MIRA INFORM REPORT

Report Date :

20.04.2012

IDENTIFICATION DETAILS

Name :	KGK CREATIONS PRIVATE LIMITED
Registered Office :	Plot No. GJ-10, Seepz++(Sez), MIDC, Andheri (East), Mumbai – 400096, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	21.10.2004
Com. Reg. No.:	149191
Paid-up Capital :	Rs. 0.385 Million
CIN No.: [Company Identification No.]	U45200MH2004PTC149191
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer, Exporter and Supplier of Diamonds, Colored Gemstones and Jewelry
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (28)

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

Maximum Credit Limit :	59000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. The company has been successful in wiping off the accumulated losses of previous year. Trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some cautions.

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

LOCATIONS

Registered Office :	Plot No. GJ-10, Seepz++(Sez), MIDC, Andheri (East), Mumbai – 400096, Maharashtra, India
Tel. No.:	91-22-30833333/30828000
Fax No. :	91-22-28290724
E-Mail :	kgkbom@bom3.vsnl.net.in brajesh.kabra@kgkmail.com dhara.jain@kgkmail.com
Website :	www.kgkgroup.com
Location :	Owned

DIRECTORS

As On 29.09.2011

Name :	Mr. Shailesh Jain
Designation :	Director
Address :	B-1302 Ekta Meadow Near Khatau Mill Compound Borivali (East), Mumbai – 400066, Maharashtra, India
Date of Birth/Age :	10.08.1976
Date of Appointment :	22.01.2007
DIN No.:	00306931

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U36912MH1988PTC049022	UNIQUE DIAMONDS PRIVATE LIMITED	Director	26-08-02	26-08-02	Active	NO
2	U70101MH1985PTC035267	VIPKON PROPERTY DEVELOPMENT SERVICES PRIVATE LIMITED	Director	21-01-03	21-01-03	Active	NO
3	U36911MH1989PTC051647	RATNALAYA DIAMONDS PRIVATE LIMITED	Director	16-07-03	16-07-03	Active	NO
4	U45200MH2004PTC149191	KGK CREATIONS PRIVATE LIMITED	Director	22-01-07	22-01-07	Active	NO
5	U51900MH1991PTC060185	TRISHUL COMMERCIALS PRIVATE LIMITED	Director	30-09-11	24-11-10	Active	NO
6	U45201RJ2011PTC035451	DEEPAANGAN LAND DEVELOPERS PRIVATE LIMITED	Additional director	01-10-11	01-10-11	Active	NO
7	U70101MH2011PTC219215	FINE NINE DWELLINGS PRIVATE LIMITED	Director	10-10-11	10-10-11	Active	NO
8	U70101MH2011PTC219214	DECADES ESTATES PRIVATE LIMITED	Additional director	14-02-12	14-02-12	Active	NO

Name :	Mr. Rajendra Navrattanmal Kothari
Designation :	Director
Address :	Flat No D-703, Indrap Rastha Citylight Road, Surat – 395007, Gujarat, India
Date of Birth/Age :	09.11.1950
Date of Appointment :	22.01.2007
DIN No.:	00139789

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U36912MH1988PTC049022	UNIQUE DIAMONDS PRIVATE LIMITED	Director	04-07-01	04-07-01	Active	NO
2	U36911MH1989PTC051647	RATNALAYA DIAMONDS PRIVATE LIMITED	Director	05-09-02	05-09-02	Active	NO
3	U36911MH1989PTC051646	ALOK IMPEX PRIVATE LIMITED	Director	10-06-05	10-06-05	Active	NO
4	U45200MH2004PTC149191	KGK CREATIONS PRIVATE LIMITED	Director	22-01-07	22-01-07	Active	NO
5	U36911MH2007PTC171984	JEWEL STONE PRIVATE LIMITED	Additional director	25-04-11	25-04-11	Active	NO
6	U52393MH1999PTC121627	KOTHARI GEMS PRIVATE LIMITED	Additional director	25-04-11	25-04-11	Active	NO

Name :	Mr. Sanjay Navrattan Kothari
Designation :	Director
Address :	8-B, Robinson Garden Apartment3 Robinson Road MID Level, Hongkong
Date of Birth/Age :	07.09.1964
Date of Appointment :	28.10.2004
DIN No.:	00145447

