MIRA INFORM REPORT

Report Date :

13.09.2011

IDENTIFICATION DETAILS

Name :	KIRLOSKAR FERROUS INDUSTRIES LIMITED
Registered Office :	13 Laxmanrao Kirloskar Road, Khadki, Pune 411003, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	10.09.1991
Com. Reg. No.:	063223
Capital Investment / Paid-up Capital :	Rs.686.540 millions
CIN No.: [Company Identification No.]	L27101PN1991PLC063223
Legal Form :	Public Limited Liability Company. The company shares are listed on the Stock Exchange.
Line of Business :	Manufacturer of Industrial Castings of Non-Malleable Cast Iron
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

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

Maximum Credit Limit :	USD 14362280
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well established and reputed company having satisfactory track. The relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. 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.

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 :	13 Laxmanrao Kirloskar Road, Khadki, Pune 411003, Maharashtra, India
Tel. No.:	91-20-25810341
Fax No.:	91-20-25813208 / 25810209
E-Mail :	c.panicker@kirloskar.com
Website :	www.kirloskar.com
Factory 1 :	Bevinahalli Village, P.O.Hitnal, Taluka and Dist. Koppal, Karnataka - 583 234, Tamilnadu, India
Tel. No.:	91-8539-286711 / 286715 / 286715 / 286762 / 286767
Fax No.:	91-8539 – 286706 / 286714
Factory 2 :	Hotgi Road, Shivashahi, Solapur 413 224, Maharashtra, India
Tel. No.:	91-217-2600211 / 12 / 13 / 14 / 15
Fax No.:	91-217-2600220

DIRECTORS

AS ON 31.03.2011

Name :	Mr. Sanjay C. Kirloskar
Designation :	Director
Name :	Mr. R. V. Gumaste
Designation :	Director
Name :	Mr. A. R. Jamenis
Designation :	Director
Name :	Mr. C. V. Tikekar
Designation :	Director
Name :	Mr. S. N. Inamdar
Designation :	Director
Name :	Mr. S. G. Chitnis
Designation :	Director
Name :	Mr. A. N. Alawani
Designation :	Director

KEY EXECUTIVES

Name :	Mr. C S Panicker
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.06.2011

Category of Shareholder	Total No. of Shares	% of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	9,139,327	6.66
Bodies Corporate	71,802,543	52.29
Sub Total	80,941,870	58.95
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	80,941,870	58.95
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	6,750,405	4.92
Financial Institutions / Banks	3,565,500	2.60
Insurance Companies	4,000	-
Foreign Institutional Investors	48,100	0.04
Sub Total	10,368,005	7.55
(2) Non-Institutions
Bodies Corporate	5,887,642	4.29
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	26,667,774	19.42
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	11,508,339	8.38
Any Others (Specify)	1,934,451	1.41
Non Resident Indians	1,466,488	1.07
Clearing Members	313,963	0.23
Directors & their Relatives & Friends	152,600	0.11
Hindu Undivided Families	700	-
Trusts	700	-
Sub Total	45,998,206	33.50
Total Public shareholding (B)	56,366,211	41.05
Total (A)+(B)	137,308,081	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)	137,308,081	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Industrial Castings of Non-Malleable Cast Iron

Products :

Product Description	ITC Code
Non Alloy Pig Iron containing by weight 0.5% or less of Phosphorous.	72011000
Industrial Castings of non-malleable cast iron	73251000

PRODUCTION STATUS

AS ON 31.03.2011

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Liquid metal for Pig Iron
- Consumed in Foundry	MT	--	--	27440
- Consumed for manufacture of Pig Iron*	MT	--	360000	279825
Castings	MT	120000	102000	60176

* Includes 5,891 MT for internal consumption (previous year 5,219 MT)

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· Bank of Maharashtra

· Axis Bank Limited

· ING Vysya Bank Limited

· HDFC Bank Limited

· Canara Bank

· Corporation Bank

· The Hongkong and Shanghai Banking Corporation Limited

Facilities :

