, 2011.

INDUSTRY OVERVIEW

In 2010, the Indian media and entertainment industry grew 11% and touched an estimated INR 652 billion in revenues. There was a strong recovery in advertising expenses by 17% to INR 266 billion. While television and print continue to dominate the Indian media and entertainment industry, sectors like gaming, digital advertising and animation VFX grew faster. Overall, the industry is expected to register a CAGR of 14% to touch INR 1,275 billion by 2015.

FILMS:

2010 was a challenging year for the Indian film industry as most films failed to influence the box office. The year saw the release of several successful small and medium-budget movies with unique story lines. The size of the Indian film industry was estimated at INR 83.3 billion in 2010, a decline of 6.7 percent over 2009. The decline in the home video segment was the steepest. Cable and satellite rights grew 33 percent owing to a growing demand from broadcasters. In 2011, as a consequence of the World Cup and IPL, fewer films were released from February to May 2011. Following an impressive line-up from the second half, the industry expects to achieve 9 percent growth. The Indian film industry is projected to grow at a CAGR of 9.6 percent to INR 133.5 billion revenues by 2015 with the contribution of domestic theatrical revenues expected to reduce slightly and share of revenues from cable and satellite rights are expected to increase.

MUSIC:

The year 2010 saw the industry transition from physical to digital platforms. Music sales through digital platforms surpassed physical sales for the first time. Music companies partnered social networking platforms to promote content. Music companies are now gearing to provide consumers with legitimate platforms to download music digitally. Rollout of 3G services, increased mobile and broadband penetration, technological advances and availability of low-cost smart phones are opening new avenues for music access. The Indian music industry (estimated at INR 8.53 billion in 2010) grew 9.64 percent over 2009. The industry witnessed a 28 percent decline in physical music sales netted by a significant 57 percent jump in digital music (via downloads, streaming, internet and mobile phones). The industry is expected to grow at a CAGR of 17 percent to INR 18.66 billion by 2015.

BUSINESS OVERVIEW

Tips enjoys a 25-year record in delivering successful movies and music. The Company produces commercially and criticallyacclaimed cinema, supplemented with strong story lines and backed by popular talent. The company’s successes in the past comprises films like Raja Hindustani, Raaz, Ajab Prem Ki Ghazab Kahani, Kismat Konnection and Race. The year 2010-11 was not as per the Company’s expectations as ‘Prince’, its principal film launch, did not receive a favorable audience response. As a result, revenues from the film segment declined from Rs. 495.000 millions in 2009-10 to Rs. 290.000 millions in 2010-11. The company expects to reverse this decline through a number of initiatives (indicated elsewhere in this report). Tips entered India’s music industry in 1980 by producing regional titles and ventured into Hindi film music in the 1990s, reporting hits like Patthar ke phool and Phool aur Kaante

Over the years, the Company acquired a number of popular film sound tracks including 36 China Town, Parineeta, No Entry, Bewafaa and Raja Hindustani, among others. The company reported success through the music of Ajab Prem Ki Ghazab Kahani and Prince. The Company formed a separate music business division under a head of music business development, which will help unlock hidden value. During the year, Tips acquired music rights for the film Bol, which will enhance revenues.

Tips generates royalties from songs played on radio, mobiles, internet among others. The company possesses the rights to songs from movies like Taal, Pardes, Soldier, Hello Brother and Gupt among others. This generates annuity revenues even as the cost of acquiring these rights has been written off.

Royalty income increased from Rs. 310.000 millions in 2009-10 to Rs. 360.000 millions in 2010-11 and this trend is expected to sustain.

DISCUSSION ON FINANCIAL PERFORMANCE

Income: The Company recorded total income of Rs. 672.400 millions in 2010-11, as compared to Rs. 850.500 millions in the previous year.

EBIDTA: The Company’s EBIDTA stood at Rs. 121.200 millions in 2010-11 as against Rs. 155.000 millions in 2009-10.

PAT: Profit after tax stood at Rs. 29.800 millions in 2010-11 as against Rs. 84.700 millions in the previous year

CONTINGENT LIABILITIES:

Particulars	31.03.2010	31.03.2009
Counter Guarantees given to a Bank on behalf of Managing Director	5.498	7.937
Penalty under FEMA Act *	9.000	9.000

NOTE :

* The Company is hopeful of favorable decisions for the appeal pending before the Honorable able Supreme Court. The Honorable Supreme Court has granted stay until disposal of petition.

