MIRA INFORM REPORT

Report Date :

26.03.2011

IDENTIFICATION DETAILS

Name :	SOUTH INDIA SPONGE IRON PRIVATE LIMITED
Registered Office :	No. 34, 1^st Main Road, 1^st Block, Koramangala, Bangalore 560034, Karnataka
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	20.04.1992
Com. Reg. No.:	08- 037582
CIN No.: [Company Identification No.]	U28112KA1992PTC037582
TAN No.: [Tax Deduction & Collection Account No.]	BLRS17798E
PAN No.: [Permanent Account No.]	AAACK4363M
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer of Sponge Iron

RATING & COMMENTS

MIRA’s Rating :

B (29)

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

Maximum Credit Limit :	USD 290000
Status :	Moderate
Payment Behaviour :	Slow but Correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track. Trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. The company can be considered for business dealings with some caution.

NOTES :

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

ECGC Country Risk Classification List – April 1, 2010

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

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

INFORMATION PARTED BY (General Information)

Name :	Mr. Dhiraj
Designation :	Accountant
Date :	25.03.2011

LOCATIONS

Registered Office /Factory :	No. 34, 1^st Main Road, 1^st Block, Koramangala, Bangalore 560034, Karnataka, India
Tel. No.:	91-80-41504506
Fax No.:	91-80-41504507
E-Mail :	contact@sisipl.in

DIRECTORS

AS ON 30.09.2010

Name :	Mr. Gopendra Khetan
Designation :	Director
Date of Birth/Age :	13.05.1964
Date of Appointment :	20.04.1992
Name :	Mr. Rahul Khetan
Designation :	Director
Date of Birth/Age :	21.09.1977
Qualification :	MBA
Date of Appointment :	30.08.2004
Name :	Ms. Madhu Khetan
Designation :	Director
Date of Birth/Age :	21.09.1953
Date of Appointment :	20.04.1992
Name :	Mr. Mohanlal Mehta
Designation :	Director
Date of Birth/Age :	10.07.1929
Date of Appointment :	17.08.1999
Name :	Mr. Sarvesh Khetan
Designation :	Director
Date of Birth/Age :	10.08.1984
Date of Appointment :	21.12.2004
Name :	Mr. Chandra Shekher Sharma
Designation :	Director
Date of Birth/Age :	30.06.1965
Date of Appointment :	31.05.2008

KEY EXECUTIVES

Name :	Mr. Dhiraj
Designation :	Accountant

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2010

Names of Shareholders	No. of Shares
Mr. Gopendra Khetan	10
Mr. Rahul Khetan	1011380
Ms. Madhu Khetan	407210
Mr. Mohanlal Mehta	1000
Mrs. Savita Gupta	100
Mr. Atma Prakash Charla	100
Mr. R K Gupta	100
Mrs. Ruchi Khetan	50000
Mrs. Jyoti Prakash Khetan	2150000
Mrs. Uma Khetan	950000
Dr. Subhash Sood	30000
DR. Jayashree Sood	20000
R K Gupta HUF	100
Nanda Kishore Sharma	500000
TOTAL	5120000

AS ON 30.09.2010

Equity Share Breakup		Percentage of Holding
Category
Directors or relatives of directors		100.00
	Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Sponge Iron

Products :

Product Description	ITC Code
Sponge Iron	72031000

Terms :

Selling :

Cash, Credit

Purchasing :

Cash, Credit

PRODUCTION STATUS

AS ON 31.03.2010

Particulars	Unit	Installed Capacity	Actual Production
Sponge Iron (Lumps and Fines)	MT	30000	24193.00

GENERAL INFORMATION

Customers :

· End Users

· OEM’s

· Corporate

No. of Employees :

110 Approximately (Including Contract Workers)

Bankers :

Kotak Mahindra Bank, 36-38A, Nariman Bhavan, 227, D, Nariman Point, Mumbai 400021, Maharashtra, India

Facilities :

SECURED LOAN	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
Term Loans ( First Charge on Factory Land, Plant and Machinery)	36.872	55.651
Working Capital Loan (Includes inland letter of credit Rs.6.000 millions) ( Secured by Hypothecation of Inventories and Book Debts)	51.422	19.660
Plant and Machineries Loan ( Secured by hypothecation on Respective Machines for which loans are taken)	3.396	2.047
Vehicles Loan (Secured by hypothecation on Respective Vehcles for which loans are taken)	1.334	2.320
TOTAL	93.024	79.678
UNSECURED LOAN	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
From Corporate	0.280	5.216
Form Individuals (Share Holders)	4.271	1.600
TOTAL	4.551	6.816

Banking Relations :	--
Auditors :
Name :	GRV and PK Chartered Accountant
Address :	No. 205, 2^nd Floor, Jala Shambhavi Complex, 1^st Main Road, Gandhinagar, Bangalore 560009, Karnataka, India
Tel. No.:	91-80-22253439 / 22280684 / 41242688
Associates/Subsidiaries :	SI Infra-Build Private Limited Khetan International Private Limited