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U45200MH2004PTC149191	KGK CREATIONS PRIVATE LIMITED	Director	28-10-04	28-10-04	Active	NO
2	U51900MH1984PTC032788	KGK DIAJEWELS PRIVATE LIMITED	Director	16-12-04	16-12-04	Active	NO
3	U01117RJ1996PTC013020	PINKCITY GARDENS PRIVATE LIMITED	Director	30-09-08	20-05-08	Active	NO
4	U45201RJ1996PTC012976	TANMAYA GARDENS PRIVATE LIMITED	Director	30-09-08	20-05-08	Active	NO
5	U55101RJ1997PTC013071	PANCHRATNA MOTELS AND RESORTS PRIVATE LIMITED	Director	29-09-08	20-05-08	Active	NO
6	U01119RJ1995PTC009381	PRERNA AGRICULTURAL FARMS PRIVATE LIMITED	Director	29-09-08	20-05-08	Active	NO
7	U45201RJ2001PTC017127	SUBAKO DEVELOPERS PRIVATE LIMITED	Director	29-09-08	20-05-08	Active	YES
8	U45200MH2008PTC183162	KGK REALTIES PRIVATE LIMITED	Director	04-06-08	04-06-08	Active	NO
9	U45201RJ2006PTC022962	SHRI KALYAN BUILDMART PRIVATE LIMITED	Additional director	06-07-11	06-07-11	Active	NO

Name :	Mr. Vishal Joginder Dhadda
Designation :	Director
Address :	No. 15, New No. 35, Thabiah Reddy St West, Mambalam, Chennai – 600003, Tamilnadu, India
Date of Birth/Age :	20.01.1978
Date of Appointment :	15.11.2008
DIN No.:	02328520

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U45200MH2004PTC149191	KGK CREATIONS PRIVATE LIMITED	Director	15-11-08	15-11-08	Active	NO
2	U36912MH1988PTC049022	UNIQUE DIAMONDS PRIVATE LIMITED	Director	01-12-08	01-12-08	Active	NO
3	U36910MH1990PTC054834	NAVRATNA GEMS PRIVATE LIMITED	Director	29-09-11	24-11-10	Active	NO
4	U45201RJ2011PTC036390	NAMOKAR BUILDESTATE PRIVATE LIMITED	Additional director	01-10-11	01-10-11	Active	NO
5	U70101MH2011PTC219215	FINE NINE DWELLINGS PRIVATE LIMITED	Director	10-10-11	10-10-11	Active	NO

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As On 29.09.2011

Names of Shareholders	No. of Shares
KGK Jewellery Mfg. Limited – 14F, Chevalior House, 45-51, Chatham Road, South Tst Kowloon, Hongkong	18500
Kothari Creations Private Limited, KGK Tower, 4^th Floor, Dutta Pada Road, Borivali (East), Mumbai - 400066, Maharashtra, India	19900
Navrattan Ghisilal Kothari, 401, Khatau Condominium, 15-A, J. Mehta Marg, Mumbai – 400006, Maharashtra, India	100
Total	38500

As On 29.09.2011

Equity Share Break up (Percentage of Total Equity)

Category	Percentage
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	48.05
Bodies Corporate	51.95
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer, Exporter and Supplier of Diamonds, Colored Gemstones and Jewelry

PRODUCTION STATUS

As on 31.03.2011

Licensed Capacity: Not Applicable

Installed Capacity: Not Applicable

Particulars	Unit	Actual Production
Ring	Pieces	18180
Pendant	Pieces	16657
Earrings	Pairs	11178
Bangles	Pieces	91
Bracelets	Pieces	434
Necklace	Pieces	691
Nose Pin	Pieces	13
Cufflinks	Pieces	119
Broach	Pieces	1
Chains	Pieces	28
Tie-Pin	Pieces	25

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

• ABN Amro Bank N.V – 74, Sakhar Bhavan, 7^th Floor, Nariman Point, Mumbai - 400021, Maharashtra, India

Facilities :

Secured Loans	31.03.2011 (Rs. In Millions)	31.03.2010 (Rs. In Millions)
Working Capital Loans from Bank :
Packing Credit Facility	99.031	98.807
Post Shipment Credit Facility	87.632	92.063
Total	186.663	190.870

Notes:

The above facilities are secured against :

1 The above facilities are secured against hypothecation of stock and book debts.

2 Post Shipment credit facility is secured against hypothecation of export documents and is also guaranteed by Director Sanjay Kotiiari by pledge of FCNR Deposit of $0.61 Million (P.Y. $0.61 Million)

(C.Y. Rs. 27.203 Millions and P.Y. Rs. 27.395 Millions)

3 Above loans are guaranteed by way of Corporate guarantee of KGK Diamonds (India) Private Limited, KGK Creations (India) Private Limited Unique Diamonds Private Limited and Sino charm Limited

4 Above loans are guaranteed by way of personal guarantee provided by the relatives of directors.

5 Above loans are secured against Equitable mortgage of property held by the relatives of directors.

Unsecured Loans	31.03.2011 (Rs. In Millions)	31.03.2010 (Rs. In Millions)
From Directors	0.000	4.744
From Shareholders		0
-External Commercial Borrowings	0.000	80.838
- Inter Corporate Loans	148.647	100.071
Total	148.647	185.653

