MIRA INFORM REPORT

Report Date :

04.11.2011

IDENTIFICATION DETAILS

Name :	L AND T – MHI TURBINE GENERATORS PRIVATE LIMITED (w.e.f. 22.11.2007)
Formerly Known As :	L AND T TURBO GENERATOR PRIVATE LIMITED
Registered Office :	L and T House, Ballard Estate, Mumbai-400001, Maharashtra
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	27.12.2006
Com. Reg. No.:	11-166541
Capital Investment/ Paid-up Capital:	Rs. 1501.000 Millions
CIN No.: [Company Identification No.]	U31101MH2006PTC166541
IEC No.:
TAN No.: [Tax Deduction & Collection Account No.]	MUML06873G
PAN No.: [Permanent Account No.]	AABCL2729F
Legal Form :	Private Limited Liability Company.
Line of Business :	Manufacturer of Super Critical Steam Turbine and Generators.
No. of Employees:	Approximately 1000

RATING & COMMENTS

MIRA’s Rating :

Ba (42)

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

Maximum Credit Limit :	USD 2900000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a joint venture between Larsen and Toubro Limited, India and Mitsubishi Heavy Industries Limited, Japan. It is an established company having satisfactory track. There appears some accumulated losses recorded by the company. However, trade relations are reported as fair. Business is active. Payments are reported to be usually correct. In view of strong holding, the company can be considered normal for business dealings at usual trade terms and conditions.

NOTES:

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

INFORMATION PARTED BY

Name :	Mr. Shalesh Krishna Kumar
Designation :	Finance Manager
Contact No.:	91-261-2808201
Date :	03.11.2011

LOCATIONS

Registered Office :	L and T House, Ballard Estate, Mumbai-400001, Maharashtra, India
Tel. No.:	91-22-67525656
Fax No.:	91-22-67525893
E-Mail :	ss-sec@lth.itindia.com
Corporate Office/ Factory :	Hazira Manufacturing Complex, Gate No. 8, West Side, Surat Hazira Road, Post Bhatha, Surat-394510, Gujarat, India

DIRECTORS

As on 30.09.2011

Name :

Masayuki Kubo

Designation :

Director appointed in Casual Vacancy

Address :

3-4-4-501, Kamioooka-Nishi, Konan-Ku, Yokohama- Shi, Kangawa-Ken, Japan

Date of Birth/Age :

15.08.1952

Date of Appointment :

01.04.2011

DIN No.:

01585730

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U29119MH2006PTC165102	L&T - Mhi Boilers Private Limited	Director	28/05/2007	28/05/2007	-	Active	NO
2	U31101MH2006PTC166541	L&T - Mhi Turbine Generators Private Limited	Director	23/06/2011	01/04/2011	-	Active	NO
3	U29292DL2011FTC225628	Mitsubishi Power Systems India Private Limited	Director	28/09/2011	28/09/2011	-	Active	NO

Name :

Mr. Sravankumar Yeleswarapu Venkatasatya

Designation :

Director

Address :

801, Verona, Hiranandani Gardens, Powai, Mumbai-400076, Maharashtra, India

Date of Birth/Age :

24.02.1960

Date of Appointment :

27.12.2006

Date of Ceasing:

17.02.2008

DIN No.:

01080060

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U31101MH2006PTC166541	L&T - Mhi Turbine Generators Private Limited	Director	27/12/2006	27/12/2006	17/01/2008	Active	NO
2	U74900MH2008PLC182601	L&T Natural Resources Limited	Director	23/05/2008	23/05/2008	20/01/2010	Active	NO
3	U40102PB2007SGC031039	Nabha Power Limited	Director	18/01/2010	18/01/2010	07/10/2010	Active	NO
4	U40100MH2006PLC160413	L&T Power Limited	Director	18/10/2010	18/10/2010	-	Active	NO

Name :

Mr. Vijay Chandra Bedi

Designation :

Director

Address :

402, Rivera Tower, Dumas Road, Surat-395007, Gujarat, India

Date of Birth/Age :

27.08.1946

Date of Appointment :

17.01.2008

DIN No.:

