MIRA INFORM REPORT

Report Date :

20.07.2011

IDENTIFICATION DETAILS

Name :	MALWA INDUSTRIES LIMITED
Registered Office :	230 Industrial Area A, Ludhiana-141003, Punjab
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	30.03.1993
Com. Reg. No.:	16-013187
Capital Investment / Paid-up Capital :	Rs.402.413 Millions
CIN No.: [Company Identification No.]	U17219PB1993PLC013187
TAN No.: [Tax Deduction & Collection Account No.]	JLDM02516D
PAN No.: [Permanent Account No.]	AABCM1287D
Legal Form :	A closely held Public Limited Liability Company.
Line of Business :	Manufacturer and Exporter of Sewing Accessories and Knitwear Knitted Fabrics.
No. of Employees :	2000 Approximately

RATING & COMMENTS

MIRA’s Rating :

B (32)

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

Maximum Credit Limit :	USD 2400000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is a well established company having moderate track. Profitability of the company is under pressure. 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 cautions.

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 PARTED BY

Name :	Mr. C K Varsheny
Designation :	Account Manager
Contact No.:	91-9915700341
Date :	19.07.2011

LOCATIONS

Registered Office/ Factory :	230 Industrial Area A, Ludhiana-141003, Punjab, India
Tel. No.:	91-161-2229146
Mobile No. :	91-9915700341 (Mr. C K Varsheny)
Fax No.:	91-161-2223603
E-Mail :	mktg.denim@malwagroup.com corporate@malwagroup.com ckvarshney@malwagroup.com
Website :	http://www.malwagroup.com
Location :	Owned
Factory :	Kohara Machiwara Road, Ludhiana, Punjab, India
Area :	70 Acres
Location :	Owned

DIRECTORS

As on 30.09.2010

Name :	Mr. Jangi Lal Oswal
Designation :	Non-Executive Chairman/ Director
Address :	B-83, The Mall, Ludhiana-141001, Punjab, India
Date of Birth/Age :	18.07.1951
Date of Appointment :	30.11.1996
Name :	Mr. Rishi Oswal
Designation :	Managing Director
Address :	B-83, The Mall, Ludhiana-141001, Punjab, India
Date of Birth/Age :	26.11.1972
Date of Appointment :	30.11.1996
Name :	Mr. Rahul Oswal
Designation :	Executive Director
Address :	B-83, The Mall, Ludhiana-141001, Punjab, India
Date of Birth/Age :	07.01.1974
Date of Appointment :	30.11.1996
Name :	Mr. Rajiv Dewan
Designation :	Non-Executive Director
Address :	96-F, Rishi Nagar, Ludhiana-141001, Punjab, India
Date of Birth/Age :	30.11.1961
Date of Appointment :	26.07.2002
Name :	Mr. R C Singal
Designation :	Non-Executive Director
Address :	B-23/750, Street No. 5, Janakpuri, Ludhiana-141003, Punjab, India
Date of Birth/Age :	27.01.1954
Date of Appointment :	30.06.1998
Name :	Mr. Hemant Kalia
Designation :	Non-Executive Director
Address :	154-G, BRS Nagar, Ludhiana-141001, Punjab, India
Date of Birth/Age :	17.12.1954
Date of Appointment :	30.06.1998
Name :	Dr. P R Roy
Designation :	Non-Executive Director
Address :	36, Amaltas Bungalows, Vastra Pur Road, Ahmedabad-380054, Gujarat, India
Date of Birth/Age :	11.07.1941
Date of Appointment :	27.04.2006
Name :	Mr. Kamal Kant Upadhyay
Designation :	Non-Executive Director
Address :	Flat No. 1502 B, IDBI Officers Flats, Sector 38-B, Chandigarh-160034, Chandigarh, India
Date of Birth/Age :	23.05.1966
Date of Appointment :	08.09.2008

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2010

Names of Shareholders	No. of Shares
Malwa Cotton SPG Mills Limited, India	9630700
Neelam Growth Fund Private Limited, India	9323000
Jangi Growth Fund Private Limited, India	9302600
Rishi Growth Fund Private Limited, India	9390000
S.A. Grow	185400
Aeneas Evolution Portfolio Limited	1417000
Minivet Limited	750000
Prime Holding Private Limited, India	150000
Divoja Investment And Finance Private Limited, India	47000
Vidya Sagar Oswal	45000
Jasbir Singh	100
Ram Kumar	100
Vinod Gupta	200
Mahesh Malwa Cotton SPG Mills Limited, India	100
Rajesh Kumar Verma	100
Total	40241300

As on 30.09.2010

Equity Share Breakup	Percentage of Holding
Category
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	5.39
Bodies corporate	94.50
Directors or relatives of directors	0.11
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of
Sewing Accessories and Knitwear Knitted Fabrics.

