MIRA INFORM REPORT

Report Date :

15.03.2011

IDENTIFICATION DETAILS

Name :	NAGARJUNA OIL CORPORATION LIMITED
Formerly Known As :	PENNAR REFINERIES LIMITED
Registered Office :	MD Chambers, Old No.31, New No.53, Dr. Radhakrishnan Salai, Mylapore, Chennai - 600 004, Tamilnadu
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	20.05.1991
Com. Reg. No.:	18-20837
CIN No.: [Company Identification No.]	U30006TN1991PLC020837
TAN No.: [Tax Deduction & Collection Account No.]	CHEN02204G
PAN No.: [Permanent Account No.]	AAACN9369E
Legal Form :	A Closely Held Public Limited Liability Company.
Line of Business :	Subject offers Liquefied Petroleum Gas, Aviation Turbine Fuel, Motor Spirit, Coke, Sulphur and Fuel Oil.

RATING & COMMENTS

MIRA’s Rating :

B (39)

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

Maximum Credit Limit :	USD 41745000
Status :	Moderate
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a subsidiary of Nagarjuna Fertilizers and Chemicals Limited. It is a well established company having moderate track. The company is yet to commence its formal business activities. However, trade relations are reported as fair. Payments are reported to be usually correct. In view of a strong holding company, subject can be considered for business dealings at usual trade terms and conditions. Profit and Loss account of the company is not available.

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 :	MD Chambers, Old No.31, New No.53, Dr. Radhakrishnan Salai, Mylapore, Chennai - 600 004, Tamilnadu, India
Tel. No.:	91-44-28119008/ 9/ 10/ 28119016, 28119056, 28114578/ 4579
Fax No.:	91-44-28119002/ 28119058/ 28119056
E-Mail :	helpdesk@nocl.co.in corpcomm@nagarjunaoil.com
Website :	http://www.nocl.co.in
Group Website :	www.nagarjunagroup.com
Site Office :	No. 66, Beach Road, Cuddalore - 607 001, Tamilnadu, India
Tel. No.:	91-4142-294399, 294157
Fax No.:	91-4142-293115
Refinery Project Site Address :	Kayalpattu Village, Poochimedu ,Cuddalore District -608801, India
Tel. No.:	91-4142-270700
Fax No.:	91-4142-270707
Welfare Center and Guest-House:	No. 66, Beach Road, Cuddalore - 607 001, Tamilnadu,  India

DIRECTORS

As on 25.05.2010

Name :	Dr. Abid Hussain
Designation :	Chairman
Address :	237, Sector 15A, Noida – 201 301, Uttar Pradesh, India
Date of Birth/Age :	19.12.1926
Date of Appointment :	29.06.1996
Name :	Mr. S. Rammohan
Designation :	Managing Director
Address :	27/14, Landons Road, Kilpauk, Chennai – 600 010, Tamilnadu, India
Date of Birth/Age :	15.09.1942
Qualification :	BE (Electrical)
Date of Appointment :	10.07.2006
Name :	Mr. K.S. Raju
Designation :	Director
Address :	Digvijayam, Plot No.933A, Road No.47, Jubilee Hills, Hyderabad – 500 033, Andhra Pradesh, India
Date of Birth/Age :	29.06.1950
Date of Appointment :	02.08.1997
Name :	Mr. K. Rahul Raju
Designation :	Director
Address :	Digvijayam, Plot No.933A, Road No.47, Jubilee Hills, Hyderabad – 500 033, Andhra Pradesh, India
Date of Birth/Age :	31.08.1976
Date of Appointment :	30.09.2003
Name :	Mr. Vijayanand Yeluri
Designation :	Director
Address :	Sargam, 1-55/32, DCL Camelot Enclave, Majid Banda, Kondapur, Hyderabad – 500 084, Andhra Pradesh, India
Date of Birth/Age :	17.08.1947
Date of Appointment :	27.07.2009
Name :	Mr. S R Ramakrishnan
Designation :	Director
Address :	1005, Nanda Block, Kaushambi Apartments, Shahibabad – 201 010, Uttar Pradesh, India
Date of Birth/Age :	04.02.1935
Date of Appointment :	27.07.2009
Name :	Mrs. Salila George
Designation :	Director
Address :	D – 32, Maker Kundan Gardens, Juhu Tara Road, Santacruz (West), Mumbai – 400 049, Maharashtra, India
Date of Birth/Age :	22.07.1958
Date of Appointment :	24.03.2009
Name :	Mr. Ashok J Gupta
Designation :	Additional Director
Address :	C – 5, Tata Chemicals Limited Township, P.O. Babrala Industrial Estate, Badaun – 242 021, Uttar Pradesh, India
Date of Birth/Age :	28.10.1956
Date of Appointment :	27.07.2009
Name :	Mr. Ashutosh Tyagi
Designation :	Director
Address :	Bunglow No.9, Dream Land Society, Dr. Soares Road, Chembur, Mumbai – 400 071, Maharashtra, India
Date of Birth/Age :	02.04.1974
Date of Appointment :	27.07.2009
Name :	Mr. Mohammed Asad Pathan
Designation :	Director
Address :	K – 80, I Floor, Hauz Khas Enclave, New Delhi – 110 016, India
Date of Birth/Age :	09.03.1942
Date of Appointment :	27.07.2009
Name :	Mr. Minoo R Shroff
Designation :	Director
Address :	Penninsular House, 3^rd Floor, 235, Dr. D.N. Road, Mumbai – 400 001, Maharashtra, India
Date of Birth/Age :	28.01.1929
Date of Appointment :	29.03.2000
Name :	Mr. Sunil Paliwal
Designation :	Nominee Director
Address :	B/4/8, SAF Games Village, Koyambedu, Chennai – 600107, Tamilnadu, India
Date of Birth/Age :	25.11.1968
Date of Appointment :	08.01.2010