Rs. In Millions

SECURED LOAN	31.03.2011	31.03.2010
Term Loans from Banks	0.000	62.857
Cash Credit from Banks	0.000	0.000
Total	0.000	62.857

Banking Relations :	--
Auditors :
Name :	P G Bhagwat Chartered Accountant
Associates/Subsidiaries :	Kirloskar Industries Limited

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
210000000	Equity Shares	Rs. 5 each	Rs.1050.000 millions
117000000	Preference Shares	Rs. 10 each	Rs.1170.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
137308081	Equity Shares	Rs. 5 each	Rs.686.540 millions

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		686.540	686.486	686.472
2] Convertible Warrant Application Money		0.000	0.299	0.006
3] Reserves & Surplus		2904.030	2578.965	2286.556
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		3590.570	3265.750	2973.034
LOAN FUNDS
1] Secured Loans		0.000	62.857	188.571
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	62.857	188.571
DEFERRED TAX LIABILITIES		379.681	319.113	315.017
TOTAL		3970.251	3647.720	3476.622
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2888.247	2806.870	2654.532
Capital work-in-progress		702.722	575.859	634.149
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1628.204	1427.048	576.625
	Sundry Debtors	1346.776	889.480	691.951
	Cash & Bank Balances	184.358	166.602	126.761
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	332.184	364.156	405.055
Total Current Assets		3491.522	2847.286	1800.392
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	2802.183	2203.914	1369.748
	Other Current Liabilities	37.858	68.769	69.996
	Provisions	272.199	309.612	172.707
Total Current Liabilities		3112.240	2582.295	1612.451
Net Current Assets		379.282	264.991	187.941
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		3970.251	3647.720	3476.622

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Sales	10891.172	8069.868	6991.393
		Other Income	46.215	102.271	50.868
		TOTAL (A)	10937.387	8172.139	7042.261
Less	EXPENSES
		Cost of Materials	8548.168	5790.990	5254.587
		Employees Remuneration	330.556	327.716	306.523
		Administrative Expenses	1031.856	1029.764	929.726
		TOTAL (B)	9910.580	7148.470	6490.836
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		1026.807	1023.669	551.425
Less	FINANCIAL EXPENSES (D)		38.111	60.593	117.274
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		988.696	963.076	434.151
Less/ Add	DEPRECIATION/ AMORTISATION (F)		270.444	259.645	230.401
	PROFIT BEFORE TAX (E-F) (G)		718.252	703.431	203.750
Less	TAX (H)		234.958	212.752	124.263
	PROFIT AFTER TAX (G-H) (I)		483.294	490.679	79.487
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		540.908	298.584	337.138
Less	APPROPRIATIONS
		Transfer to General Reserve	50.000	50.000	0.000
		Excess Provision for Dividend Written Back	(64.481)	(32.246)	0.000
		Excess Provision for Tax on Dividend Written Back	(11.488)	(5.480)	0.000
		Dividend	201.787	201.787	100.893
		Tax on Dividend	32.734	34.294	17.148
	BALANCE CARRIED TO THE B/S		815.650	540.908	298.584
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	15.341	303.057	256.208
	IMPORTS
		Raw Materials	3461.598	2223.909	925.616
		Stores & Spares	7.472	3.925	8.293
		Capital Goods	6.161	38.910	587.746
	TOTAL IMPORTS		3475.231	2266.744	1521.655
	Earnings Per Share (Rs.)		3.52	3.57	0.58

QUARTERLY RESULTS

PARTICULARS	30.06.2011
	1^st Quarter
Net Sales	2651.500
Total Expenditure	2370.300
PBIDT (Excl OI)	281.200
Other Income	3.700
Operating Profit	284.900
Interest	15.000
Exceptional Items	0.000
PBDT	269.900
Depreciation	68.800
Profit Before Tax	201.100
Tax	66.600
Provisions and contingencies	0.000
Profit After Tax	134.500
Extraordinary Items	0.000
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	134.500

