MIRA INFORM REPORT

Report Date :

22.06.2011

IDENTIFICATION DETAILS

Name :	RANE (MADRAS) LIMITED
Registered Office :	“Maithri”, No.132, Cathedral Road, Chennai – 600 086, Tamilnadu
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	31.03.2004
Com. Reg. No.:	18-52856
Capital Investment / Paid-up Capital :	Rs.101.641 millions
CIN No.: [Company Identification No.]	L65993TN2004PLC052856
TAN No.: [Tax Deduction & Collection Account No.]	CHER07663F
PAN No.: [Permanent Account No.]	AACCR9772M
Legal Form :	A public limited liability company. The company’s shares are listed on the Stock Exchange.
Line of Business :	The Company’s principal activity to manufacturer components for transportation industry.
No. of Employees :	927 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (44)

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

Maximum Credit Limit :	USD 3298000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct. The company can be considered good for normal 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

LOCATIONS

Registered Office :	“Maithri”, No.132, Cathedral Road, Chennai – 600 086, Tamilnadu, India
Tel. No.:	91-44-28112472
Fax No.:	91-44-28112449
E-Mail :	investorservices@rane.co.in
Website :	http://www.rane.co.in
Factory 1 :	‘Ganapathi Buildings’, 154 (Old No. 61) Velachery Road, Chennai - 600 042, Tamilnadu, India
Tel. No.:	91-44-22452344
Fax No.:	91-44-22451435, 22450443
Factory 2 :	79/ 84, Hootgally Industrial area, Mysore – 570 018, Karnataka, India
Factory 3 :	77, Thirubuvanai Main Road, Thiruvanai Village, Punducherry – 605 107, India
Factory 4 :	Ambakkam, Varanavasi Village, Varanavasi Post, Kancheepuram – 631 604, Tamilnadu, India
Factory 5 :	Plot No.27, Sector 11, Integral Industrial Estate, Pant Nagar – 263 153, Uttarakhand, India

DIRECTORS

As on 31.03.2010

Name :	Mr. L. Ganesh
Designation :	Chairman
Name :	Mr. L. Lakshman
Designation :	Director
Date of Birth/Age :	17.07.1946
Qualification :	B.E., Executive MBA from London Business School
Experience :	Mr. Lakshman has been spearheading the business of different companies in Rane Group and has more than 39 years of industrial experience.
Date of Appointment :	31.03.2004
Other Directorship :	Rane Brake Lining Limited Rane Engine Valve Limited Rane TRW Steering Systems Limited Rane NSK Steering Systems Limited Rane Investments Limited Rane Holdings Limited Kar Mobiles Limited JMA Rane Marketing Limited Force Motors Limited DCM Engineering Limited
Name :	Mr. P.S. Kumar
Designation :	Director
Name :	Mr. V. Narayanan
Designation :	Director
Name :	Mr. Harish Lakshman
Designation :	Director
Name :	Mr. R. Natarajan
Designation :	Director
Date of Birth/Age :	09.01.1941
Qualification :	Doctorate in Philosophy, Masters degree in Engineering and Science
Experience :	Over 37 years of experience in the field of science and technology
Date of Appointment :	21.07.2006
Date of Ceasing :	22.03.2010
Other Directorship :	I.P. Rings Limited Tata Elxsi Limited
Name :	Mr. M. Lakshminarayan
Designation :	Director
Date of Birth/Age :	07.09.1946
Qualification :	M. Tech.
Experience :	Over 35 years of rich experience in automotive industry.
Date of Appointment :	21.07.2008
Other Directorship :	Pricol Limited
Name :	Mr. T. Mukherjee
Designation :	Director
Audit Committee :	Mr. V. Narayanan – Chairman Mr. P.S. Kumar Mr. L. Lakshman Mr. M. Lakshminarayan
Investor’s Service Committee :	Mr. L. Lakshman – Chairman Mr. Harish Lakshman Mr. P.S. Kumar

KEY EXECUTIVES

Name :	Mr. S. Parthasarathy
Designation :	President
Name :	Mr. P. Krishnamoorthy
Designation :	General Manager – Finance