Products :

Product Description	Item Code
Denim Fabric	52094200
Jeans Wear	62034200 / 62046200
Cotton Yarn	52051110

Brand Names :

Malwa

Exports :

Products :

Denim Fabrics

Countries :

· Turkey

· Egypt

· Bangladesh

· Dubai

Imports :

Products :

· Accessories

· Chemicals

Countries :

· China

· Hong Kong

· Italy

· Germany

Terms :

Selling :

L/C, Cash and Credit

Purchasing :

L/C, Cash and Credit – T/T

PRODUCTION STATUS (AS ON 31.03.2010)

Particulars	Unit	Installed Capacity
Rotors	Nos.	1840
Spindles	Nos.	7596
Looms	Nos.	95
Garmenting	Pcs.	4.5 mn pcs p.a. (On 2 shifts basis)

Particulars	Unit	Actual Production
Yarn*	Lacs Kgs	67.13
Denim Fabric#	Lacs Mtrs	143.22
Garments	Lacs Pcs.	12.90
Electricity (*)	Lacs Units	335.25

Note:

• * Includes 65.77 Lacs Kgs. Yarn transferred to weaving unit for captive consumption.
• # Include 13.67 Lacs Meters Fabric transferred to Garment Division for captive consumption.
• (*) Includes 64 Lacs units being self consumption of CPP and 271 Lacs units internal transfer to Fabric/Garments units.

GENERAL INFORMATION

Customers :

· Wholesalers

· Retailers

No. of Employees :

2000 Approximately

Bankers :

Canara Bank, Bharat Nagar Chowk Branch, Ludhiana-141001, Punjab, India

Facilities :

Secured Loan	As on 31.03.2010 (Rs. in Million)	As on 31.03.2009 (Rs. in Million)
Loans and advances from Banks
Term Loans	2041.600	1652.000
Working Capital	637.300	996.600
Vehicle Term Loan	3.800	6.600
Interest accrued and due	14.800	56.900
Total	2697.500	2712.100

Note:

1. Term Loan from Banks are secured by way of equitable mortgaged created/ to be created on all immovable assets of the Company, both present and future and hypothecation of all movable assets including movable machinery together with equipments and accessories and other movables both present and future (save and except book debts) on pari-passu basis, subject to charges created or to be created in favour of the bankers for securing working capital limits. Term Loans from banks amounting to Rs. 1816.000 Millions (PY 1495.700 Millions) are guaranteed by three promoter director(s) of the company.

2. Working Capital Borrowings from Banks are secured by hypothecation of raw materials, work in process, stores and spares, finished goods, goods in transit and book debts and are also secured by second charge created/ to be created on the immovable and movable properties of the Company and guaranteed by three promoter directors of the Company.

3. Vehicle Term Loans from Banks are secured by Hypothecation of Vehicles and guaranteed by one director of the company.

4. Repayment out of the above within one year is Rs.321.700 Millions (Previous year Rs.83.300 Millions )

Banking Relations :	--
Auditors :
Name :	S.C. Vasudeva and Company Chartered Accountant
Address :	B-41, Panchseel Enclave, New Delhi-110017, India
Tel. No.:	91-161-2774527
Mobile No.:	91-9815420555
Fax No.:	91-161-2771618
E-Mail :	ludhiana@scvasudeva.com
Website:	www.scvasudeva.com
Associates/Subsidiaries :	· Sunycroft Holding Limited · Third Dimension Apparel LLC · Emmetre Tintolavanderie SRL · Veneto Jeans SRL · Vastram Worldwide Limited

