MIRA INFORM REPORT

Report Date :

05.01.2011

IDENTIFICATION DETAILS

Name :	ESSILOR MANUFACTURING INDIA PRIVATE LIMITED
Formerly Known As :	INDIAN OPHTHALMIC LENSES MANUFACTURING COMPANY PRIVATE LIMITED
Registered Office :	No.48, L and M Kiadb Industrial Area, Doddaballapur, Bangalore – 561203, Karnataka
Country :	India
Financials (as on) :	31.12.2009
Date of Incorporation :	12.05.1998
Com. Reg. No.:	08-23722
CIN No.: [Company Identification No.]	U85110KA1998PTC023722
TAN No.: [Tax Deduction & Collection Account No.]	BLRE04087G
PAN No.: [Permanent Account No.]	AAACI4572J
Legal Form :	Private Limited Liability Company.
Line of Business :	Manufacturer of Plastic Ophthalmic Lenses.

RATING & COMMENTS

MIRA’s Rating :

B (26)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 4900000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. There appears some accumulated losses recorded by the company. However, Trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some caution.

NOTES:

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

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INFORMATION DECLINED BY

Name :	Mr. Arvind
Designation :	Accounts Departments
Date :	04.01.2011

LOCATIONS

Registered Office/ Factory :	No.48, L and M Kiadb Industrial Area, Doddaballapur, Bangalore – 561203, Karnataka, India
Tel. No.:	91-80-27623492/ 93/ 94
Fax No.:	91-80-27622558
E-Mail :	priyag@essilor.in
Website :	http://www.essilorindia.com

DIRECTORS

(AS ON 09.06.2010)

Name :	Mr. Fontanet Xavier
Designation :	Director
Address :	3 RUE Charles Lamourex, Paris 075016, France – 075016
Date of Birth/Age :	09.09.1948
Date of Appointment :	24.08.2006
Name :	Mr. Brignon Claude
Designation :	Director
Address :	6, Avenue Bara LA LA, Varenne, ST Hilaire, France - 094210
Date of Birth/Age :	17.01.1950
Date of Appointment :	15.09.1998
Name :	Mrs. Carol Xueref
Designation :	Director
Address :	52, Boulevard Charles De Gaulle Sonnois, Paris – 95110, France
Date of Birth/Age :	09.12.1955
Date of Appointment :	12.12.2002
Name :	Mr. Mazzone Jean Pierre
Designation :	Director
Address :	Somerset Lake Apt, 2101 Sukhumvit Soi 16, Bangkok – 010110, Thailand
Date of Birth/Age :	04.05.1950
Date of Appointment :	01.04.2002
Name :	Mr. Peter Cauwelier Maurice
Designation :	Director
Address :	41/99-100, 8^th Floor, SOI Phummichit Sukhumvit Road, Khlongtoei, District Bangkok – 10110, Thailand
Date of Birth/Age :	01.06.1967
Date of Appointment :	12.06.2009
Name :	Mr. Manoj Kumar Arora
Designation :	Additional Director
Address :	Flat No.105, Green Hall Residency, Cunningham Road, Bangalore – 560052, Karnataka, India
Date of Birth/Age :	15.04.1962
Date of Appointment :	28.09.2010
Email :	aroram@essilor.in

KEY EXECUTIVES

Name :	Mr. Manoj Kumar Arora
Designation :	Manager
Address :	Flat No.105, Green Hall Residency, Cunningham Road, Bangalore – 560052, Karnataka, India
Date of Birth/Age :	15.04.1962
Date of Appointment :	28.09.2010
Email :	aroram@essilor.in
Name :	Mrs. Priya Gowari shankor
Designation :	Company Secretary
Address :	1519/16 B Block, Sahakara Nagar, Bangalore – 560092, Karnataka, India
Date of Birth/Age :	18.12.1977
Date of Appointment :	28.10.2002
Name :	Mr. Arvind
Designation :	Accounts Departments

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 09.06.2010)

Names of Shareholders	No. of Shares
Essilor International SA, France	164088999
Mazzone Jean Pierre	1
Total	164089000

(AS ON 30.06.2010)

Category	Percentage
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	99.99
Directors or relatives of directors	0.01
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Plastic Ophthalmic Lenses.

Products :

Products Description	Item Code No.
Spectacle Lenses of Other Materials	90015000

PRODUCTION STATUS (AS ON 31.12.2009)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Spectade Lenses of Other Materials	Numbers	NA	9,000,000	17,75,066
Rx Lenses Surfacing	Numbers	NA	9,76,608	747,101

NOTE:

1] The company is exempt from the licensing provisions of the Industries (Development regulation) Act. 1951.

2] The installed capacity has been certified by the company management on triple shift basis and relied upon by the Auditors, this being a technical matter.