KEY EXECUTIVES

Name :	Mr. P.D. Krishna Prasad
Designation :	Company Secretary
Address :	L-38-K, Bharathidasan Colony, K.K. Nagar, Chennai – 600 028, Tamilnadu, India
Date of Birth/Age :	05.03.1969
Date of Appointment :	05.04.2008

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 25.05.2010

Names of Shareholders	No. of Shares
Nagarjuna Fertilizers and Chemicals Limited (India)	699719900
K. Lakshmi Raju	10*
K.S. Raju	10*
K. Rahul Raju	10*
Yasmin Mehta	10*
M. Srinivas	10*
T.V. Dwarakanath	10*
M. Ramakanth	10*
A.N. Chidamber	10*
A. Vyasa Maheshwara Rao	10*
K. Soma Raju	10*
Tamilnadu Industrial Development Corporation Limited (India)	27440000
Cuddalore Port Company Private Limited (India)	60700000
Tata Petrodyne Limited (India)	200880000
Total	988740000

* Shares held on behalf of Nagarjuna Fertilizers and Chemicals Limited.

As on 25.05.2010

Equity Share Breakup	Percentage of Holding
Category
Government Companies	2.78
Bodies corporate	97.22
Total	100.00

BUSINESS DETAILS

Line of Business :

Subject offers Liquefied Petroleum Gas, Aviation Turbine Fuel, Motor Spirit, Coke, Sulphur and Fuel Oil.

Products :

• Liquefied Petroleum Gas
• Motor Spirit (Gasoline)
• Naphtha
• Aviation Turbine Fuel
• High Speed Diesel (Gasoil)
• Fuel Oil
• Bitumen
• Coke
• Sulphur

Item Code No. (ITC Code)	2710.00
Product Description	Liquid Petroleum, Gas Motor Spirit
Item Code No. (ITC Code)	2711.12
Product Description	Jet/ Kerosene, High Speed Diesel
Item Code No. (ITC Code)	2711.13
Product Description	Furnace Oil Sulphur

GENERAL INFORMATION

Bankers :

• State Bank of Patiala, Atlanta, 1^st Floor, Jamanalal Bajaj Marg, Nariman Point, Mumbai – 400 021, Maharashtra, India
• Indian Overseas Bank, Central Office: 762, Anna Salai, Chennai – 600 002, Tamilnadu, India
• Bank of India

Facilities :

Secured Loans :	As on 31.03.2010 Rs. in Millions	As on 31.03.2009 Rs. in Millions
Term Loans
From Banks	16199.534	5264.073
From Financial Institutions	2832.800	829.900
Vehicle Loans	1.489	1.208
Total	19033.823	6095.181
Unsecured Loans	As on 31.03.2010 Rs. in Millions	As on 31.03.2009 Rs. in Millions
From Bank	2500.000	0.000
Interest accrued and due - Bank	5.548	0.000
From Holding Company	482.223	399.000
Total	2987.771	399.000