02005709

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U91110GJ1993NPL020141	Hazira Area Industries Association	Director	07/09/1993	07/09/1993	-	Active	NO
2	U31101MH2006PTC166541	L&T - Mhi Turbine Generators Private Limited	Director	28/04/2008	17/01/2008	-	Active	NO
3	U29119MH2006PTC165102	L&T - Mhi Boilers Private Limited	Director	28/04/2008	20/02/2008	-	Active	NO
4	U74900TN2007PLC065356	L&T Shipbuilding Limited	Director	10/06/2008	25/03/2008	-	Active	NO
5	U27109MH2009PTC193699	L&T Special Steels And Heavy Forgings Private Limited	Director	01/07/2009	01/07/2009	-	Active	NO

Name :

Yozaburo Mabuchi

Designation :

Director

Address :

2 33 13 Shiroy Amadai, Naga Sakishi, Nagasaki, Ken, Nagasaki, Japan

Date of Birth/Age :

04.10.1951

Date of Appointment :

23.12.2008

DIN No.:

01585780

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U29119MH2006PTC165102	L&T - Mhi Boilers Private Limited	Director	28/05/2007	28/05/2007	-	Active	NO
2	U31101MH2006PTC166541	L&T - Mhi Turbine Generators Private Limited	Director	16/07/2010	23/12/2008	-	Active	NO

Name :

Mr. Ravi Uppal

Designation :

Director

Address :

No. 484, 9^th Main, 3^rd Cross, HAL II Stage, Indiranagar, Bangalore-560008, Karnataka, India

Date of Birth/Age :

09.05.1952

Date of Appointment :

17.02.2009

DIN No.:

00025970

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	L32202KA1949PLC032923	Abb Limited	Director	03/06/2008	01/10/2001	01/01/2009	Active	NO
2	U72200KA2001PLC032179	Abb Global Industries And Services Limited	Director	26/07/2007	19/10/2001	30/07/2008	Active	NO
3	U74140KA1996PLC031501	Abb Holdings (South Asia) Limited	Director	31/03/2007	23/10/2001	30/06/2007	Amalgamated	NO
4	L70109AP1995PLC019116	Transport Corporation Of India Limited	Director	31/10/2001	31/10/2001	12/10/2007	Active	NO
5	U40101KA1986PLC007404	Bhoruka Power Corporation Limited	Director	24/08/2004	24/08/2004	03/09/2007	Active	NO
6	U40109TN1993PTC026223	St-Cms Electric Company Private Limited	Director	08/03/2005	08/03/2005	30/06/2007	Active	NO
7	L18101KA1994PLC016554	Page Industries Limited	Director	27/07/2007	30/10/2006	01/11/2010	Active	NO
8	U20232KA1978PLC003383	Raman Boards Limited	Director	26/07/2007	01/03/2007	-	Amalgamated	NO
9	U40100MH2006PLC160413	L&T Power Limited	Director	18/10/2010	01/01/2009	-	Active	NO
10	U29119MH2006PTC165102	L&T - Mhi Boilers Private Limited	Director	29/05/2009	17/02/2009	-	Active	NO
11	U31101MH2006PTC166541	L&T - MHI TURBINE GENERATORS PRIVATE LIMITED	Director	29/05/2009	17/02/2009	-	Active	NO
12	U74210MH1995PLC088099	L&T-Sargent & Lundy Limited	Director appointed in casual vacancy	10/03/2009	10/03/2009	-	Active	NO
13	U31401MH2010PTC204403	L&T Howden Private Limited	Director	17/06/2010	17/06/2010	-	Active	NO
14	L99999MH1946PLC004768	Larsen And Toubro Limited	Whole-time director	01/11/2010	01/11/2010	-	Active	NO

Name :

Yoshiyuki Hanasawa

Designation :

Director

Address :

6-53-103, Chitose-Machi, Nagasaki, Japan 8528135

Date of Birth/Age :

23.01.1958

Date of Appointment :

15.07.2010

DIN No.:

03212809

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U31101MH2006PTC166541	L&T - Mhi Turbine Generators Private Limited	Director	16/07/2010	15/07/2010	-	Active	NO
2	U29119MH2006PTC165102	L&T - Mhi Boilers Private Limited	Director	01/04/2011	01/04/2011	-	Active	NO

KEY EXECUTIVES

Name :	Mr. Shalesh Krishna Kumar
Designation :	Finance Manager
Name :	Mr. Subrat Kumar Das
Designation :	Manager
Address :	52, Ashirwad Bunglows, Dumas Road, Surat-395007, Gujarat, India
Date of Birth/Age :	17.03.1952
Date of Appointment :	10.04.2008
Name :	Mr. Anil Kumar Mehta
Designation :	Secretary
Address :	9, Navratan Baug, Indore-452001, Madhya Pradesh, India
Date of Birth/Age :	07.09.1964
Date of Appointment :	01.03.2011

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 30.09.2011)

Names of Shareholders	No. of Shares
Mitsubishi Heavy Industries Limited, Japan	97539000
Mitsubishi Electric Corporation, Japan	25010000
Larsen and Toubro Limited, Maharashtra, India	127551000
Total	250100000

List of Allottees	No. of Shares Allotted
Mitsubishi Electric Corporation, Japan	51000000
Larsen and Toubro Limited, Maharashtra, India	49000000
Total	100000000

Equity Share Breakup (Percentage of Total Equity)

(AS ON 23.06.2011)

Category	Percentage
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	49.00
Bodies corporate	51.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Super Critical Steam Turbine and Generators.
Terms :
Selling :	Cash and Credit
Purchasing :	L/C

GENERAL INFORMATION

Suppliers :

· Goodwin Steel Casting- Britain

· S.R. Steel, Hazira,

Customers :

OEM’s

No. of Employees :

Approximately 1000

Bankers :

ICICI Bank Limited, Landmark Race Cource Circle, Alkapuri, Baroda-390015, Gujarat, India

Facilities :

Unsecured Loans	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
Loan from Financial Institution (Japan Bank for International Co-Operation)	1386.626	0.000
Total	1386.626	0.000

Banking Relations :	--
Auditors :
Name :	Sharp and Tannan Chartered Accountant
Address :	Ravindra Annexe, 194, Churchgate Reclamation, Dinshaw Vachha Road, Mumbai-400020, Maharashtra, India
PAN No.:	AAAFS2967E
Ultimate Holding Company :	Larsen and Toubro Limited CIN No.: L9999MH1946PLC004768
Holding Company :	· L and T Power Limited
Related parties with whom transaction were carried out during the year :	· Larsen and Toubro Limited · L and T Valdel Engineering Limited · L and T-MHI Boilers Private Limited · Larsen and Toubro Infotech Limited · L and T- Sargent and Lundy Limited · Mitsubishi Heavy Industries Limited · Mitsubishi Electric Corporation

CAPITAL STRUCTURE

As on 23.06.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
265000000	Equity Share	Rs.10/- each	Rs. 2650.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
250100000	Equity Share	Rs.10/- each	Rs. 2501.000 Millions

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
165000000	Equity Share	Rs.10/- each	Rs. 1650.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
76551000	Equity Share (Fully paid held by L and T Power Limited)	Rs.10/- each	Rs. 765.510 Millions
58539000	Equity Shares (Fully paid held by Mitsubishi Heavy Industries Limited)	Rs. 10/- each	Rs. 585.390 Millions
15010000	Equity Shares (fully paid held by Mitsubishi Electric Corporation)	Rs. 10/- each	Rs. 150.100 Millions
	Total		Rs. 1501.000 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		1501.000	1001.000	101.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		(66.743)	0.000	0.000
4] (Accumulated Losses)		(693.641)	(44.630)	0.000
NETWORTH		740.616	956.370	101.000
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		1386.626	0.000	0.000
TOTAL BORROWING		1386.626	0.000	0.000
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		2127.242	956.370	101.000
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		309.111	43.550	40.120
Capital work-in-progress		2515.057	855.810	5.755
INVESTMENT		1120.355	184.574	98.920
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3830.358	51.884	0.000
	Sundry Debtors	0.000	0.000	0.000
	Cash & Bank Balances	130.921	0.345	2.185
	Other Current Assets	2102.517	1089.092	0.944
	Loans & Advances	0.000	0.000	0.000
Total Current Assets		6063.796	1141.321	3.129
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	385.577	128.322	43.502
	Other Current Liabilities	7489.032	1140.207	5.815
	Provisions	6.468	0.356	0.000
Total Current Liabilities		7881.077	1268.885	49.317
Net Current Assets		(1817.281)	(127.564)	(46.188)
MISCELLANEOUS EXPENSES		0.000	0.000	2.393
TOTAL		2127.242	956.370	101.000

