MIRA INFORM REPORT

Report Date :

26.11.2011

IDENTIFICATION DETAILS

Name :	L G BALAKRISHNAN AND BROS LIMITED
Registered Office :	6/16/13, Krishnarayapuram Road, Ganapathy, Coimbatore-641006, Tamilnadu
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	24.03.1956
Com. Reg. No.:	18-000257
Capital Investment / Paid-up Capital :	Rs.78.481 Millions
CIN No.: [Company Identification No.]	L29191TZ1956PLC000257
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer of Automotive and Industrial Chains.
No. of Employees :	3000 [Approximately]

RATING & COMMENTS

MIRA’s Rating :

A (65)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 7800000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. 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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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 DETAILS]

Name :	Ms. Geeta
Designation :	Accountant
Contact No.:	91-422-3911130
Name :	Mr. Kannan
Designation :	Accountant
Date :	23.11.2011

LOCATIONS

Registered Office :	6/16/13, Krishnarayapuram Road, Ganapathy, Coimbatore-641006, Tamilnadu, India
Tel. No.:	91-422-2532325
Fax No.:	91-422-2532333
E-Mail :	r.kanna@lgb.co.in info@lgb.co.in
Website :	http://www.lgb.co.in
Location :	Owned
Factory :	Coimbatore Krishnarayapuram Road, Ganapathy Post, Coimbatore - 641006, Tamilnadu, India Annur Ganesapuram, Kattampatti Post, Annur, Coimbatore – 641107, Tamilnadu, India Mysore 24, Industrial Suburb, III Stage, Mysore South, Mysore – 570008, Tamilnadu, India Vaiyampalayam Kottaipalayam Post, Coimbatore – 641110, Tamilnadu, India Waluj B – 49, MIDC, Waluj – 431133, Aurangabad, Maharashtra, India Chinnavedampatti No.SF513, Bharthiyar Street, Chinnavedampatti, Ganapathy Post Coimbatore, Tamilnadu, India Karur Mochakottampalayam, Viswanathapuri Post, Karur – 639002, Tamilnadu, India Gurgaon Block B 6/21/2 Begampur, Khtola N H No.8, Gurgaon, Haryana, India Chakan Gat No.610/611, Chakan Talegaon Road, Mahalunge (Ingle) Talkhed, Chakan Pune – 410501, Maharashtra, India Uttarakhand Plot no.16, Sector 9, 11E, Sidul, Pantnagar, District Udham Singh – 263193, Uttarakhand, India Sengalipalayam 2/22 Sengalipalayam, N G G O Colony Post Coimbatore – 641022, Tamilnadu, India Bangalore A-4, Bommasandra Industrial Area, Anekal Taluka, Bangalore – 560009, Karnataka, India Mysore Plot No.80/81 K R S Road, Metagalli Post, Mysore – 570016, Karnataka, India Pongalur Sathy Road, Pongular Post, Coimbatore – 638459, Tamilnadu, India Kondayampalayam Pillayar Koil Street, Near Power House, Kottaipalayam Post, Coimbatore – 641110, Tamilnadu, India Pillaippanpalayam Village Kumarapalayam Post, Coimbatore – 641653, Tamilnadu, India

DIRECTORS

As on 31.03.2011

Name :	Mr. B. Vijayakumar
Designation :	Chairman Cum Managing Director
Name :	Mr. P. Prabakaran
Designation :	Executive Director
Name :	Mr. S. Sivakumar
Designation :	Executive Director
Name :	Mr. V. Govindarajulu
Designation :	Executive Director
Name :	Mr. P. Shanmugasundaram
Designation :	Executive Director
Name :	Mrs. Rajsri Vijayakumar
Designation :	Executive Director
Name :	Mr. V. Rajvirdhan
Designation :	Executive Director
Name :	Dr. T. Balaji
Designation :	Executive Director
Name :	Mr. R. Vidhya Shankar
Designation :	Executive Director