CAPITAL STRUCTURE

As on 30.09.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
74000000	Equity Shares	Rs.10/- each	Rs.740.000 Millions
1000000	Preferences Shares	Rs.10/- each	Rs.10.000 Millions
	Total		Rs.750.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
40241300	Equity Shares	Rs.10/- each	Rs.402.413 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		402.413	402.413	402.413
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		208.695	383.263	749.193
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		611.108	785.676	1151.606
LOAN FUNDS
1] Secured Loans		2697.488	2712.147	2477.976
2] Unsecured Loans		52.500	0.000	0.000
TOTAL BORROWING		2749.988	2712.147	2477.976
DEFERRED TAX LIABILITIES		194.534	205.831	228.491
TOTAL		3555.630	3703.654	3858.073
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1492.293	1641.043	1787.111
Capital work-in-progress		17.607	2.960	2.960
INVESTMENT		346.547	203.085	203.085
DEFERREX TAX ASSETS		0.000	2.832	2.832
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	877.624	876.877	876.253
	Sundry Debtors	815.786	791.847	808.540
	Cash & Bank Balances	11.007	6.935	31.809
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	161.833	346.477	296.522
Total Current Assets		1866.250	2022.136	2013.124
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	134.300	102.100
	Other Current Liabilities	32.767	66.302	115.883
	Provisions	0.000	0.000	35.156
Total Current Liabilities		167.067	168.402	151.039
Net Current Assets		1699.183	1853.734	1862.085
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		3555.630	3703.654	3858.073

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009		31.03.2008
	SALES
		Income	2083.000	1824.400		1965.200
		Other Income	77.000	(44.500)		117.500
		TOTAL (A)	2160.000	1779.900		2082.700
Less	EXPENSES
		Raw Material Consumed	1014.800	958.200		725.800
		Manufacturing Expenses	531.500	523.100		533.000
		Personnel Expenses	162.500	157.400		195.300
		Administrative and Others Charges	82.800	69.800		103.200
		Selling and Distribution Expenses	68.300	72.500		94.000
		Increase / Decrease in WIP and Finished Goods	24.100	(15.000)		(44.700)
		TOTAL (B)	1884.000	1766.000		1606.600
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		276.000	13.900		476.100
Less	FINANCIAL EXPENSES (D)		289.300	247.400		161.400
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(133.000)	(233.500)		314.700
Less/ Add	DEPRECIATION/ AMORTISATION (F)		153.900	153.200		174.100
	PROFIT BEFORE TAX (E-F) (G)		(167.200)	(386.700)		140.600
Less	TAX (H)		7.400	(20.900)		44.200
	PROFIT AFTER TAX (G-H) (I)		(174.600)	(365.800)		96.400
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		357.000	722.900		626.500
	BALANCE CARRIED TO THE B/S		182.400	357.100		722.900
	EARNINGS IN FOREIGN CURRENCY		686.500	547.100		759.200
	IMPORTS
		Raw Materials	40.123	3.700		7.900
		Dyes and Chemical	29.953	37.300		31.900
		Components and Spares Parts	57.450	54.700		70.300
		Capital Goods	12.785	0.000		44.000
	TOTAL IMPORTS		140.311	95.700		154.100
	Earnings Per Share (Rs.)		(3.95)	(9.09)		2.40
Particulars					31.03.2011
Sales Turnover (Approximately)					2700.000

The above information has been parted by Mr. C K Varshney

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(8.08)	(20.55)	4.63
Net Profit Margin (PBT/Sales)	(%)	(8.03)	(21.20)	7.15
Return on Total Assets (PBT/Total Assets}	(%)	(4.97)	(10.56)	3.70
Return on Investment (ROI) (PBT/Networth)		(0.27)	(0.49)	0.12
Debt Equity Ratio (Total Liability/Networth)		4.77	3.67	2.28
Current Ratio (Current Asset/Current Liability)		11.17	12.00	13.33

LOCAL AGENCY FURTHER INFORMATION

TRADE REFERENCES

· Vardhaman Industries Limited, Ludhiana

· Nahar Industries Limited, Ludhiana

OPERATIONS

The Company achieved a gross turnover of Rs. 2160.000 Millions registering a growth of 21% over the previous year. The production of Denim Fabric achieved was 143.22 Lac meters during the period over the production levels of 123.54 Lacs meters during the previous year. The production was higher by 15.93 % as compare to last year. The net sales increased in 2010 by 13% for the following:

a) Sales in Garment division increased by 31 % due to tie up from the leading brands.

b) Export Sales in Garment is increased by 31%.