3] Figures in brackets relate to previous year.

GENERAL INFORMATION

No. of Employees :	Not Divulged by the Management.
Bankers :	Not Available

Banking Relations :	--
Auditors :
Name :	Kalyaniwalla and Mistry (Partner - Cyrus Jal Bharucha) Chartered Accountant
Address :	No.102, 2^nd Floor, Gangadhara Chetty Road, Bangalore – 560042, Karnataka, India
Tel./ Fax No.:	91-80-25549666/ 2514977/ 41133305
Holding Company :	· Essilor International SA, France
Fellow Subsidiary Company	· Satisloh-GmbH · Satisloh-Italy · Satisloh-Hong Kong · Organic Lenses · Optodev · Optical Supply of Asia · Essilor Manufacturing Thailand Company · Essilor Manufacturing Philippines Limited · Essilor Germany · Essilor Asia · Essilor Limited, UK · Essilor Optical Thailand Company limited · Essilor India Private Limited · Nassau Lens · PT Essilor Indonesia · Transitions Optical India Private Limited · Transition Optical Limited · BBGR France · Shanghai Essilor Oprical company Limited · Gentex Optical Inc. · Nikkon Essilor Company Limited · Essilor of America

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
170000000	Equity Share	Rs.10/- each	Rs.1700.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
164089000	Equity Share	Rs.10/- each	Rs.1640.890 Millions

NOTE:

Of the above

1] 3250000 Equity shares are allotted as fully paid pursuant to a contract without payments being received in cash.

2] Entire Equity shares are held by Essilor International, SA, France, the Holding Company and its nominee

3] 68929000 Equity Shares of Rs.10/- each fully paid, issued during the year.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2009	31.12.2008	31.12.2007
SHAREHOLDERS FUNDS
1] Share Capital		1640.890	951.600	635.620
2] Share Application Money		0.000	140.940	168.000
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		(412.976)	(322.240)	(301.519)
NETWORTH		1227.914	770.300	502.101
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	0.000	0.000
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		1227.914	770.300	502.101
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		440.079	134.983	129.112
Capital work-in-progress		41.392	254.857	8.779
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	233.999	186.339	157.003
	Sundry Debtors	126.301	63.839	71.128
	Cash & Bank Balances	38.683	212.911	183.733
	Other Current Assets	7.486	7.724	6.887
	Loans & Advances	570.501	14.142	5.641
Total Current Assets		976.970	484.955	424.392
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	217.182	98.860	54.760
	Other Current Liabilities	10.796	1.505	0.771
	Provisions	5.457	4.130	4.651
Total Current Liabilities		233.435	104.495	60.182
Net Current Assets		743.535	380.460	364.210
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
Assets Held for Disposal		2.908	0.000	0.000
TOTAL		1227.914	770.300	502.101

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2009	31.12.2008	31.12.2007
	SALES
		Income
		Other Income
		TOTAL	605.980	196.554	188.188
Less	EXPENSES
		Manufacturing and Other Expenses	545.724	186.990	170.220
		Discounting Operations Write Off	91.350	0.000	0.000
		TOTAL	637.074	186.990	170.220
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		(31.094)	9.564	17.968
Less/ Add	DEPRECIATION/ AMORTISATION		59.273	30.000	29.209
	PROFIT BEFORE TAX		(90.367)	(20.436)	(11.241)
Less	TAX		0.369	0.285	0.200
	PROFIT AFTER TAX		(90.736)	(20.721)	(11.441)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(322.240)	(301.519)	(290.078)
	BALANCE CARRIED TO THE B/S		(412.976)	(322.240)	(301.519)
	EARNINGS IN FOREIGN CURRENCY
		Sale of Goods	558.440	141.636	141.699
	TOTAL EARNINGS		558.440	141.636	141.699
	IMPORTS
		Raw Materials	452.852	98.747	72.098
		Stores & Spares	33.389	10.390	12.591
		Capital Goods	109.761	177.603	7.912
		Others	0.000	0.000	0.000
	TOTAL IMPORTS		596.002	286.740	92.601
	Earnings Per Share (Rs.)		(0.61)	(0.25)	(0.19)

KEY RATIOS

PARTICULARS		31.12.2009	31.12.2008	31.12.2007
PAT / Total Income	(%)	(14.97)	(10.54)	(6.08)
Return on Total Assets (PBT/Total Assets}	(%)	(6.38)	(3.30)	(2.03)
Return on Investment (ROI) (PBT/Networth)		(0.07)	(0.03)	(0.02)
Debt Equity Ratio (Total Liability/Networth)		0.19	0.14	0.12
Current Ratio (Current Asset/Current Liability)		4.19	4.64	7.05

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS:

(Rs. In Millions)

Particulars	31.12.2009	31.12.2008	31.12.2007
Sundry Creditors	217.182	98.860	54.760

PERFORMANCE FOR THE YEAR

During the year, the Rx Laboratory was fully operational, with a steady ramp up of volumes. The Rx Lab has been set up as an EOU Unit and would meet primarily the needs of the European market. Production of the mass production casting line ceased on June 2009. The Hard Coating Line ceased production in January 2010. In the mass production line, the company has produced 17,75,066 lenses (last year 47,39,390 lenses) and sold 2,497,469 lenses (last year 5,672,599 lenses) during this period. In the Rx Laboratory, the Company has surfaced 747,101 lenses and sold 715,777 lenses.

