MIRA INFORM REPORT

Report Date :

05.01.2011

IDENTIFICATION DETAILS

Name :	GUJARAT GAS COMPANY LIMITED.
Registered Office :	2, Shantisadan Society, Near Parimal Garden, Ellisdridge, Ahmedabad-380006, Gujarat.
Country :	India
Financials (as on) :	31.12.2009
Date of Incorporation :	17.01.1980
Com. Reg. No.:	003623
CIN No.: [Company Identification No.]	L2320GJ1980PLC003623
Legal Form :	A Public Limited Liability Company. Company’s Shares Are Listed On Stock Exchange.
Line of Business :	Processing, Transmission and Distribution of Natural Gas.

RATING & COMMENTS

MIRA’s Rating :

A(61)

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 30181680
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and a reputed company having fine track records. Financial position of the company appears to be sound. Fundamentals are strong and healthy. Trade relations are reported as fair. Business is active. Payments are reported to be regular 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.

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. Prashant
Designation :	Senior Finance Executive
Date :	27.07.2010

LOCATIONS

Registered / Corporate Office :	2, Shantisadan Society, Near Parimal Garden, Ellisdridge, Ahmedabad-380006, Gujarat, India.
Tel. No.:	91-79-26462980/26467876/26460095
Fax No.:	91-79-26466249
E-Mail :	Rajeshwari.sharma@gujaratgas.com
Website :	www.gujaratgas.com
Factory :	SURAT: Adajan Gam, Post Box.No.915, P.O.Navyug College, Surat-395009 CNG OFFICE(SURAT): CNG OFFICE, 3^RD Fllor, Swastik House, Kargil Chowk, Piplod, Surat – 395007 ANKLESHWAR: Surati Bhagol, Umarwada Road, Via Piramal Naka, Ankleshwar – 393001 BHARUCH: Anand Mangal Society, Son Talavadi, Bharuch – 392001 VAPI: Chandralok Complex, Near Cinepark Multiplex, Selvas Vapi Main Road, Chanod, Vapi
Gas receiving location:	SACHIN: Block No.248, GIDC Sachin, Village- Unn, Magdalla-Sachin Road, Surat. Rahadpore: Survey no.75/123, At and Post Rahadpore, Palej – Tankaria Road, Bharuch. Mora (Surat) Survey no.150, Opposite Reliance Gate No 3-B, Surat – Hazira Road, Mora, Surat. Amboli: Plot no.70-71, Amboli, Ankleshwar. Palsana: Survey no.168 and 168/p, Village – Lingad, Taluka – Palsana, District – Surat Surat: Plot no.87-88, Mayavanshi Mohallo, Adajan Gam, Surat. Valia: Block no.192, Kosamdi Village, Taluka-Ankleshwar, District – Bharuch-392001. Vadoli: Survey no. 546/1, Village – Vadoli, Taluka-Olpad, District- Surat Atodora: R.S. No. 64/1, and 64/2, Village-Atodara, Tluka-Olpad, District-Surat Jhagadia: Plot No-773/A, GIDC Jhagadia, Ankleshwar, District-Bharuch

DIRECTORS

Name :	Mr. Hasmukh Shah
Designation :	Chairman
Name :	Mr. Derek Alan Fisher
Designation :	Director
Name :	Mr. Rajeev Khanna
Designation :	Director
Name :	Prof. Pradip Khandwalla
Designation :	Director
Name :	Mr.Jai Patel
Designation :	Director
Name :	Mr. Ajit Kapadia
Designation :	Director
Name :	Mr. Bikash.C.Bora
Designation :	Director
Name :	Mr. Shaleen Sharma
Designation :	Managing Director