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2011

Category of Shareholder	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	78,975	0.78
Bodies Corporate	5,446,675	53.59
Sub Total	5,525,650	54.36
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	73,060	0.72
Sub Total	73,060	0.72
Total shareholding of Promoter and Promoter Group (A)	5,598,710	55.08
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	463,289	4.56
Financial Institutions / Banks	400	-
Sub Total	463,689	4.56
(2) Non-Institutions
Bodies Corporate	435,871	4.29
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	2,411,536	23.73
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	1,040,486	10.24
Any Others (Specify)	213,853	2.10
Clearing Members	25,231	0.25
Any Other	188,622	1.86
Sub Total	4,101,746	40.36
Total Public shareholding (B)	4,565,435	44.92
Total (A)+(B)	10,164,145	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	10,164,145	-

BUSINESS DETAILS

Line of Business :

The Company’s principal activity to manufacturer components for transportation industry.

Products :

Item Code No. (ITC Code)	8708 99 00
Product Description	Steering and Suspension Linkages
Item Code No. (ITC Code)	8708 94 00
Product Description	Steering Gears

PRODUCTION STATUS (AS ON 31.03.2010)

Particulars	Unit	Actual Production
Steering and Suspension Linkage Products	Nos.	8499686
Steering Gear Products	Nos.	1329039

GENERAL INFORMATION

No. of Employees :

927 (Approximately)

Bankers :

• Canara Bank, Chennai – 600 002, Tamilnadu, India
• State Bank of India, Chennai – 600 001, Tamilnadu, India
• HDFC Bank Limited, Chennai – 600 002, Tamilnadu, India
• IDBI Bank Limited, Chennai – 600 015, Tamilnadu, India

Facilities :

Secured Loans	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
From Banks
Term Loans	132.322	132.013
Cash credit and Packing Credit	15.384	336.462
Short Term Loan from a Bank	101.200	100.000
Interest accrued and due on Term Loans	0.000	1.062
Total	248.906	569.537

· Term loans from Banks are secured on a pan passu basis by a first charge created on the Company’s immovable properties both present and future and are also secured by hypothecation of the Company’s movable properties both present and future, subject to prior charge on the book debts and inventories in favour of the bankers for working capital facilities.

· Cash credit, packing credit facilities arid short term loans are secured on a pan passu basis by a first charge by way of hypothecation of inventories and book debts and are also secured by a second charge on all immovable properties and movable fixed assets of the Company both present and future.

Unsecured Loans	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
Fixed Deposits [Includes Rs.1.700 millions (previous year Rs.1.000 million) from Directors]	121.030	24.310
Loan from a Bank	17.045	0.000
Interest free Sales Tax Loan	0.000	2.471
Total	138.075	26.781

· Fixed Deposits maturing within a period of one year amount to Rs.18.390 millions (previous year - Rs.8.295 millions).

· Amount repayable in respect of Interest free sales tax loan within one year is Rs. Nil thousands (previous year - Rs.2.471 millions).

Banking Relations :	--
Auditors :
Name :	Price Waterhouse and Company Chartered Accountants
Address :	Chennai – 600 006
Holding Company :	Rane Holdings Limited
Fellow Subsidiaries :	Rane Engine Valve Limited Rane Diecast Limited Rane Brake Lining Limited

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
11000000	Equity Shares	Rs.10/- each	Rs.110.000 millions
4500000	13.5% Cumulative Redeemable Preference Shares	Rs.10/- each	Rs.45.000 millions
	Total		Rs.155.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
10164145	Equity Shares	Rs.10/- each	Rs.101.641 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		101.641	101.641	101.641
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		722.858	609.231	631.265
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		824.499	710.872	732.906
LOAN FUNDS
1] Secured Loans		248.906	569.537	330.590
2] Unsecured Loans		138.075	26.781	34.232
TOTAL BORROWING		386.981	596.318	364.822
DEFERRED TAX LIABILITIES		44.608	43.020	42.725
TOTAL		1256.088	1350.210	1140.453
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		664.157	704.096	648.226
Capital work-in-progress		64.891	13.603	16.129
INVESTMENT		0.050	0.050	0.050
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	450.264	506.154	446.838
	Sundry Debtors	617.447	471.950	501.018
	Cash & Bank Balances	62.444	54.908	8.924
	Other Current Assets	5.061	2.036	0.833
	Loans & Advances	147.911	144.838	110.747
Total Current Assets		1283.127	1179.886	1068.360
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	525.762	400.136	563.676
	Other Current Liabilities	158.467	111.568
	Provisions	71.908	35.721	28.636
Total Current Liabilities		756.137	547.425	592.312
Net Current Assets		526.990	632.461	476.048
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1256.088	1350.210	1140.453