EXPORTS

Exports continue to contribute significantly to the Company’s revenues, especially with the setting up of the Rx Laboratory as a 100% EOU. Out of the total sales of INR 584 Mb, exports consisted of INR 558 Mio (96%) and domestic sales consisted of INR 26 Mio (4%).

CONTINGENT LIABILITIES

(Rs. In Millions)

Particulars	31.12.2009	31.12.2008
Excise Duty Demand **	37.348	37.348
Demand from Assistant Commissioner of Income Tax	0.797	--
Customs Bond****	625.000	57.188
C1airn on Company not acknowledged as debt	0.273	0.273

NOTE:

** The company received an order from The Commissioner of Central Excise Bangalore, on February 14^th 2008 demanding a sum of Rs.37.348 Millions (excluding interest) for the period from March 2002 to February 2006, towards excise duty and penalty on the domestic clearances of its semi finished lenses during the said period, As per the order, the company is eligible to avail the benefit of CENVAT Credit under the prevailing CENVAT Credit Rules. Based on the expert opinion of its legal counsel, the company has provided for a sum of Rs.1.272 million in its books pertaining to the period 2005-06, comprising of Excise Duty (net) and interest only. There has been no willful suppression on the part of the company; hence no provision for penalty has been made. Further the company has been advised by the legal counsel that the demand pertaining to the period prior to 2005-06, stands time barred by the Limitation provisions of the Central excise Act 1944 and hence4 is not tenable. Presently the case is under appeal with CESTAT, South Zonal Bench, Bangalore. The Tribunal in its order dated 20^th January 2009, has granted stay, until the appeal is disposed off based on the merit of the case.

*** The Company received a demand of Rs.0.797 million from the Assistant Commissioner of Income Tax for the Previous Year 2005-06 on 17^th November 2009. The demand was made in pursuance of the assessment order dated 11^th November 2009 disallowing an amount of Rs.1.968 millions pertaining to setoff of brought forward loss and certain other expenses. The Company has preferred an appeal before the Commissioner of Income Tax (Appeals). However as a matter of abundant caution, the Company after examining the other aspects of the order, has pad a s of Rs.0.500 million under protest.

** The Company has been granted permission by the Office of the Development Commissioner, Cochin Special Economic Zone, vide its Letter of Permission dated June 13^th, 2008 ., to set up a Gundred per cent export Oriented Unit. To this effect the company has executed a bond of Surety with The Assistant Commissioner of Customs, guaranteeing its fulfillment of the Export Obligation.

FIXED ASSETS:

· Freehold Land

· Building

· Plant and Machinery

· Computers

· Furniture and fixtures

· Vehicles

· Office Equipments

WEBSITE DETAILS:

PROFILE:

Essilor India is a 100% subsidiary of Essilor International. The Company through its excellent services, quality products and a wide network of distributors and franchise labs has been able to revolutionize the Indian ophthalmic lens market and cause a shift from the predominant glass lenses to the safer and more superior plastic lenses.

Essilor International S.A., France a Euro 2.4 billion world leader in ophthalmic lenses and other allied products. Essilor entered the Indian Market through a joint venture with SRF Limited, New Delhi in 1998. The Indian Subsidiary was incorporated as Essilor SRF Optics Private Limited.

The company has since risen to the position of market leader in the Indian Plastic Lens segment of the Ophthalmic Industry.

After the exit of SRF Limited at the end of 2004, the company changed its name to Essilor India Private Limited.

Essilor offers a wide range of the world's best lenses- Varilux® range of Progressive Lenses, Crizal® Hard Multicoated Lenses and Titus™ Hard Coated Lenses- which have set benchmarks for quality and performance. "Airwear®" a new generation polycarbonate lens is suitable for all lifestyles.

Besides these products, Essilor has an impressive array of photochromic, tinted and high index lenses as well as lenses for special applications.

Essilor also has brought international best practices into India in the areas of training and promotional activities.

Essilor Lenses are available across the country with all leading opticians.

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.44.84
UK Pound	1	Rs.69.32
Euro	1	Rs.59.79

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	--
--CREDIT LINES	1~10	3
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	MO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		26

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.