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	4.41	6.00	1.12
Net Profit Margin (PBT/Sales)	(%)	6.59	8.71	2.91
Return on Total Assets (PBT/Total Assets}	(%)	11.25	12.44	4.57
Return on Investment (ROI) (PBT/Networth)		0.20	0.21	0.06
Debt Equity Ratio (Total Liability/Networth)		0.97	0.90	0.71
Current Ratio (Current Asset/Current Liability)		1.12	1.10	1.11

LOCAL AGENCY FURTHER INFORMATION

PROFILE:

Subject is an India-based company. The Company operates in one segment, the iron castings. The Company’s products include non alloy pig iron, industrial castings of non-malleable cast iron and industrial castings of other cast articles of iron or steel. Kirloskar Ferrous Industries Limited’s plants are located in Koppal, Karnataka, and Solapur, Maharashtra, respectively. For the nine months ended 31 December 2010, Kirloskar Ferrous Industries Limited's revenue increased 43% to RS7.91B. Net income decreased 28% to RS270.1M. Revenue reflects an increase in sales and higher other income. Net income was offset by an increase in consumption of raw materials, higher employees cost, increased depreciation charges, lower gain from stock in trade and a rise in other expenditure.

MANAGEMENT DISCUSSION AND ANALYSIS

A. Economy and Industry Overview

The global scenario presents a mixed picture. While growth in emerging market economies (EMEs) remains strong, that in the US and the Euro area is clearly gaining momentum. However, the sharp increase in oil prices as a result of the turmoil in the Middle East and North Africa is adding uncertainty to the pace of global recovery. Further, coming on top of already elevated food and other commodity prices, the spike in oil prices has engendered inflation concerns. During the year under review, the Indian Economy recorded a growth of around 8.5 percent as compared to 7.2 percent in the earlier year. Further it is expected that the growth for 2011-12 to be in the range of 8.75 percent to 9.25 percent in 2011-12. The domestic automobile industry has grown over 28 percent in first 10 months or so of this financial year, compared with the same period in 2009-10. Exports also grew by over 31 percent during the period April to December 2010. The tractor industry witnessed a strong recovery during 2009-10, after a period of cyclical downturn. This momentum continued in the current fiscal with the April to December 2010 (nine months 2010-11) period reporting a growth of 25.2 percent over the corresponding previous year. The key factors enabling the demand growth during the current fiscal have been good monsoons resulting in robust farm sector growth, strong rural liquidity sustained by higher minimum support price, adequate credit availability and replacement demand. These factors apart, non-agricultural usage of tractors for haulage in construction and infrastructure projects continued to increase, benefiting tractor segment demand. On the Iron and Steel front, the crude steel production in India reached a level of 60.79 million tones during April to February 2011 as against 59.167 million tonnes for the previous year, helped by the demand from automobiles, roads and housing sector. India is the fourth largest producer of steel in the world. India's iron ore exports declined from 117.37 million tonnes during 2009-10 to 75.11 million tonnes, exported during April – January 2011 due to the export ban imposed by Karnataka State Government to curb illegal mining activities. However, inspite of the ban on iron ore exports, the price of iron ore in the domestic market continued to rise. China's contribution to trade of coke has dropped drastically over the past two years. In 2008, China accounted for about 60 percent of global coke exports. With high domestic coke consumption as well as on account of levy of tax on export of coke, there has been very less export of coke from China and currently, it has become a net importer. This has created a severe shortfall of the commodity in the global market. Moreover, with blast furnaces restarting the world over, the demand is set to increase further. These factors could result in further steep increase in the price of coke in the global market. During the year under review, coke was mainly imported from countries other than China. Crude oil prices are on an increasing trend presently touching around U.S. $ 112 per barrel. Also with Libyan and Middle East crisis, the chances of them escalating further are higher. India imports 80 percent of its crude oil requirements. FOB prices of pig iron in the international market have been low as compared to price prevailing in the domestic market resulting in very less export of pig iron during the year. The rupee started appreciating against the dollar by the end of the financial year giving some relief to the importers, who depend on crude oil, metals and other raw materials for their operations. Inflation has been a cause of worry and to control the same, RBI has taken measures, inter-alia, by increasing the repo and reverse repo rates at intervals during the year. This has resulted in increase in the lending rates of commercial banks.