Banking Relations :

--

Financial Institution :

IDBI Trusteeship Services Limited, Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai – 400 001, Maharashtra, India

Auditors :

Name :

M. Bhaskara Rao and Company

Chartered Accountants

Address :

5-D, Fifth Floor, “Kautilya”, 6-3-652, Somajiguda, Hyderabad – 500 082, Andhra Pradesh, India

Fellow Subsidiaries :

Jaiprakash Engineering and Steel Company Limited

Holding Company :

Nagarjuna Fertilizers and Chemicals Limited

CIN No.: L24129AP1976PLC001983

Associates/Subsidiaries :

Nagarjuna Holdings Limited

Fellow Subsidiaries :

Jaiprakash Engineering and Steel Company Limited

CAPITAL STRUCTURE

As on 25.05.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
2000000000	Equity Shares	Rs.10/- each	Rs.20000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
988740000	Equity Shares	Rs.10/- each	Rs.9887.400 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		9887.400	9845.000	6997.200
2] Share Application Money		548.800	548.800	310.000
3] Reserves & Surplus		0.107	0.107	0.107
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		10436.307	10393.907	7307.307
LOAN FUNDS
1] Secured Loans		19033.823	6095.181	1179.025
2] Unsecured Loans		2987.771	399.000	1000.000
TOTAL BORROWING		22021.594	6494.181	2179.025
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		32457.901	16888.088	9486.332
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		547.730	249.273	37.387
Capital work-in-progress		19072.588	12373.469	8644.647
Expenditure during construction pending allocation		6623.479	4252.376	3862.168
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	0.000	0.000	0.000
	Sundry Debtors	0.000	0.000	0.000
	Cash & Bank Balances	7356.055	1626.724	685.672
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	12.893	33.735	7.618
Total Current Assets		7368.948	1660.459	693.290
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities & Provisions	1481.934	1974.579	4078.250
Total Current Liabilities		1481.934	1974.579	4078.250
Net Current Assets		5887.014	(314.120)	(3384.960)
MISCELLANEOUS EXPENSES		327.090	327.090	327.090
TOTAL		32457.901	16888.088	9486.332

CIF Value of imports – Cost towards Capital Goods – Rs.2423.595 millions (As on 31.03.2010)

KEY RATIOS

PARTICULARS	31.03.2010	31.03.2009	31.03.2008
Debt Equity Ratio (Total Liability/Networth)	2.25	0.81	0.86
Current Ratio (Current Asset/Current Liability)	4.97	0.84	0.17

LOCAL AGENCY FURTHER INFORMATION

form 8:-

This form is for	Modification of charge
Charge identification number of the modified	10125013
Corporate identity number of the company	U30006TN1991PLC020837
Name of the company	NAGARJUNA OIL CORPORATION LIMITED
Address of the registered office or of the principal place of business in India of the company	MD Chambers, Old No.31, New No.53, Dr. Radhakrishnan Salai, Mylapore, Chennai - 600 004, Tamilnadu, India
Type of charge	Immovable Property Any interest in immovable property Movable Property Floating Charge Goodwill Patent, license under a patent Trademark Copyright or license under copyright Others (Plant and machinery, all other assets)
Particular of charge holder	CIN No.: U65991MH2001GOI131154 IDBI Trusteeship Services Limited, Asian Building, Ground Floor, 17, R. Kamani Marg, Ballard Estate, Mumbai – 400 001, Maharashtra, India E-Mail: itsl@idbitrustee.co.in
Nature of description of the instrument creating or modifying the charge	Indenture of Mortgage dated 15^th Day of May, 2009 executed in favour of IDBI Trusteeship Services Limited.
Date of instrument Creating the charge	15.05.2009
Amount secured by the charge	Rs.31930.000 millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest: Higher of prevailing State Bank of India advance rate (SBAR) on that particular day plus 50 basis points or prevailing IDBI Bench Mark Prime lending rate (BPLR) on that particular day for the entire outstanding loan of the lenders is payable to all lenders in the consortium except Life Insurance Corporation of India (LIC). The interest rate for LIC is 11.25% per annum. Terms of Repayment: The facility has door to door maturity of 13 years comprising of construction period of 3 years, a moratorium of 2 years thereafter and repayment of 8 years thereafter. The entire loan amount of INR 31930 millions is to be repaid in 32 equal quarterly installments by making payment to each of the lenders in the consortium of their respective share in the overall limit of INR 31930 millions as agreed to by them. Extent and Operation of the charge: The charge operates as continuing security for the due repayment and discharge by the company of the credit facilities aggregating to INR 31930 millions together with interest, costs and charges. Others: The lenders have the rights to assign the loan from time to time, in part of in whole, and upon such assignment the benefit of the charge shall be available to the assignee also.
Short particulars of the property charged	Freehold Land admeasuring an extent of 509 acres and leasehold land admeasuring an extent of 1065.96 acres both situated at Cuddalore including all structures erected/ to be erected thereon, rights, interest, claims and benefits under the projects documents, structured financial assistance from the Government of Tamilnadu, Trust and Retention Account and Debt Service Reserve Account and all other assets wherever situated are charged in favour of IDBI Trusteeship Services Limited.
Particulars of the present modification	The credit facilities are additionally secured by a charge on the immovable properties (both freehold and leasehold land), rights, interest, claims and benefits under the projects documents, structured financial assistance from the Government of Tamilnadu, Trust and Retention Account and Debt Service Reserve Account and all other assets of the Borrower.