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	4196.559	3524.614	3492.142
		Other Income	11.137	6.972	16.061
		TOTAL (A)	4207.696	3531.586	3508.203
Less	EXPENSES
		Cost of Goods Sold	2725.283	2264.922	2273.171
		Employees Costs	420.930	377.202	386.575
		Other Manufacturing, Administrative and Selling Expenses	713.131	696.994	716.950
		Exceptional Items	0.000	0.000	(491.196)
		TOTAL (B)	3859.344	3339.118	2885.500
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		348.352	192.468	622.703
Less	INTEREST & FINANCIAL EXPENSES (D)		54.243	81.878	66.690
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		294.109	110.590	556.013
Less/ Add	DEPRECIATION/ AMORTISATION (F)		93.697	98.578	88.612
	PROFIT BEFORE TAX (E-F) (G)		200.412	12.012	467.401
Less	TAX (H)		62.288	8.395	101.431
	PROFIT AFTER TAX (G-H) (I)		138.124	3.617	365.970
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		75.498	71.881	NA
Less	APPROPRIATIONS
		Interim Dividend on Equity Shares @ 25%	25.410	--	NA
		Proposed Final Dividend on Equity Shares @ 20%	20.328	--	NA
		Tax on Dividends	7.773	--	NA
		Transfer to General Reserve	23.629	--	NA
	BALANCE CARRIED TO THE B/S		136.482	75.498	NA
	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Exports	603.126	682.235	NA
	TOTAL EARNINGS		603.126	682.235	NA
	IMPORTS
		Raw Materials	48.278	63.838	NA
		Components	42.917	39.386	NA
		Stores & Spares	2.386	1.565	NA
		Capital Goods	12.513	24.766	NA
	TOTAL IMPORTS		106.094	129.555	NA
	Earnings Per Share (Rs.)		13.59	0.36	35.86

QUARTERLY RESULTS

PARTICULARS	30.06.2010	30.09.2010	31.12.2010	31.03.2011
Type	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Net Sales	1315.390	1436.990	1487.130	1600.370
Total Expenditure	1218.570	1312.280	1358.060	1459.970
PBIDT (Excl OI)	96.820	124.710	129.070	140.400
Other Income	3.490	1.500	2.600	5.190
Operating Profit	100.310	126.210	131.670	145.590
Interest	11.620	12.280	13.940	19.230
Exceptional Items	0.000	0.000	0.000	(44.950)
PBDT	88.690	113.930	117.730	81.410
Depreciation	22.990	22.360	24.810	23.230
Profit Before Tax	65.700	91.570	92.920	58.180
Tax	19.620	13.830	20.750	8.410
Provisions and contingencies	0.000	0.000	0.000	0.000
Profit After Tax	46.080	77.740	72.170	49.780
Extraordinary Items	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000
Net Profit	46.080	77.740	72.170	49.780

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	3.28	0.10	10.43
Net Profit Margin (PBT/Sales)	(%)	4.78	0.34	13.38
Return on Total Assets (PBT/Total Assets}	(%)	10.29	0.64	27.23
Return on Investment (ROI) (PBT/Networth)		0.24	0.02	0.64
Debt Equity Ratio (Total Liability/Networth)		1.39	1.61	1.31
Current Ratio (Current Asset/Current Liability)		1.70	2.16	1.80

LOCAL AGENCY FURTHER INFORMATION

APPROPRIATION

Profit available for appropriation is Rs.213.620 millions. The Directors have declared and paid interim dividend of 25% on the equity capital of the company for the year ended March 31, 2010 and recommend a further 20% as final dividend, making for a total dividend of 45% for the year. The amount on this account inclusive of tax on distributed profits and surcharge thereon, works out to Rs.53.510millions leaving the company with retained profits of Rs.160.110millions. Out of this, Rs.23.630millions is being transferred to the General Reserve and Rs.136.480millions being retained as surplus in the Profit and Loss Account.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