KEY EXECUTIVES

Name :	Ms. Rajeshwari Sharma
Designation :	Company Secretary
Name :	Mr. David Brooks
Designation :	Director-Technical
Name :	Mr. Himanshu .K. Upadhyay
Designation :	Director-Policy and Corporate Affairs
Name :	Mr. L. Balasundaram
Designation :	Director-Human Resources and Administration
Name :	Ms. Priyaranjan Sekhon
Designation :	Legal Counsel
Name :	Mr. Rahul Bhatia
Designation :	Director-Commercial
Name :	Mr. Sadhan Banerjee
Designation :	Director-Management Services
Name :	Mr. Sugata Sicar
Designation :	Director-Finance
Name :	Mr.Nakul Raheja
Designation :	General Manager- Regulations and New Business Development
Name :	Mr. Nitin Mehta
Designation :	General Manager – HSSE
Name :	Mr. Sanjeev Gupta
Designation :	General Manager-Internal Audit

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.12.2009

Names of Shareholders	No. of Shares	Percentage of Holding
Resident Individuals	12207410	9.52
Foreign Institutional Investors(FIIs)	18551857	14.47
Non-resident Indians (NRIs)	299962	0.23
Indian Companies	1545691	1.21
Mutual Funds and UTI	7759398	6.05
Public Financial Institutions, Government Companies and Banks	4100377	3.20
Foreign Promoters	83518750	65.12
Others	266555	0.20
Total	128250000	100.00

BUSINESS DETAILS

Line of Business :

Processing, Transmission and Distribution of Natural Gas.

GENERAL INFORMATION

No. of Employees:

500 (Approximately) (In office 70 + In factory 430) (Confirmed by Mr. Rajesh from the Accounts)

Bankers :

• HDFC Bank
• ICICI Bank Limited
• Standard Chartered Bank
• State Bank of India

Facilities :

DEPOSITS	31.12.2009 (Rs.in millions)	31.12.2008 (Rs. In millions)
From Customers	1514.810	1235.000
From GAIL (India) Limited	38.690	38.690
Total	1553.500	1273.690

Banking Relations :	--
Auditors :
Name :	Price Waterhouse Chartered Accountant
Address :	Building 8,7^th and 8^th Floor, Tower B, DLF Cyber City, Gurgaon – 122022, Haryana.

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
140,000,000	Equity Shares	Rs. 2 each	Rs.280.000 millions
17,000,000	7.5% Redeemable Cumulative Non Convertible Preference Shares	Rs.10 each	Rs.170.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1,285,250,000	Equity Shares	Rs. 2 each	Rs.256.50 millions
	(Out of the above 83,518,750(Previous year 41,759,375) equity shares are held by holding company BG Asia Pacific Holdings Pte.Limited,the ultimate holding company being BG Group plc.) (Out of the above 64,125,000 (Previous year nil)equity shares allotted as fully paid-up by way of bonus shares during the year)
14,400,000	7.5% Redeemable Cumulative Non Convertible Preference Shares	Rs. 10 each	Rs.144.00 millions

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		400.500	272.250	27.230
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		7123.630	6709.630	535.920
4] (Accumulated Losses)		0.000	0.000	0.000
5] Stock Options Outstanding Account		21.290	2.880	0.000
NETWORTH		7545.420	6984.760	563.150
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		1553.500	1273.690	111.920
TOTAL BORROWING		1553.500	1273.690	111.920
DEFERRED TAX LIABILITIES		604.860	530.060	58.630
TOTAL		9703.780	8788.510	733.700
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		5740.980	4714.880	462.430
Capital work-in-progress		865.730	812.660	111.050
Capital Inventory		489.960	531.440	0.000
Lease Adjustment		0.000	0.000	(11.89)
INVESTMENT		4364.540	3466.700	229.270
DEFERREX TAX ASSETS		0..000	0.000	11.420
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	110.920	101.300	11.160
	Sundry Debtors	1138.980	959.670	87.560
	Cash & Bank Balances	72.160	68.460	7.710
	Other Current Assets	99.450	139.240	0.000
	Loans & Advances	266.220	233.350	38.080
Total Current Assets		1687.730	1502.020	144.510
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	2116.650	1896.760	183.420
	Other Current Liabilities	0.000	0.000	0.000
	Provisions	1329.400	346.990	31.630
Total Current Liabilities		3446.050	2243.750	215.050
Net Current Assets		(1758.320)	(741.730)	(70.540)
MISCELLANEOUS EXPENSES		0.890	4.560	1.960
TOTAL		9703.780	8788.510	733.700