KEY EXECUTIVES

Name :	Mr. N. Rengaraj
Designation :	Chief Financial Officer
Name :	Mr. M. Lakshmi Kanth Joshi
Designation :	General Manager cum Company Secretary
Name :	Ms. Geeta
Designation :	Accountant
Name :	Mr. Kannan
Designation :	Accountant

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2011

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	2,531,959	32.26
Bodies Corporate	1,054,998	13.44
Sub Total	3,586,957	45.70
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	3,586,957	45.70
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	1,602	0.02
Foreign Institutional Investors	594,713	7.58
Sub Total	596,315	7.60
(2) Non-Institutions
Bodies Corporate	346,111	4.41
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	2,321,625	29.58
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	810,526	10.33
Any Others (Specify)	186,570	2.38
NRIs/OCBs	30,932	0.39
Clearing Members	1,470	0.02
Directors & their Relatives & Friends	47,440	0.60
Hindu Undivided Families	106,328	1.35
Trusts	400	0.01
Sub Total	3,664,832	46.70
Total Public shareholding (B)	4,261,147	54.30
Total (A)+(B)	7,848,104	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)	7,848,104	-

BUSINESS DETAILS

Line of Business :

Manufacturer of Automotive and Industrial Chains.

Products :

Product Description	Item Code
Chains	731511.00
Rubber Belt	401019.00
Fine Blanking	844851.90
Sprocket	871493.00

Exports :

Products :

Industrial Chains

Countries :

· USA

· Japan

Terms :

Selling :

L/C / Cash and Credit

Purchasing :

L/C / Cash and Credit

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Installed Capacity @	Actual Production
Automotive chains	Nos.	36000000	21899000
Fine blanked products	Strokes.	74136000	55785000
Rubber Belts	Nos.	1800000	713000
Bosch components	Nos.	1560000	1266000

Note: @ Installed Capacity is as certified by the management.

GENERAL INFORMATION

Suppliers :

· Bajaj

Customers :

Wholesalers and Retailers

· TVS Motors

No. of Employees :

3000 [Approximately]

Bankers :

· Andhra Bank

· Axis Bank Limited

· BNP Paribas

· Corporation Bank

· HDFC Bank Limited

· Indus-Ind Bank Limited

· ICICI Bank Limited

· IDBI Bank Limited

· The Bank of Nova Scotia

· Union Bank of India

Facilities :

Secured Loan	As on 31.03.2011 [Rs. in Millions]	As on 31.03.2010 [Rs. in Millions]
Long Term Loans
From Banks [Repayment within 1 year - Rs.225.714 Millions] [Previous year Rs.50.000 Millions]	922.143	1000.000
From Institutions	1.722	1.722
Working Capital Loan From Banks	147.863	15.800
Total	1071.728	1017.522
Unsecured Loan
From :
Directors	9.500	11.100
Others	25.000	28.000
Fixed Deposits [Rs.18.900 Millions repayable within one year.] [Previous year Rs.1.354 Millions]	59.845	12.599
Total	94.345	51.699

Banking Relations :	-
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Associates:	· Elgi Automotive Services (Private) Limited · L.G.B. Auto Products (Private) Limited · LG Farm Products (Private) Limited · L.G. Balakrishnan and Bros – Karur · LG Sports Limited · Super Speeds Private Limited · Super Transports Private Limited · Silent Chain India Private Limited · LGB Fuel System Private Limited · LGB Forge Limited · Rolon Fine Blank Limited · LGB Rolon Chain Limited · Vijayshree Spinning Mills Private Limited · Renold Chain India Private Limited · South Western Engineering India Limited
Wholly Owned Subsidiary:	BCW V Tech India Private Limited

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
12000000	Equity Shares	Rs.10/- each	Rs.120.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
7848104	Equity Shares	Rs.10/- each	Rs.78.481 Millions