Growth in %

Segments	2009-10	2008-09
Passenger Cars	28	5
Utility Vehicles	24	-11
Small Commercial Vehicles (One Ton and below)	8	12
Light Commercial Vehicles	77	-24
Medium and Heavy Commercial Vehicles	30	-35
Three Wheelers	25	-1
Two Wheelers	25	4
Farm Tractors	27	-7

The domestic market continues its strong recovery which started in January 2009. Heavy and Light Commercial Vehicle segments recovered strongly in the second half of the year. The Passenger Cars continued to do extremely well and had a record year. The Farm Tractors achieved its highest ever production in the current financial year.

The aftermarket continued to be very robust during the year.

For Exports the year was difficult due to the effects of slowdown in the US and European markets. Besides lower consumption, there were inventory corrections by customers. There were some signs of improvement from December 2009.

OPERATIONAL AND FINANCIAL PERFORMANCE

Sales and Operating Revenue grew by 19.22% compared to 0.92% in the previous year. This was lead by a very strong growth of 31 % in OEM and Aftermarket. The Company continued to export its products during the year. While the domestic market revived in 2009-10, this was not the case with global market which resulted in negative growth in exports by 13% when compared with the previous year.

The PBT for the year was Rs.200.400 Millions against Rs.12.010 Millions in the previous year. This was achieved not only due to a robust growth in sales but also effective cost reduction initiatives and a reasonable stable raw material cost. Compared to the previous year the foreign exchange volatility was also far less which helped the performance.

OUTLOOK

Domestic market is expected to continue its strong growth. Passenger Car and Two wheelers are expected to register significant growth with new products launches. Light and Heavy commercial vehicles and tractors are expected to continue its growth momentum although at a lower rate. The Aftermarket demand continues to be strong.

Export market, which has also shown positive signs, is likely to improve further in the current year and the company is well placed to further grow in this segment.

Prices of commodities like steel and oil have started hardening but the general expectation is that the increases will be moderate.

The recent trend of strengthening of the Indian currency is causing concern. The continuance of subsidised exports from China and the maintenance of artificial peg on their currency could adversely affect Indian exports in the medium term.

The Company will continue to focus on improving productivity and quality besides cost reduction initiatives to sustain the improved performance.

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED MARCH 31, 2011

(Rs. in millions)

Particulars	Quarter Ended	Financial year ended
	31.03.2011 (Unaudited)	31.03.2011 (Audited)
1. (a) Net Sales / Income from operations	1581.085	5770.820
(b) Other Operating Income	19.280	69.050
Total Income	1600.365	5839.870
2. Expenditure
a) (Increase) / Decrease in stock in trade and work in progress	77.395	(4.387)
b) Consumption of raw materials	994.248	3825.484
c) Employees cost	144.011	548.308
d) Depreciation	23.232	93.389
e) Other expenditure	244.310	978.819
f) Total	1483.196	5441.613
3. Profit from operations before other income, interest and exceptional Items (1-2)	117.169	398.257
4. Other income	5.190	10.791
5. Profit (+) / Loss (-) before Interest and Exceptional items (3+4)	122.359	409.048
6. Interest	19.233	55.736
7. Profit after Interest but before Exceptional Items (5-6)	103.126	353.312
8. Exceptional Items	(44.947)	(44.947)
9. Profit (+)/Loss(-) from Ordinary Activities before tax (7+8)	58.179	308.365
10. Tax expense
a) Current tax	6.335	74.435
b) Deferred tax charge/ (credit)	2.065	(11.835)
11. Net Profit (+)/Loss(-) from Ordinary Activities after tax (9-10)	49.779	245.765
12. Extraordinary Item (net of tax expense)	--	--
13. Net Profit (+) / Loss (-) for the year period (11-12)	49.779	245.765
14. Paid up equity share capital (Face value of Rs.10/- per share)	101.641	101.641
15. Reserves excluding revaluation reserves as per balance sheet of previous accounting year	--	884.120
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 to be annualised) (Rs.)	4.90	24.18
(a) Basic and diluted EPS after Extraordinary items for the period, for the year to date and for the previous year (not to be annualised) (Rs.)	4.90	24.18
17. Public shareholding
- Number of shares	4565435	4565435
- Percentage of shareholding	44.91	44.91
18. Promoters and Promoters group Shareholding-
a) Pledged /Encumbered
- Number of shares	--	--
- Percentage of shares (as a % of total shareholding of the promoter and promoter group)	--	--
- Percentage of shares (as a % of total share capital of the company)	--	--
b) Non Encumbered
- Number of shares	5598710	5598710
- Percentage of shares (as a % of total shareholding of the promoter and promoter group)	100.00	100.00
- Percentage of shares (as a % of total share capital of the company)	55.09	55.09