Company Performance

The Company achieved net sales of Rs. 10,891 million (previous year Rs. 8,069 million), resulting in an increase in sales by 35 percent over the previous year. The sales value increased as compared to the previous year due to increase in sale volumes of both pig iron and castings. There has been a volume growth in sale of castings by 16 percent and that of pig iron by 12 percent. The profit before tax for the year under review stood at Rs.718.86 million as compared to Rs. 702.63 million of the previous year after providing for depreciation and amortization. The Company was able to pass on the increase in the input prices to the customers, except for the second quarter wherein the increase in the input material prices and pig iron realisation price did not go up in the same proportion and this resulted in lower profitability in the said quarter and the impact of the same in the profit for the year. During the year under review, 4.5 MW power plant was commissioned in July 2010 at its plant in Koppal, Karnataka. This has resulted in bringing down the power cost.

The Sinter Plant Project is progressing and is expected to be commissioned in second quarter of FY 2011-12. High Pressure Moulding Line, which was installed at Solapur plant in 2008, has achieved 80 percent of the capacity utilization during the year. Castings manufactured on this high pressure moulding line have met with customers' expectations. On the financial front, the Company was able to negotiate the interest rate at a competitive rate on the usance interest in respect of the procurement of coke. Further to the information about the iron ore mines mentioned in the Annual Report 2009-2010, the matter is subjudice as on date.

The Company has received the following awards :

1. “Outstanding performance award 2010” from Mahindra and Mahindra Limited.

2. “Panchratna special award 2010” from Mahindra and Mahindra Limited.

3. “Casting Weight Reduction Performance Award” from Kirloskar Oil Engines Limited.

4. “Strong Commitment to Excel” on the journey towards the Business Excellence from CII – Exim Bank Award.

Operational Performance

During the year under review, the Company sold 258,773 MT of pig iron valued at Rs.6,470 million as compared to 226,507 MT of pig iron valued at Rs. 4,342 million in the previous year and 57,392 MT castings aggregating to Rs.3,636 million as compared to 49,545 MT castings aggregating to Rs. 2,619 million in the previous year. The prices of iron ore continued to increase throughout the year. The prices increased from a level of Rs. 2,972 per MT at the beginning of the year to around Rs. 4,250 per MT by the end of the year. This has been on account of shortage of iron ore in the domestic market arising from the closure of mines due to compliance related issues and due to restriction on issue of permits by Government Department. The coke prices continued to increase throughout the year. The coke price which was at level of Rs.17,700 rose to a level of Rs.20,850 by the end of the year.

PRESS RELEASE

HT Columnists (India and Pakistan)
26 August 2011

New Delhi, Aug. 26 -- The blanket iron ore mining ban imposed in Karnataka's Bellary district one month ago was extended to Tumkur and Chitradurga districts by the Supreme Court (SC) on Friday.

The move is likely to further squeeze steel production and also stoke another round of price hikes as companies obtain iron ore from alternative sources.

The court passed the order in a public interest hearing where the Central Empowered Committee (CEC) submitted a report that said the environmental degradation in Tumkur and Chitradurga had gone too far, similar to the Bellary district. CEC is a fact-finding body appointed by the court to assist it in environmental cases.

Steel manufacturers told the court they would have to shut down their plants in the next four-five days if the ban was imposed, as they were unable to keep their blast furnaces running.