Note: Of the above 60,14,306 Equity Shares of Rs.10/- each (Previous Year 60,14,306 Equity Shares of Rs.10/- each) has been issued as fully paid up Bonus Shares by Capitalization of Reserves.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		78.481	78.481	78.481
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1889.572	1522.735	1337.925
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1968.053	1601.216	1416.406
LOAN FUNDS
1] Secured Loans		1071.728	1017.522	1498.321
2] Unsecured Loans		94.345	51.699	17.079
TOTAL BORROWING		1166.073	1069.221	1515.400
DEFERRED TAX LIABILITIES		186.749	266.039	160.719
TOTAL		3320.875	2936.476	3092.525
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1871.464	1475.530	1538.079
Capital work-in-progress		44.325	32.853	39.459
INVESTMENT		165.063	122.493	96.684
DEFERREX TAX ASSETS		0.000	0.000	0.000
FOREIGN CURRENCY MONETARY ITEM TRANSLATION DIFFERENCE ACCOUNT		0.000	24.225	52.514
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1529.132	1222.389	1088.692
	Sundry Debtors	821.836	783.073	757.883
	Cash & Bank Balances	48.215	46.387	376.379
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	272.462	278.037	316.745
Total Current Assets		2671.645	2329.886	2539.699
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1266.784	947.666	887.169
	Other Current Liabilities	73.625	41.360	227.649
	Provisions	91.213	59.485	59.092
Total Current Liabilities		1431.622	1048.511	1173.910
Net Current Assets		1240.023	1281.375	1365.789
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		3320.875	2936.476	3092.525

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	7095.204	5523.790	5076.009
		Other Income	22.966	55.412	54.890
		TOTAL (A)	7118.170	5579.202	5130.899
Less	EXPENSES
		Consumption of Materials	3667.172	2816.337	2610.830
		Employees’ Cost	657.768	452.122	452.802
		Other Expenses	1913.773	1520.270	1469.707
		Exceptional Items	0.000	0.000	(306.447)
		TOTAL (B)	6238.713	4788.729	4226.892
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		879.457	790.473	904.007
Less	FINANCIAL EXPENSES (D)		152.042	205.870	246.935
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		727.415	584.603	657.072
Less/ Add	DEPRECIATION/ AMORTISATION (F)		254.457	217.149	206.910
	PROFIT BEFORE TAX (E-F) (G)		472.958	367.454	450.162
Less	TAX (H)		14.908	119.103	58.730
	PROFIT AFTER TAX (G-H) (I)		458.050	248.351	391.432
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		148.783	113.973	315.314
Less	APPROPRIATIONS
		Transfer to General Reserve	300.000	154.055	537.681
		Proposed Dividend	78.481	51.013	47.089
		Tax on Dividend	12.732	8.473	8.003
	BALANCE CARRIED TO THE B/S		215.620	148.783	113.973
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	478.443	470.073	610.264
	TOTAL EARNINGS		478.443	470.073	610.264
	IMPORTS
		Raw Materials	660.485	290.354	179.784
		Stores & Spares	39.806	13.456	26.696
		Capital Goods	243.355	11.912	163.222
	TOTAL IMPORTS		943.646	315.722	369.702
	Earnings Per Share (Rs.)		58.36	31.64	49.87

Expected Sales (2011-12) : Rs.8500.000 Millions.

The above information has been parted by Ms. Geeta and Mr. Kannan.