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2009	31.12.2008	31.12.2007
	SALES
		Income	14176.390	12964.670	1194.350
		Other Income	253.200	393.040	20.350
		TOTAL (A)	14429.590	13357.710	1214.700
Less	EXPENSES
		Office Expenses	910.350	883.060	0.000
		Personnel Expenses	447.970	409.820	0.000
		Advertising Expenses	0.000	0.000	27.370
		Material Consumed / Processed	10032.060	9337.840	829.620
		Deferred Revenue Expenditure Written Off	3.670	15.000	0.000
		Other Manufacturing Expenses	0.000	0.000	19.020
		Power and Fuel Cost	0.000	0.000	10.430
		Employee Cost	0.000	0.000	29.270
		Miscellaneous Expenses	0.000	0.000	26.110
		TOTAL (B)	11394.050	10645.720	941.820
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		3035.540	2711.990	272.880
Less	FINANCIAL EXPENSES (D)		1.360	1.110	0.19
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		3034.180	2710.880	272.690
Less/ Add	DEPRECIATION/ AMORTISATION (F)		460.630	404.360	37.080
	PROFIT BEFORE TAX (E-F) (G)		2573.550	2306.520	235.610
Less	TAX (H)		822.300	718.400	76.520
	PROFIT AFTER TAX (G-H) (I)		1751.250	1588.120	159.090
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		4949.010	3758.600	257.030
Less	APPROPRIATIONS
		Transfer to General Reserve	176.000	160.000	0.000
		Dividend	1036.800	203.180	19.240
		Tax on Dividend	172.200	34.530	0.000
		Appropriations	0.000	0.000	40.270
	BALANCE CARRIED TO THE B/S		5315.260	4949.010	356.610
	IMPORTS
		Stores & Spares	21.190	15.920	0.000
		Capital Goods	19.800	16.940	0.000
	TOTAL IMPORTS		40.990	32.860	0.000
	Earnings Per Share (Rs.)		13.560	12.280	-

KEY RATIOS

PARTICULARS		31.12.2009	31.12.2008	31.12.2007
PAT / Total Income	(%)	12.13	11.88	13.09
Net Profit Margin (PBT/Sales)	(%)	18.15	17.79	19.72
Return on Total Assets (PBT/Total Assets}	(%)	40.84	37.10	38.81
Return on Investment (ROI) (PBT/Networth)		0.34	0.33	0.41
Debt Equity Ratio (Total Liability/Networth)		0.45	0.32	0.38
Current Ratio (Current Asset/Current Liability)		0.48	0.66	0.67

QUARTERLY RESULTS

PARTICULARS	March 2010	June 2010
	1^st Quarter	2^nd Quarter
Gross Sales	4077.200	4163.300
Other Income	118.600	13.840
Total Income	4132.600	4232.200
Total Expenditure	3073.400	3251.600
PBIDT	1059.200	980.600
Interest	00.3000	03.200
PBDT	1058.900	977.400
Depreciation	125.300	131.000
Tax	307.000	247.000
Deferred Tax	01.800	21.300
Reported PAT	624.800	578.100
Extra-Ordinary Items	0.000	0.000
Adjusted Profit After Extra Ordinary Item	624.800	578.100