UN-AUDITED FINANCIAL RESULTS (PROVISIONAL) FOR THE QUARTER ENDED 30^TH JUNE, 2011

(Rs. In millions)

Particulars	Quarter Ended 30.06.2011 (unaudited)
(a) Net Sales/ Income from operation	114.941
(b) Other Operating Income	0.000
Total Income	114.941
2. Expenditure
a. Increase(-) /Decrease(+) in Stock in trade and W.I.P.	(0.044)
b. Consumption of Raw-Materials	2.002
c. Purchase of Traded Goods	0.000
d. Cost Of Production / Distribution of films	15.128
e. Copy Right and In house Music Cost	0.074
f. Employees Cost	11.758
g. Depreciation	4.096
h. Other Expenditure	0.111
j. Foreign Exchange Loss	16.156
Total	49.281
3. Profit(+)/ Loss(-) from Operations before other Income Interest and Exceptional Item(1-2)	65.659
4. Other Income-Foreign Exchange Fluctuation-Gain/(Loss)	1.028
5. Profit(+)/ Loss(-) before Interest and Exceptional Item	66.688
6. Interest	14.639
7. Profit(+)/ Loss(-) after Interest but before Exceptional Item (5-6)	52.049
8. Exceptional Items
9. Profit(+)/ Loss (-) from ordinary activities before Tax (7-8)	(0.061)
10. Tax Expenses	(52.110)
11. Net Profit(+)/ Loss (-) from ordinary activities after Tax (9-10)	41.736
12. Extraordinary Items	0.000
13. Net Profit (+)/ Loss(-) for the period (11-12)	41.736
14. Paid Up Equity Share Capital (Face Value of Rs.10 Per Share)	1595.87
15. Reserves excluding Revaluation Reserves as per Balance Sheet of Previous Accounting Year	0.000
16. Earning per Share (EPS)
a) Basic and diluted EPS before extraordinary items for the period, for the year to date and for the previous year (not annualised)	2.62
b) Basic and diluted EPS after extraordinary items for the period,for the year to date and for the previous year (not annualised)	2.62
17. Public Shareholding
Number of Shares
% of Share holding	6441616
18. Promoters and promoter group Shareholding	40.36
a) Pledged/Encumbered
- Number of shares	500000
- Percentage of shares (as a % of the total shareholding of promoter and promoter group)	5.25
- Percentage of shares (as a % of the total share capital of the company)	3.13
b) Non-encumbered
- Number of shares	9017084
- Percentage of shares (as a % of the total shareholding of promoter and promoter group)	94.75
- Percentage of shares (as a % of the total share capital of the company)	56.50

SEGMENTWISE REVENUE, RESULTS AND CAPITAL EMPLOYEED

(Rs. In Millions )

		Quarter Ended
Sr. No.	Particulars	30.06.2011
1	Segment Revenue:
	Audio Product Sales / Income	115.249
	Film Distribution/Production Income	(0.091)
	Revenue from Operation	115.159
2	Segment Results:
	Profit (+) / Loss (-) before interest & Tax
	- Audio Product	101.571
	- Film Distribution/Production	(16.996)
	- Others	-
	Less: Interest [Net]	13.828
	Less: Unallocable Corporate Expenses net of unallocable corporate income	18.697
	Profit (+) / Loss (-) before Tax	52.049
3	Capital Employed:
	(Segment Assets - Segment Liabilities)
	- Audio Product Sales	244.516
	- Film Distribution	692.995
	- Unallocable Corporate Assets Less Liabilities	(100.999)
	Total	836.512

Notes :

1. The above unaudited financial results have been reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on 20th July 2011, are subjected to Limited Review by the Statutory Auditors.

2. Considering the nature of business carried on by the company whereby revenues do not necessarily accrue evenly over the year, the results of the quarter may not be representative of the result for the year. As such, the result of the current quarter is not comparable with the result of corresponding quarter / full year.

3. The Company operates in two segments i.e. Audio/Video Products and Film Distribution Rights/ Production. The results of the current quarter and the full year includes income earned from both the segments which has been reported above as per AS-17 on Segment Reporting Issued by ICAI.

4. There were no investor complaints pending to be resolved at the beginning of the Quarter. During the quarter, 1 (One) investor complaint was received and resolved. Accordingly there were no investor complaints pending to be resolved at the end of the quarter.

5. The Previous quarter's / year's figures have been regrouped / rearranged wherever necessary to make it comparable with the current quarter / year.

FIXED ASSETS:

• Land and Building
• Plant and Machinery
• Furniture and Fixtures
• Office Equipments
• Vehicles

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. 45.37
UK Pound	1	Rs. 73.53
Euro	1	Rs. 64.36

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
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	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		45

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	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
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.