QUARTERLY RESULTS

PARTICULARS	30.06.2011	30.09.2011
Type	1^st Quarter	2^nd Quarter
Net Sales	2097.740	2368.540
Total Expenditure	1841.590	2051.420
PBIDT (Excl OI)	256.150	317.120
Other Income	3.960	5.880
Operating Profit	260.110	323.000
Interest	38.580	45.710
PBDT	221.530	277.290
Depreciation	67.390	69.960
Profit Before Tax	154.140	207.330
Tax	34.460	59.170
Profit After Tax	119.680	148.160
Net Profit	119.680	148.160

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	6.43	4.45	7.63
Net Profit Margin (PBT/Sales)	(%)	6.66	6.65	8.87
Return on Total Assets (PBT/Total Assets}	(%)	10.41	9.66	11.04
Return on Investment (ROI) (PBT/Networth)		0.24	0.23	0.32
Debt Equity Ratio (Total Liability/Networth)		1.32	1.32	1.90
Current Ratio (Current Asset/Current Liability)		1.87	2.22	2.16

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1) Year of Establishment	Yes
2) Locality of the firm	Yes
3) Constitutions of the firm	Yes
4) Premises details	Yes
5) Type of Business	Yes
6) Line of Business	Yes
7) Promoter’s background	--
8) No. of employees	Yes
9) Name of person contacted	Yes
10) Designation of contact person	Yes
11) Turnover of firm for last two years	Yes
12) Profitability for last three years	No
13) Reasons for variation <> 20%	No
14) Estimation for coming financial year	Yes
15) Capital in the business	No
16) Details of sister concerns	Yes
17) Major suppliers	Yes
18) Major customers	Yes
19) Payments terms	Yes
20) Export / Import details (if applicable)	Yes
21) Market information	--
22) Litigations that the firm / promoter involved in	--
23) Banking Details	Yes
24) Banking facility details	Yes
25) Conduct of the banking account	--
26) Buyer visit details	--
27) Financials, if provided	No
28) Incorporation details, if applicable	--
29) Last accounts filed at ROC	--
30) Major Shareholders, if available	--

PERFORMANCE AND OPERATIONS

The Automotive market is buoyant and the demand for the Company’s products have been good. They expect this demand not only to continue but also to increase. Accordingly the Company has invested almost Rs.672.700 Millions in the last financial year and has plans to invest a further sum of Rs.350.000 Millions in the current fiscal.

These investments have been made for a) Capacity increase b) Quality improvements c) Automation and as well as d) Productivity improvements.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENT

India, being Country of the world’s fastest growing automobile industries, provides a solid growth platform for auto component industry. The industry currently has 600 organized companies, which account for 77% of value added in the industry. The medium and large firms in the organized sector provide direct employment to 2.5 crores people in the Country.

OPPORTUNITIES

The Company is pre-dominantly automotive and is ideally placed to take advantage of the growing automotive activities in the country. With the concentration on quality and being customer centric, their Company is the preferred supplier in most areas of their production range. This place them in unique position to participate in all new products requirements.

AUDITED FINANCIAL RESULTS FOR THE QUARTER / HALF YEAR ENDED 30.09.2011

Rs. in Millions

PARTICULAR	QUARTER ENDED	HALF YEAR ENDED
	STANDALONE
	30.09.2011	30.09.2011
(a) Net Sales / Income from operations	2368.542	4466.278
(b) Other Operating Income	0.000	0.000
Total Income	2368.542	4466.278
Expenditure
a) (Increase) / Decrease in stock in trade and work in progress	(188.422)	(230.702)
b) Consumption of raw materials	1072.404	1972.924
c) Purchase of traded goods	371.741	642.229
d) Employees cost	206.322	395.450
e) Depreciation	69.965	137.355
f) Other expenditure	589.377	1113.104
Total	2121.387	4030.360
Profit from operations before other income, interest and exceptional Items	247.155	435.918
Other income	5.883	9.841
Profit before interest and exceptional Items	253.038	445.759
Interest	45.706	84.286
Profit after Interest but before Exceptional Items	207.332	361.473
Exceptional Items	--	--
Profit (+)/Loss(-) from Ordinary Activities before tax	207.332	361.473
Tax expense	59.173	93.631
Net Profit (+)/Loss(-) from Ordinary Activities after tax	148.159	267.842
Extraordinary items (Net of tax expenses)	--	--
Net Profit (+) / Loss (-) for the year period	148.159	267.842
Paid up equity share capital (Face value of Rs.10/- per share)	78.481	78.481
Reserves excluding revaluation reserves as per balance sheet of previous accounting year
Earnings 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)	18.88	34.13
(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)	18.88	34.13
Public shareholding
Number of shares	4261147	4261147
Percentage of shareholding	54.30	54.30
Promoters and Promoters group Shareholding-
a) Pledged /Encumbered
Number of shares	Nil	Nil
Percentage of shares (as a % of total shareholding of the promoter and promoter group)	Nil	Nil
Percentage of shares (as a % of total share capital of the company)	Nil	Nil
b) Non Encumbered
Number of shares	3586957	3586957
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)	45.70	45.70