LOCAL AGENCY FURTHER INFORMATION

MANAGEMENT ANALYSIS
 
· Industry Structure and developments
 
 Natural gas currently constitutes about 9% of India's primary basket. This is expected to grow to 23% of the primary energy basket by the year 2020. There is therefore a significant growth potential for the natural gas business in India. Availability of additional sources of long term gas at optimal prices will play a major role in determining growth in this segment. The scenario for supply of natural gas in India has changed significantly with the advent of volumes from Reliance Industries operated D6 fields in the Krishna Godavari basin offshore Indian east coast. About 8 mmscmd of gas commenced flowing in April 2009, which increased up to 60 mm sc md by December 2009. The Ministry of Petroleum and Natural Gas (MoPNG), Government of India, under the aegis of the EGOM (Empowered Group of Ministers) allocates gas from the D6 fields as per the Gas Utilisation Policy. Under this policy, preferential allotment has been made to units in the core sectors of power and fertilizer. While some gas volumes of D6 gas was allocated to certain city gas distribution companies for supply to residential households and transport (CNG) sectors, no gas allocation was made during the year to your Company. The additional supply of KG D6 gas raised the supply level of indigenous gas in the Indian markets to about 133 mm sc md by December 2009. The consumption of Regasified Liquified Natural Gas (RLNG) in Indian markets also increased through the year, primarily due to the availability of spot cargoes. The Company was successful in procuring RLNG at market determined prices on shor term basis to meet the current gas requirements of its customers from March 2009 onwards. Gas availability from some indigenous sources in the western offshore and Cambay basin fields has also increased marginally, thereby positively impacting India's gas demand-supply scenario in the near term. Concerns remain, however, regarding the demand-supply gap in the long term. The demand for natural gas remained robust, signifying a clear market preference for natural gas as a safer, cleaner and economical source of energy. While the large consumers of natural gas in the country continued to be the power and fertilizer unit, the demand from City Gas Distribution (CGD) customers viz smaller industrial units, natural gas vehicles, households and commercial establishments, continued to grow. Moreover, the sectoral gas demand has remained largely consistent over the years, with almost 45% being consumed by power sector followed by fertilizers with a share of 24%. The sector-wise gas demand projections as in XI - XII plan are shown below. The Company maintained its status as the largest CGD company in India by volumes, even though it faced a constraint in adding long term sources of gas supply to its portfolio. While new entrants are expected in the CGD space in India, issues relating to authorizations still need to be clarified.The Delhi High Court has recently held that the Petroleum and Natural Gas Regulatory Act does not empower the Petroleum and Natural Gas Regulatory Board (PNGRB) to authorize the operation of CGD companies. This has held up the applications for authorization which are pending with the PNGRB
 

· Opportunities and Challenges

 
The developments described above open material opportunities for the Company while also posing certain challenges. The flow of additional volumes of gas by way of RLNG and by way of indigenous gas mainly from the East Coast of the country, offer several options for gas sourcing in the future, which will lead to fulfilling the significant demand in the operating areas of the Company. The growth of industrialization continues to be robust in the Company's areas of operation. While this was affected temporarily during the economic downturn, the industrial units in South Gujarat are again showing a strong appetite for gas use. Growth of urbanization in Surat and Ankleshwar has also been rapid and continues unabated. These factors create opportunities 
for growing the market for natural gas for industrial applications, household usage and for use as CNG in vehicles. The challenges that your Company expects to face relate mainly to ensuring safe operations in line with the Company's objectives, competition in certain market segments, retention of critical talent and resourcing and the growth of its pipeline network. Your Company has strong processes in place to address these challenges.
 