During the year the Company achieved a turnover of Rs. 467.200 Millions in garment unit as compared to Rs. 357.000 Millions during the pervious year. During the year Captive Power Plant (CPP) of 6 MW capacity generated 335.25 lacs units of power against 364.21 lacs unit last year. During the year under review, the Company has earned a Profit before Financial Expenses and Depreciation, written offs and Taxes (PBDIT) for Rs. 276.600 Millions. The Company’s Net Loss after exceptional items and taxes stood at Rs. 174.500 Millions during the year.

The company’s improved its performance during the year which has been adversely affected on account of global meltdown leading to lesser utilization of capacities and various other unfavorable external factors last to last year. Though there was improved demand in domestic market however the denim export market remained sluggish due to continuous slowdown of Europe and USA. The increased cost of cotton could not be passed on to the customer fully. The improved performance was mainly on account of improved performance of garment unit in capacity utilization and induction of new value added customers like M and S, UK .The profitability continued to be impacted by high cotton cost, fluctuating currency, high fuel cost. Captive power plant (CPP) is supplying quality power to all of manufacturing facilities of the Company. But due to high prices of Husk during the year, the generation cost of power remained higher than State Grid Power. Further there is overall increase in other cost factors during the last year

Business Augmentation

Denim Fabric business:

The Company’s R and D Department continue to develop various new value added varieties of Denim Fabrics. Further, the Company continues its thrust on value added products, increase its sale to Brands, optimum utilization of resources and cost minimization.

Garment business:

The Company has successfully serviced various International European Brands during the year including Mark and Spencer, Topshop, Perry Ellis etc. After partially recovery from the global slowdown the Company is shifting towards niche brands to increase the margins and within the brands move to brands next in ladder thus increase the realisation.

Future Plans

The company continues to focus on increase sales to Brands in Fabric in domestic and exports by presenting and developing differentiated products for them. In garments the company continues to focus on moving up in the value chain of the Brands the company is catering and to induct brand in higher value chain. The company has been successful in inducting Mark and Spencer and Topshop, UK as new customer during the year. Further the company is closing working with Levis for its induction in its customer kitty which will be a big boost to the company.

Future Outlook

The company has started turnaround from the 3^rd quarter of this year but the impact of this will be visible in the next financial year. The domestic demand for the denim is growing and the company is focusing on new product developments in this segment. Exports turnover is expected to grow significantly in the next year due to the efforts made in this year to increase exports to derisk overdependence on domestic market and for long term better margin business in Brand nominated segment. However, the cotton and yarn prices have shown an increasing trend in the first quarter of year 2010-11. Increase is still more in the 2^nd qtr on account of reported damage of cotton crops in Pakistan due to floods. This has impacted the company adversely as company could not cover cotton for significant period and also could not pass on the increased cost immediately to the customers. The company is taking suitable steps to mitigate the effects of above by passing the increased cost to the customers however there will be time lag effect due to period commitment in exports.

The company is leveraging its relationship with large apparel buyers globally to move itself up the value chain creating differentiated fabrics and supply fashion forward fabrics to leading apparel brands across the globe. The Company is now supplying directly to the international brands and its fabric has been nominated by some of them and the Company is focusing on (a) moving up in value chain of the products by offering differentiated denim products with specialized finishes and (b) moving up in value chain from distributor segment to direct brands sale.

Overseas Ventures

The Company has a defined vision to become a leading international Denim player to be known equally for its niche products and as valuable partner for renowned brands facilitated through its multi-location and vertical integration. The Company’s foreign acquisitions in Jordon and Italy were in that direction to provide integrated garment package to various brands. During the year the company to leverage its relationship with brands/customers have floated marketing arm as Vastram Worldwide Limited, BVI to source and market products other than produced by Malwa to or in Bangladesh. Overseas Ventures in Jordan and Italy both were adversely impacted by global meltdown last year. However both the units have now increased its capacity utilization in the 1^st half of the current year of 2010 though margin are still under pressure.