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009
	SALES
		Income	4276.023	67.546
		Other Income
		TOTAL
			4276.023	67.546
Less	EXPENSES
		Office Expenses
		Administrative Expenses
		Advertising Expenses	4924.986	109.427
		Depreciation
		Interest
		TOTAL	4924.986	109.427
	PROFIT/ LOSS BEFORE TAX		(648.963)	(41.881)
Less	TAX		0.048	2.749
	PROFIT/ LOSS AFTER TAX		(649.011)	(44.630)
	EARNINGS IN FOREIGN CURRENCY
		Other Earnings	0.836	NA
	TOTAL EARNINGS		0.836	NA
	Earnings Per Share (Rs.)		(4.88)	(0.99)

Expected Sales (2011-2012) : Rs. 10950.000 Millions

The above information has been parted by Mr. Shalesh Krishna Kumar (Finance Manager)

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(15.18)	(66.07)	NA
Return on Total Assets (PBT/Total Assets}	(%)	(10.18)	(3.53)	NA
Return on Investment (ROI) (PBT/Networth)		(0.88)	(0.74)	NA
Debt Equity Ratio (Total Liability/Networth)		12.51	1.33	0.49
Current Ratio (Current Asset/Current Liability)		0.77	0.90	0.06

LOCAL AGENCY FURTHER INFORMATION

DETAILS OF SUNDRY CREDITORS

(Rs. In Millions)

Particulars	31.03.2010	31.03.2009	31.03.2008
Sundry Creditors
Due to Micro and Small Enterprises	--	--	--
Ultimate holding company and its Group Companies	220.896	115.769	7.610
L and T Power Limited	0.000	0.000	0.009
Mitsubishi Heavy Industries Limited	109.969	4.565	23.324
Mitsubishi Electric Corporation	54.712	7.988	0.000
Sundry Creditors	0.000	0.000	12.559
Total	385.577	128.322	43.502

Check List by Info Agents	Available in Report (Yes/ No)
Year of Establishment	Yes
Locality of the firm	Yes
Constitutions of the firm	Yes
Premises details	Yes
Type of Business	Yes
Line of Business	Yes
Promoter’s Background	--
No. of Employees	Yes
Name of person Contacted	Yes
Designation of contact person	Yes
Turnover of firm for last 3 years	Yes
Profitability for last three years	No
Reasons for Variation <> 20%`	--
Estimation for coming financial year	Yes
Capital in the business	No
Details of sister concern	--
Major Suppliers	Yes
Major Customers	No
Payment Terms	Yes
Export/ Import Details (If applicable)	No
Market Information	--
Litigations that the firm/ Promoter involved in	--
Banking Details	Yes
Banking Facility details	--
Conduct of the banking account	--
Buyer visit details	--
Financials, fi provided	Yes
Incorporation details, if applicable	--
Last accounts filed at ROC	--
Major Shareholders , if available	--

Trade References:

· Goodwin Steel Casting- Britain

· S.R. Steel, Hazira,

Performance of the company:

The gross revenues for the financial year is Rs. 4276.023 Millions as against Rs. 67.546 Millions for the period ended 31^st March 2009. This reflects the considerable progress achieved in completion of the first project received by the company. The Company is expected to better the performance in coming years with phase localization plan of products/ components coupled with expected increase in volume. The company has made substantial progress in the first phase of manufacturing facilities and increased the talent pool to meet the projection of growing business opportunities. The continuous focus on training of people and adopting best manufacturing process are expected to add significantly to the ability to manufacture complex products. During the year, they have received orders for 5 sets of Supercritical Steam Turbines and Generators. The current order booking position is healthy and the company is confident of improving the performance significantly in the current year.