· Operations and Market Performance
 
The Company continued to face constraints on gas availability, which was more pronounced in the early part of the year. While significant volumes of RLNG were sourced from March 2009 onwards, D6 gas was not allocated to the Company. RLNG was purchased on a short term basis at market determined prices to meet all the demand from existing customers. Gas sales volumes therefore did not grow over the previous year, but the Company plans to grow its customer base by procuring long term gas supply from both indigenous and RLNG sources at market determined prices. The average cost of gas for the Company's portfolio increased over the previous year, primarily due to forex which made it necessary to align the gas sales prices in all the market segments. Margins were therefore optimized. About 28,000 new household customers were connected on natural gas during the year, taking the total number of domestic customers of the Company to over 270,000. More than 100,000 vehicles now ply in the Company's operating areas on natural gas. The company has around 2,80,000 customers, including industrial units. Sales volumes grew by 8% in the Industrial segment and 18% in the CNG segment. The Company continues to invest in pipeline network, CNG stations and other infrastructure. 35 km of steel pipelines and 392 km of PE pipelines were laid during the year. Total capital investments were Rs 1553 million. Operating costs of the Company were optimized through stringent measures adopted in all the areas of operation. The Company endeavours to build a strong culture of cost optimization which ensures that the maximum value is derived for all expenditure The Company could take the advantage of negotiating purchase contracts for materials at very competitive rates for its capital projects as well as for certain recurring activities. The Co-generation business segment operated with its existing contracts. Growth outlook in this segment continues to remain conservative due to potential credit risks. The Company invested its surplus funds under an investment strategy designed to ensure complete safety of the funds and to ensure the best possible returns within the given safety parameters. The consolidated income increase from Rs.13424 million to Rs.14463 million. Gas sales volume was 1035 mmscm, compared to 1089 mmscm in the previous year, due to declining availability of PMT gas. The Profit Before Tax increased from Rs 2306.520 million to Rs 2573.550 million mainly due to market optimization. The profit after tax increased from Rs. 1588.120 million to Rs.1751.250 million.
 
· Future outlook
 
The Company's application for authorisation is pending with the PNGRB. This is expected to be progressed pending resolution of the PNGRB's authorization powers. The Company has in the meantime obtained the permission from the regulator to continue capital works in its key areas of operation as well as for the expansion areas planned in immediate future. Sourcing additional sources of long term gas is critical for the growth of the business. RLNG as well as indigenous sources of gas are being explored for this purpose. The Company endeavours to grow its retail markets to take full advantage of the growth in industrialization and urbanization in its areas. The management is focused in ensuring that the adequate systems, processes, resources and infrastructure are available and are scalable to enable the growth of the Company.The Company considers Health, Safety, Security and Environment (HSSE) to be of prime importance in all its activities. Continuous engagement with the staff, contractors, customers and other stakeholders is designed to create and sustain a strong culture where HSSE is perceived to be of highest importance in any activity of the Company. Systems and processes are laid and geared up to enable this culture. The Company endeavours to ensure that all its employees and contractors work in an environment which is totally safe and are able to return home safely after every day's work. The Company also believes that ensuring road safety is critical for its operations and has made significant progress to develop procedures, enhance awareness and positively influence behaviour of all concerned. The Company works very closely with its business partners in the CNG business segment 
to ensure safe operations. The Company believes that partnering with its contractors is vital to its growth. A comprehensive contracting strategy has been developed with a high level of engagement with employees, contractors and experts to address this issue.
 
· SUBSIDIARIES
 
· Gujaratgas Trading Company Limited (GTCL)
 
Gujaratgas Trading Company Limited (GTCL), a whollyowned subsidiary of the Company is engaged in the business of selling natural gas. During the year under review, GTCL achieved sales of Rs14176.390 mn as against Rs. 12964.670 mn during the previous year. Volumes during the year were lower compared to the previous year on account of reduction in gas supplies from one of its suppliers. Total income for the year was Rs. 14429.590 mn including other income of Rs253.200 mn as against total income of Rs. 13357.710 mn including other income of Rs. 393.040 mn in the previous year. Profit before tax (PBT) was Rs. 2573.550 mn during the year as against Rs. 2306.520 mn in the previous year.The accounts for GTCL are a part of this Annual Report.
 