Bankers Charges Report as per Registry

This form is for	Modification of charge
Charge identification number of the modified	90173496
Corporate identity number of the company	U17219PB1993PLC013187
Name of the company	MALWA INDUSTRIES LTD
Address of the registered office or of the principal place of business in India of the company	230 Industrial Area A, Ludhiana-141003, Punjab, India
Type of charge	Book Debts Movable Property (not being pledge)
Particular of charge holder	Canara Bank, Bharat Nagar Chowk Branch, Ludhiana-141001, Punjab, India
Email	managercb2107@canarabank.com
Nature of description of the instrument creating or modifying the charge	Supplemental Joint Deed of Hypothecation dated 19th APRIL 2011 executed between Malwa Industries Limited and Canara Bank acting as the Lead bank of the Consortium for itself and other consortium members consisting of State Bank of India, State Bank of Patiala ,Standard Chartered Bank and IDBI Bank Limited
Date of instrument Creating the charge	19.04.2011
Amount secured by the charge	Rs.806.500 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest Different rate of interest of banks under consortium for the facilities granted by bank as provided in the documents Supplemental Joint Deed of Hypothecation. Terms of Repayment Being working capital facilities, these are payable within one year. Margin Different rate of margin on banks under consortium for the facilities granted by them ranging from 10% to 25%. Extent and Operation of the charge 100%
Short particulars of the property charged	I) Primary security -1st charge on the current assets of the Company on pari passu basis amongst consortium members on working capital and Corporate loans II) 2nd charge on the current assets of the Company on pari passu basis amongst consortium members on FITL III) 2nd charge on the Fixed Assets incl Plant and Machinery (Present and Future) of the Company on pari passu basis amongst consortium members on FITL IV) Collateral -2nd charge on the fixed assets (Present and Future) of the company on pari- passu basis for working capital, corporate loans and FITL V) 2nd charge on the Fixed Assets (Present and Future) of the Company on pari passu basis amongst consortium members on FITL
Date of latest modification prior to the present modification	30.06.2009
Particulars of the present modification	Working Capital Reduced To Rs. 806.500 Millions (Rs.725.000 Millions As Fund based And Rs.81.500 Millions As Non Fund based) From Rs.926.500 Millions ,Which Was Last Modified On 30/05/2008.

FIXED ASSETS:

• Freehold Land
• Building
• Plant and Machinery
• Furniture and Fixtures
• Office Equipments
• Computer
• Vehicles
• Patents
• ERP

AS PER WEBSITE DETAILS:

PROFILE:

MALWA INDUSTRIES LIMITED (MIL) - Denim arm of the Malwa Group.

In 1997, Mr. Rishi Oswal, the scion of the Oswal family and the Managing Director of subject started the denim manufacturing facility in response to the increased market demand for Jeans in the 1990's. Commercial operations started in FY97-98 and since then the company has been growing at a fast pace. Subject premier denim manufacturing plant is located at Ludhiana in the Punjab region, the heart of the Indian cotton producing belt. Its operations span India (where it is headquartered), Jordan and Italy. Through these operations, its products are exported to over 40countries worldwide where these are sold under some of the biggest denim brands and designer labels that come to mind. With Quality certifications such as the ISO9001, ISO14001, Oekotex and Woolmark, the name subject has, today, become synonymous with superlative quality and product excellence. In recognition of its excellent track record in Exports, it has been honoured with Export Performance Awards by the Govt. of India in recent years.

Equipped with the latest machines imported from Switzerland , Germany , Belgium , Italy , Japan and the US , the facility boasts of some of the best equipment the industry has to offer. With this state-of-the-art technology, MIL achieves a current production capacity of 20 million meters of denim fabrics and 4.50 million pairs of Jeans annually.

The Jeans manufacturing facility at Jordan (Third Dimension Apparel LLC or more popularly Petra) boasts of an annual capacity of 4.0million pieces. It has the most advanced CAD system which helps in optimizing fabric consumption that minimizes cost, making the product affordable.

The Italian venture (Emmetre) is a fully automated state-of-the-art facility for Garment Dyeing and Finishing. It caters to the top end of the market and has a client base comprising of leading designer labels and fashion brands. The facility brings to subject fold, prized knowledge of emerging fashion trends in denim making MIL a trendsetter by virtue of this knowledge. This facility also adds 2.5million pieces annually in capacities to subject denim stable.

Subject today stands tall and proud of its stature as one amongst a handful of denim suppliers, globally, to possess capabilities in offering Total Solutions in Denims and that too from a single point interface.

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.44.59
UK Pound	1	Rs.71.62
Euro	1	Rs.62.78

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		32

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	-

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