PROJECT REVIEW:

The original project cost of Rs. 47900.000 millions was determined in 2006. Since then, many developments have taken place having a bearing on the project cost,

The company appointed M/s. Technip KTI Limited to reassess the project cost taking into consideration the delay in commencing tile project and also due to increases in the interest rates and foreign exchange rates.

M/s. Technip KTI Limited was also mandated to assess the increase in the project cost due to configuration changes in the scope 10 take advantages of the price differentials between sweet and sour crude. The company has taken these steps to improve the profitability of the Refinery Project and maintain the viability to the stakeholders of the company.

The board of directors of the company have approved the revised project cost estimate of Rs. 69600.000 millions in January, 2010.

The company has also taken necessary steps to tie up both additional debt finance of Rs.14470.000 millions from financial institutions and additional equity of Rs.7230.000 millions from private equity investors.

Based on the feedback received so far, the company is confident of tying up the additional financial assistance required for the project and also of implementing the project as per schedule.

The quarterly review meeting on the project status between the senior management staff of C B & I Lummus , the project management consultant and of the company was held in December 2009 . The major project milestones were reviewed and the necessary plans for timely execution of the project were detailed. Infrastructure, personnel and project schedule related issues were discussed in detail.

The engineering activities for all the relocated units of the project are in progress the Liague and in India. The selection of all the EPCM contractors for the various process units have been completed and engineering work is well advanced. The only major process unit contract pending is the LSTK contract for the Diesel Hydro Upgrader Unit (DHU) which is in an advanced stage arid will be awarded by April 2010.

As a time saving measure and to capture the favorable market conditions enquiries for 29 critical long lead items have been ordered and manufacturing lies commenced.

Shipment of equipment from European ports has been completed in September 2009 before the scheduled date of December 2009. The contractors for refurbishment of various equipment have been lined up and refurbishment work is in hill swing.

Memorandum of understanding for implementation of a 3x 60 mw coal based power plant has been signed with M/s SEW Infrastructure Limited. The relevant agreement(s) are in an advanced stage of finalization.

The crude supply and product, off-take (export) contract with British Petroleum is in place, as also the agreement with domestic marketing with Indian oil Corporation.

Boundary Wall, Warehouse and Workshop works are in advanced stage and nearing completion. Temporary drain, final grading and lighting work have also been taken up. Civil works on foundations of equipment for all relocated units has commenced.

Sufficient skilled manpower for the project is in place.

The Refinery Project is expected to commence commercial production by November, 2011.

FIXED ASSETS:

• Freehold Land
• Leasehold Land
• Building
• Furniture, Fixtures and Office Equipment
• Vehicles

WEBSITE DETAILS:

The Company

Subject, a subsidiary of Nagarjuna Fertilizers and Chemicals Limited, is focused on pursuing the opportunities in Oil and Gas domain. The company is currently involved in developing a Petroleum Refinery project at Cuddalore, Tamilnadu.

Alliance

Nagarjuna group is partnering with State Government of Tamilnadu and Tata group apart from few other reputed corporate groups in implementing the Refinery project. The project participants bring in strong expertise and experience towards development of the refinery project. The company has drawn up key alliances with reputed technology and service providers for speedy implementation of the project. Forging mutually beneficial relationships with established market players has been one of the key strengths of the company.