CAPITAL STRUCTURE

AS ON 30.09.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
7500000	Equity Shares	Rs. 10 each	Rs.75.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5120000	Equity Shares	Rs. 10 each	Rs.51.200 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		51.200	50.500	50.500
2] Share Application Money		0.000	0.000	10.100
3] Reserves & Surplus		21.610	8.857	6.581
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		72.810	59.357	67.181
LOAN FUNDS
1] Secured Loans		93.024	79.678	126.965
2] Unsecured Loans		4.551	6.816	2.130
TOTAL BORROWING		97.575	86.494	129.095
DEFERRED TAX LIABILITIES		9.440	10.864	11.331
TOTAL		179.825	156.715	207.607
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		100.670	111.487	112.036
Capital work-in-progress		5.324	2.418	3.566
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	99.898	34.738	41.184
	Sundry Debtors	11.600	8.286	42.140
	Cash & Bank Balances	1.504	1.998	5.045
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	13.911	9.854	22.793
Total Current Assets		126.913	54.876	111.162
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	46.639	8.411	12.189
	Other Current Liabilities	2.010	1.292	0.977
	Provisions	4.433	2.363	6.070
Total Current Liabilities		53.082	12.066	19.236
Net Current Assets		73.831	42.810	91.926
MISCELLANEOUS EXPENSES		0.000	0.000	0.079
TOTAL		179.825	156.715	207.607

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Sales	296.439	416.940	343.862
		Other Income	0.000	0.000	0.000
		TOTAL (A)	296.439	416.940	343.862
Less	EXPENSES
		Office Expenses
		Administrative Expenses	258.417	381.754	279.308
		Advertising Expenses
		TOTAL (B)	258.417	381.754	279.308
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		38.022	35.186	64.554
Less	FINANCIAL EXPENSES (D)		12.460	18.057	15.999
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		25.562	17.129	48.555
Less/ Add	DEPRECIATION/ AMORTISATION (F)		15.281	14.890	13.807
	PROFIT BEFORE TAX (E-F) (G)		10.281	2.239	34.748
Less	TAX (H)		0.328	0.037	2.631
	PROFIT AFTER TAX (G-H) (I)		9.953	2.276	32.117
	ACCUMULATED PROFIT OF EARLIER YEARS		8.858	6.582	(25.535)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		18.811	8.858	6.582
	Earnings Per Share (Rs.)		1.97	0.45	6.36

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	3.35	0.54	9.34
Net Profit Margin (PBT/Sales)	(%)	3.46	0.53	10.10
Return on Total Assets (PBT/Total Assets}	(%)	4.51	1.34	15.56
Return on Investment (ROI) (PBT/Networth)		0.14	0.04	0.51
Debt Equity Ratio (Total Liability/Networth)		2.19	1.84	2.37
Current Ratio (Current Asset/Current Liability)		2.39	4.54	5.77

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS

Rs. In Millions

Particulars	31.03.2010	31.03.2009	31.03.2008
For Raw Materials	45.265	8.099	9.185
For Services Provided	1.374	0.312	3.004
Sundry Creditors	46.639	8.411	12.189

FINANCIALS:

In the financial year 2008-09 their total production of sponge iron stood at 26,3 16 MT, which is equivalent to 87.8% of capacity utilisation. In the current financial year, their sponge iron production stood at 24,193 MT, which is equivalent to 80.64% of installed capacity. This fall in the production was only due to the maintenance shutdown of their Kiln for a period of 32 days. This kind of maintenance is usually expected in every 2-3 years. They are always striving towards achieving better capacity utilisation on a year on year basis.

CAPITAL ADDITIONS:

They have completed the work of building the temple at their factory and was inaugurated on 26.3.20 10. They have completed the work of storm drains as on 05.07.2010. They have built the rain water harvesting system along with storm water drains in such a way, that the entire storm water is channelled to the rain water harvesting pond. The rain water harvested will help in satisfying their need for water for 5 months in a year and they will not have to use their bore wells to draw ground water to this extend. This will help the company in contributing towards saving ground water utilisation and in turn the ecological system.

They have completed laying of Tar roads inside the factory premises as on 16.4.2010 Previously the factory internal roads were not tar roads, therefore, water sprinkling systems were laid all over the factory to control the fugitive dust. To control the fugitive dust further and help the company in saving water, they have now asphalted the internal roads.

BUSINESS AND OUTLOOK

The sponge iron demand has been steady during the financial year 2009-10. The demand for sponge iron will further improve in the coming years. This in turn will help the bottom-line of the company.

Note:

Registered office of the company has been shifted from 2^nd Floor, # 1056, 2^nd B Cross, 7^th Main Road, Koramangala, 3^rd Block, Bangalore 560034, Karnataka, India to the present address w.e.f. 23.09.2006

FIXED ASSETS:

• Land building
• Store Building
• Plant and Machinery
• Computers
• Furniture and Fixtures
• Vehicles
• Office Equipments
• Electrical Installations

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.44.65
UK Pound	1	Rs.71.91
Euro	1	Rs.63.28

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--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	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		29

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.