SEGMENTWISE REVENUE, RESULTS AND CAPITAL EMPLOYED UNDER CLAUSE 41 OF THE LISTING AGREEMENT

Rs. in Millions

PARTICULAR	QUARTER ENDED	HALF YEAR ENDED
	STANDALONE
	30.09.2011	30.09.2011
SEGMENT REVENUE
NET SALE / INCOME FROM OPERATIONS
Transmission	1634.877	3082.309
Metal Forming	435.213	815.885
Other	298.452	568.084
Total	2368.542	4466.278
Less: Inter segment revenue	0.000	0.000
Net sales / income from operations	2368.542	4466.278
SEGMENT RESULTS
PROFIT / (LOSS) BEFORE TAX AND INTEREST
Transmission	204.909	357.895
Metal Forming	39.295	60.521
Other	8.834	27.343
Total	253.038	445.759
Less: i) Interest	45.706	84.286
ii) Other Unallocable expenditure net off	0.000	0.000
Add: iii) Unallocable income	0.000	0.000
Total profit / (Loss) before tax	207.332	361.473
CAPITAL EMPLOYED
Segment Assets – Segment Liabilities
Transmission	1635.745	1635.745
Metal Forming	1142.651	1142.651
Other	605.838	605.838
Total	3384.234	3384.234

DISCLOSURE OF BALANCE SHEET ITEM AS PER CLAUSE 41 OF THE LISTING AGREEMENT

	Rs in Millions
Particulars	Quarter ended
	As on 30.09.2011
	(Audited)
SHAREHOLDERS FUNDS
Share Capital	78.481
Reserves & Surplus	2160.414
LOAN FUNDS	1201.870
DEFERRED TAX LIABILITIES	180.779
TOTAL	3621.544
FIXED ASSETS	1956.010
INVESTMENT	165.063
CURRENT ASSETS, LOANS & ADVANCES
Inventories	1787.945
Sundry Debtors	1020.628
Cash & Bank Balances	64.827
Other Current Assets	0.000
Loans & Advances	634.919
Less : CURRENT LIABILITIES & PROVISIONS
Current Liabilities	1643.045
Provisions	364.803
Net Current Assets	1500.471
Miscellaneous expenditure (not written off or adjusted)	0.000
TOTAL	3621.544

NOTE:

1. The consolidated / standalone financial results of the company for the period ended 30^th September, 2011 have been reviewed by the audit committee and have been approved by the board of directors at its meeting held on 31^st October, 2011.

2. The consolidated results include the results of M/s. BCW V Tech India Private Limited, a wholly owned subsidiary company.

3. The consolidated / standalone financial results of the company for the period ended 30^th September, 2011 have been audited by the statutory auditors.

4. During the current quarter, no investor complaint was received and there was no investor complaint pending at the beginning or at the end of the quarter

5. Previous year / period figures have been regrouped / rearranged wherever necessary.

FIXED ASSETS:

• Land
• Building
• Motor Vehicles
• Plant and Machinery
• Furniture Electrical and Fittings
• Office Equipment

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 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.52.17
UK Pound	1	Rs.80.64
Euro	1	Rs.69.43

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	6
--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		65

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.