Subject is setting up a 6 MMTPA refinery project at Cuddalore in Tamilnadu. Nagarjuna Fertilizers and Chemicals Limited (NFCL), a group company of Nagarjuna group along with Tamilnadu Industrial Development Corporation Limited (TIDCO), the investment arm of Tamilnadu Government as a co-promoter, are promoting subject.

The refinery’s location on the Eastern coast provides it with logistic advantages to serve as an ideal source for exports. Being located on the Eastern coast provides the refinery with logistic advantages to serve as an ideal source for exports.

Project Highlights

• 6 Million Tones Per Annum (125,000 bpd) Refinery at Cuddalore, Tamilnadu (200 km south of Chennai on the East coast)
• Refinery complex to have associated marine infrastructure including Single Point Mooring (for crude oil handling in Very Large Crude Carriers) and Jetty (for finished product handling)
• State-of-the-art Refinery with high complexity factor designed to take advantage of processing heavy and sour crude oil
• Products from the Refinery meeting Indian and International specifications

Project Progress

• Project activities commenced at site
• Refinery equipment arriving at site; Erection activities to commence shortly
• Refinery scheduled to be on stream by 2011

THE REFINERY:

The Refinery project envisages setting up of facilities to refine 6 million metric tonnes of crude petroleum per annum by relocating a refinery from Germany and adding new process units, offsites and Utilities. In addition crude receipt and product evacuation facilities are also planned. The refinery project on completion will produce Euro IV auto fuels, like Petrol, Diesel apart from the products like LPG, Bitumen etc.

All statutory clearances required for setting up the refinery and the marine facilities are already obtained.

The project site is spread over an area of 1600 acres, which includes 300 acres of greenbelt. Most of the plant area has been site graded. About 40% internal roads are already laid. Site project office is almost complete. The project is expected to go on stream in 33 months from the date of financial closure.

The competitive advantages the refinery enjoys are:

· Location in the area that is deficit for petroleum products and amidst the high demand centers

· Easy access to metropolitan cities in southern region through rail and road

· Single Buoy Mooring to help import crude through Very Large Crude Carriers (VLCC)

· Jetty with 2 berths capable of handling up to 65000 DWT tankers for exports / coastal movement – ideal location for exports to SAARC and Southeast Asian countries

· Refinery with high distillate yield – capable of producing value added products which are in high demand

· Infrastructure facilities provide scope for further expansion of refining capacity

The refinery on commissioning will go long way in satiating the energy demands of the state and nation resulting in employment generation and various other benefits to the state.

Group

Nagarjuna group, established in the year 1974, is one of the fastest growing corporate conglomerates in India. Within a decade of its inception, the Group has forged successful partnerships, with credible international and Indian enterprises and fostered close relationships in both technological and financial spheres of its business.

The group has core competence in setting up large projects, technology absorption and developing  innovative agri solutions. It has an excellent track record of operational performance, safety and commitment to environment.

Today, Nagarjuna group has grown in to a prominent Industrial house with an asset base of over USD 2.5 billion. It has interests in the areas of Agri business, Petroleum, Power and Lifesciences.

Agriculture: The flagship company of the group, Nagarjuna Fertilizers and Chemicals Limited (NFCL) is the largest manufacturer of Urea in South India.

Nagarjuna is an integrated Ag group with core competencies in the fields of plant nutrition, protection, irrigation, farm services and food processing. The products and services are designed to provide consumers access to safe, nutritious and tasty food and growers with maximum economic returns. They are one of the most recognized agricultural brands in India.

Agrichem: Nagarjuna Agrichem manufactures a comprehensive range of pesticide technicals, formulations and custom manufactured fine chemicals conforming to international quality standards and specifications. It has an impressive range of formulations in the categories of Insecticides, Fungicides and Herbicides.

Life Sciences: Focus is on achieving breakthroughs in the areas of Genomes and New Molecule discovery. Focus also lies in meeting the unmet medical needs and generating environment-friendly, value-added agriculture produce (yield, composition like oils, nutritive content, flavor and taste).

Energy: The aim at Nagarjuna is to meet the energy needs of India, in ways that are affordable and environmentally viable, now and in the future. Nagarjuna is an upcoming integrated energy enterprise with core competencies in the fields of petroleum and power.

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.46.81
UK Pound	1	Rs.76.73
Euro	1	Rs.69.83

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	3
--CREDIT LINES	1~10	4
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		39

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

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