Notes:

1 Statement of Assets and Liabilities as at March 31, 2011

Particulars	As at 31.03.2011
	(Audited)
Shareholder's Funds:
(a) Capital	101.641
(b) Reserves and Surplus	884.120
Loan Funds	777.801
Deferred Tax Liability	32.773
TOTAL	1796.335
Fixed Assets	1223.855
Investments	--
Current Assets, Loans and Advances
(a) Inventories	524.626
(b) Sundry Debtors	812.712
(c) Cash and Bank balances	58.399
(d) Other current assets	1.709
(e) Loans and Advances	157.414
Less : Current Liabilities and Provisions
(a) Liabilities	891.445
(b) Provisions	90.935
TOTAL	1796.335

2 The above results and the statement of assets and liabilities were reviewed by the Audit Committee and approved by the Board of Directors at their respective meetings held on May 20, 2011

3 Exceptional items represent amount paid to employees who opted for Voluntary Retirement Scheme extended to employees in the year 2011.

4 Previous period figures have been regrouped wherever necessary to conform to current period's presentation.

5 The Company operates in single segment, viz., components for transportation industry.

6 Interim dividend of Rs.4.50 per equity share declared by the Board of Directors on January 21, 2011 for the year ended March 31, 2011 was paid on February 9, 2011. Further the board of directors has recommended a final dividend of Rs.2.50 per equity share for the year ended March 31, 2011.

7 No. of investor complaints for the quarter ended March 31, 2011:

(a) Pending at the beginning-Nil (b) Received-2 (c) Resolved-2 (d) Remaining Unresolved-Nil

CONTINGENT LIABILITIES: (As on 31.03.2010)

• Claims against the Company not acknowledged as debts – Rs.74.891 millions.

FIXED ASSETS:

• Land – Freehold
• Land – Leasehold
• Leasehold Land Development Costs
• Buildings
• Plant and Machinery
• Furniture and Fittings
• Office Equipment
• Vehicles
• Licence

WEBSITE DETAILS:

Profile

· Inception of manufacturing facilities in the year 1960

· Manufacturer of steering and suspension systems for every segment of automobile industry, viz Passenger cars, Multi utility vehicles, Light commercial vehicles, Heavy commercial vehicles and Farm tractors

· Best in class manufacturing facilities

· Strategic Technical partnerships with M/s TRW Inc, USA for Steering Gear

· Products and TRW Ehrenreich GmbH and Company, Germany for Steering Linkage Products

· Holds major market share in India both in Manual steering gear systems and suspension systems

Design

Core design philosophy of “getting it right the first time”

Contemporary computer aided engineering and design applications

Finite element analysis for all critical parts

Vehicle steering system analysis to simulate real life conditions

Manufacturing

The production plants at Chennai (2 plants), Mysore, Puducherry each address a specific industry segment. Independent manufacturing cells produce specialised high end components.

· Chennai plant - Light Commercial vehicle, Heavy Commercial vehicle and Utility vehicles segments.

· Mysore plant - Tractor and Commercial vehicle segments.

· Puducherry plant - Passenger car segments.

· Varanavasi (Chennai) plant - Exports market.

· Uttarakhand plant - Caters specifically to the customers in the North of India.

Quality

IS0/TS 16949:2002 certifications for each of its manufacturing locations

IS0 14001 certified plants

OHSAS 18001 certified

Deming Application Prize winner in the year 2007

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.44.91
UK Pound	1	Rs.72.90
Euro	1	Rs.64.48

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		44

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.