· Gujarat Gas Financial Services Limited (GFSL)
 
Gujarat Gas Financial Services Limited (GFSL), another subsidiary of theCompany, carried out the job of installing gas connections for domestic and commercial customers of the Company. While GFSL has the status of a certified Non Banking Financial Company, it has stopped providing lease finance since April 2007. As it no longer meets the norms prescribed by the Reserve Bank of India (RBI) for Non-Banking Financial Companies, the Company has applied to the RBI for surrender of the RBI Certificate of Registration as NBFC.During the year under review, the income was Rs. 14429.590 mn. as compared to Rs.13357.710 mn. in the year 2008 and the profit after tax was Rs. 1751.250 mn. as compared to Rs.1588.120 mn. for the previous year.
The accounts of GFSL are a part of this Annual Report.
 
· FINANCE
 
The Company continued to have a robust cash flow. The Company has also made adequate provisions for all contingencies, bad debts and diminution in value of investments, as applicable. During the year under review, the Company has not invited any fixed deposits within the meaning of Section 58A of the Companies Act, 1956.
 
· ISSUE OF BONUS EQUITY SHARES
 
64,125,000 bonus equity shares of Rs 2 each were allotted on 22 September 2009 in the ratio of one bonus share for every fully paid up equity shareheld. The total number of fully paid up equity shares of the Company was thereby increased to 128,250,000.
 
· Gujarat Gas Company Limited Employee Stock Option Plan 2008 ('the ESOP 
2008')
 
The details of the Options granted up to 31st December, 2009 under the Gujarat Gas Company Limited Employee Stock Option Plan 2008 ('the ESOP 2008')and other disclosures as required under Clause 12 of the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, are set out in the Annexure - 3 to this Report. The Company's Auditors, Price Waterhouse, have certified to the effect that the ESOP 2008 has been implemented in accordance with the Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme)Guidelines,1999 and the resolutions passed by the members in this regard. Under the ESOP 2008, 1,69,500 Options were granted during the year, which provides the benefit or right but not the obligation for exercising at a future date,equivalent number of equity shares each of the face value of Rs.2/- each of Gujarat Gas Company Limited against the Options that have vested under the ESOP 2008. The ESOP 2008 provides for graded vesting of Options granted over a period of 4 years from the date of grant. The Options are to be exercised within a maximum period of 2 years from the date of vesting. Within the exercise period, the Option holder shall have the option to either purchase the shares from the trust at the exercise price or to give a mandate of sale to the trust in accordance with the terms and conditions of the ESOP 2008. The Gujarat Gas Company Limited Employee Welfare Stock Option Trust ('the Trust') is implementing and administering the ESOP 2008. The Director - Finance and Director - Human Resource are the trustees of the Trust. The 
Trustees are authorized to execute the purchase and sale of shares of the Company, on behalf of the Option holders, in accordance with the ESOP 2008. The Trust has purchased from the secondary market, 1526644 equity shares of Rs. 2/- each, as of 31 December 2009 and the same are being held jointly by the trustees of the Trust. The Company has not passed any resolution for buyback of shares.
 

FIXED ASSETS:

Tangible assets:

• Land
• Buildings
• Plant and Machinery
• Furniture, Fixtures and Fittings
• Vehicles

Assets Given on Finance Lease:

• Plant and Machinery

Assets given on Operating Lease:

• Plant and Machinery

Intangible Assets:

• Software / License
• Right of use of Land

NOTES:

1. Land includes Leasehold Land Rs. 0.180 millions(Previous year Rs.0.180 million)
2. Assets given on Operating Lease includes Natural gas fired cogeneration units at its net realizable value of Rs.28.54 million (Previous year Rs.38.000 millions) for which agreement to lease has been terminated.
3. Plant and Machinery includes certain assets at its net realizable value of Rs.1.92 million (Previous year Nil) which are held for disposal.

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] 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	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	6
--RESERVES	1~10	7
--CREDIT LINES	1~10	6
--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	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		61

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.