"Two factories are already closed. The remaining are operating at 40% capacity. The furnaces need to be kept going at full capacity. We need iron ore above 60 Fe grade (high grade)," senior counsel K.K. Venugopal said on behalf of an iron and steel manufacturers association.

He said steel makers in the region needed 2.2 million tonnes (mt) of iron ore per month in order to meet production demands and that it would take them weeks to revive their blast furnaces.

The court's forest bench, comprising Chief Justice S.H. Kapadia and justices Aftab Alam and K.S. Radhakrishnan, fended off strong arguments by a battery of senior lawyers, who were all appearing for mining companies and steel producers.

"Ultimately we have to balance (the) economy, development on one side, with environment on the other side. We understand the problems. You can't say let the environmental degradation go on, but you can't stop our industry from functioning," the court said as it passed the ban order.

"We will go by Article 21 (right to life). We are not going by ordinary law. According to us, Article 21 is a higher right (in comparison to the right to do business)."

The ban in Karnataka is a pointer to the higher procurement cost of iron ore, already costly owing to global shortages, and it could cascade down to the user industry, steel industry members said.

"We have about eight days' inventory left," said R.V. Gumaste, managing director of Kirloskar Ferrous Industries Ltd, which produces 50,000 tonnes of grey iron castings a year from its plant in Koppal district, where one of its two blast furnaces was closed three months ago.

The company's castings are used by at least 15 automobile and tractor makers, including Eicher Motors Ltd, the Escorts Group, Tata Motors Ltd, Daimler and Volvo, who would not take any supply cut-off, Gumaste said .

"Chitradurga and Tumkur were our last ray of hope. Now we have to look out of the state for a supply, but that has logistics issues and pricing issues," he added.

The court said it will release iron ore from an existing stock of 25 mt, which CEC compiled from assessing inventories of all the miners in the area.

The court asked the miners and steel makers to meet with amicus curiae Shyam Divan, who is assisting the court in this case, and with India's attorney general Goolam E. Vahanvati, who is representing the ministry of environment and forests, and with officials of CEC to decide what amount of iron ore is needed to be released immediately in order to ensure that steel production does not suffer.

"We are ourselves aware of the economic problem. You sit with the AG (attorney general) and others-we are prepared to release 25 mt. We have to put some pressure. Otherwise things will not change," the court said.

"Today we want to work out if the steel industry's needs can be met with the existing stock of 25 mt," the court said. It also reassured the industry that it was trying to expedite the process of assessing the environmental damage in the area, along with a rehabilitation plan.

"Don't treat this matter as adversarial. We are all interested in environment. We are all interested in economy and development. We have to balance them," the court told the miners.

Vahanvati and Divan are to submit their assessment to the court at a hearing next Friday.

The court also directed the Indian Council of Forestry Research and Education to extend its macro-environmental impact assessment from Bellary district to Tumkur and Chitradurga as well. The court had directed the environmental impact assessment to be performed on 5 August.

It also directed the joint team of CEC and officials from the Karnataka government to survey and demarcate all the mining leases in all three districts. "Get us the rehabilitation plan and things will work out," said Chief Justice Kapadia.

Iron ore that might be sold to steel companies from existing stocks will be only for steel makers in the region, who will have to pay a 10% royalty on the market price. CEC has been directed to maintain accounts of the iron ore sale as well as royalty payments. The court said it intends to use the royalty separately for rehabilitation of the degraded area.

Steel secretary P.K. Misra told reporters on the sidelines of a function in New Delhi that NMDC Ltd will be able to step up its iron ore output in a couple of months to 1 million tonne a month, which could provide a relief to the companies. "Companies should be able to stabilize very soon," Misra said. Published by HT Syndication with permission from HT Columnists.

FIXED ASSETS:

· Computer Software

· Freehold Land

· Leasehold Land

· Mining Rights

· Buildings

· Plant and Machinery

· Furniture and Fixtures

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.46.97
UK Pound	1	Rs.74.22
Euro	1	Rs.63.66

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	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		50

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.