Management Discussion and Analysis

Business Development and Outlook

The strong growth in Indian economy needs a healthy and robust power generation in order to provide reliable and continuous power to meet the ever increasing demand in the Country. The Power sector presently opens a window of opportunity and brings unprecedented challenges to demonstrate the capability to manufacture complex products. They have made constant efforts to become the second largest domestic producer of the state of the art supercritical Turbines and Generators with comprehensive range of products and services.

The primary growth driver for the sector is the Government’s “Power for all by 2012” programme, which is designed to develop substantial power generation capacity in the country. As a result, the competition has intensified with many international players increasing their focus on the fast growing Indian market by setting up manufacturing facilities in India by forming joint ventures with local companies.

The company is confident of meeting the market requirements with focused efforts to manufacture/ delivery the products and to become more cost competitive in the coming years. The initiatives undertaken by the Management are expected to add significantly to execute complex jobs with improvement in efficiency and productivity once the new manufacturing facility is fully operational.

Strategic Initiatives:

The company is well on its course to meet the challenges of implementing state of the art technology for developing of engineering drawing and designs for manufacture of super critical Turbines and Generators. In order to have a seamless integration with different function and to improve the business process, the Company is in advance stage of implementing ERP package (SAP).

Company Overview:

Subject is a joint venture company between L and T Power Limited (a 100% owned subsidiary of Larsen and Toubro Limited) and Mitsubishi Heavy Industries Limited, Japan. The company is in the advance stage of setting up of state-of-the-art facility to manufacture supercritical Steam Turbines and Generators.

Bankers Charges Report as per Registry

Corporate identity number of the company	U31101MH2006PTC166541
Name of the company	L AND T – MHI TURBINE GENERATORS PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	L and T House, Ballard Estate, Mumbai-400001, Maharashtra, India
This form is for	Modification of charge
Charge identification (ID) number of the charge to be modified	10240270
Type of charge	Book Debts Movable Property
Particular of charge holder	ICICI Bank Limited, Landmark Race Cource Circle, Alkapuri, Baroda-390015, Gujarat, India Email: sachin.jog@icicibank.com
Nature of instrument creating charge	Third Supplemental Deed of Hypothecation
Date of instrument Creating the charge	23.09.2011
Amount secured by the charge	Rs. 12500.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest Credit Arrangement Letter No. CBG/2011-12/CMOG No 12/CBGMUM/;36536 dated September 22, 2011 Terms of Repayment As per Supplemental Facility Agreement dated September 23, 2011 and supplemental Letter of Credit facility Agreement dated September 23, 2011 Margin Credit Arrangement Letter No. CBG/2011-12/CMOG No 12/CBGMUM/;36536 dated September 22, 2011 Extent and Operation of the charge Amount secured facilities shall not exceed Rs. 12.50 billion (Previous secured amount not exceeding Rs. 7.25 billion). The current assets have been hypothecated as and by way of first pari passu with charge created in favour of ICICI Bank as stated in Third supplemental deed of hypothecation – WCF dated 23.09.2011
Short particulars of the property or asset(s) charged (including complete address and location of the property)	Company’s stock and book debts located at its factory, offices or any other premises.
Date of instrument modifying the charge	19.05.2011
Particulars of the present modification	Working capital facility enhanced from Rs. 7.25 billion to Rs. 12.50 billion as stated in Thrid supplemental Facility Agreement Dated 23.09.2011 and Third supplemental Deed of Hypothecation – WCF dated 23.09.2011

Fixed Assets:

· Plant and Machinery

· Furniture and Fixtures

· Motor Vehicles

· Electric Equipments

· Air Conditioners

· Tools, Jigs and Fixtures

· Office Equipments

· Computer

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.49.37
UK Pound	1	Rs.78.50
Euro	1	Rs.67.59

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	4
--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		42

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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