Banking Relations :	--
Auditors :
Name :	Sudit K. Parekh and Company Chartered Accountants
Address :	2nd Floor, Ballard House, Adi Marzban Path, Ballard Pier, Fort, Mumbai – 400004, Maharashtra, India
Pan No.:	AAAFS4500P
Holding Company :	KGK Creation (India) Private Limited CIN No.: U70100MH1999PTC119578
Subsidiaries :	KGK Creations USA. Inc.
Related parties:	KGK Investment Company Private Limited KGK Gems Limited KGK Jewellery Mfg. Limited KGK Diamond and Jewellery LLC Kothari Jewels Private Limited Kothari Creations Private Limited KGK Jewellery INC (Japan) KGK Jewellery LLC KGK Diamonds India Private Limited KGK Diamonds (HK) Limited KGK Innovative Private Limited KGK Jewellery Private Limited Kothari Impex Private Limited

CAPITAL STRUCTURE

As On 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
1,000,000	Equity Shares	Rs. 10/- each	Rs. 10.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
38,500	Equity Shares	Rs. 10/- each	Rs. 0.385 Million

Note:

Of the above 20,000 (Previous year Nil) Equity Shares are held by KGK Creation (India) Private Limited the holding company and 18,500 (previous year 18,500) are held by KGK Jewellery Mfg. Limited, Hong Kong)

sFINANCIAL 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		0.385	0.385	0.250
2] Share Application Money		0.000	0.000	12.217
3] Reserves & Surplus		14.470	12.083	0.404
4] (Accumulated Losses)		0.000	(16.811)	0.000
NETWORTH		14.855	(4.343)	12.871
LOAN FUNDS
1] Secured Loans		186.663	190.870	176.645
2] Unsecured Loans		148.647	185.653	187.482
TOTAL BORROWING		335.310	376.523	364.127
DEFERRED TAX LIABILITIES		0.430	0.000	0.000
TOTAL		350.595	372.180	376.998
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		102.095	107.204	119.439
Capital work-in-progress		0.000	0.007	0.000
INVESTMENT		3.248	3.248	3.248
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	200.245	173.462	148.597
	Sundry Debtors	161.481	144.221	154.501
	Cash & Bank Balances	1.193	2.935	1.608
	Other Current Assets	1.970	1.863	11.323
	Loans & Advances	19.169	7.033	86.494
Total Current Assets		384.058	329.514	402.523
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	132.865	65.936	128.188
	Other Current Liabilities	4.562	0.289	18.714
	Provisions	1.379	1.568	1.310
Total Current Liabilities		138.806	67.793	148.212
Net Current Assets		245.252	261.721	254.311
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		350.595	372.180	376.998

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	454.869	353.231	282.624
		Other Income	4.820	14.094	2.224
		TOTAL (A)	459.689	367.325	284.848
Less	EXPENSES
		Raw Material Consumed	314.736	289.899	189.439
		Consumables Stores Consumed	6.750	5.525	4.484
		Manufacturing, Administrative & Other Expenses	95.265	71.013	100.068
		Increase/(Decrease) in stock	4.859	(4.253)	(37.829)
		TOTAL (B)	421.610	362.184	256.162
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		38.079	5.141	28.686
Less	FINANCIAL EXPENSES (D)		5.155	8.356	7.473
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		32.924	(3.215)	21.213
Less/ Add	DEPRECIATION/ AMORTISATION (F)		13.101	13.995	15.902
Add	Prior Period Adjustments		(0.134)	(0.004)	(0.078)
	PROFIT BEFORE TAX (E-F) (G)		19.689	(17.214)	5.233
Less	TAX (H)		0.491	0.000	0.152
	PROFIT AFTER TAX (G-H) (I)		19.198	(17.214)	5.081
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(16.811)	0.403	(4.677)
	BALANCE CARRIED TO THE B/S		2.387	(16.811)	0.404
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	456.799	350.199	282.623
	TOTAL EARNINGS		456.799	350.199	282.623
	IMPORTS
		Raw Materials	83.277	73.726	54.568
		Tools and Components	0.169	0.913	0.322
		Consumable	2.019	0.692	0.901
	TOTAL IMPORTS		85.465	74.418	55.791
	Earnings Per Share (Rs.)		498.66	(447.13)	203.00

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	4.18	(4.69)	1.78
Net Profit Margin (PBT/Sales)	(%)	4.33	(4.87)	1.85
Return on Total Assets (PBT/Total Assets}	(%)	4.05	(3.94)	1.00
Return on Investment (ROI) (PBT/Networth)		1.33	3.96	0.41
Debt Equity Ratio (Total Liability/Networth)		31.92	(102.31)	39.81
Current Ratio (Current Asset/Current Liability)		2.77	4.86	2.72

LOCAL AGENCY FURTHER INFORMATION

DIAMOND INDUSTRY – INDIA

- From time immemorial, India is well known in the world as the birthplace for diamonds.  It is difficult to trace the origin of diamonds but history says that in the remote past, diamonds were mined only in India. Diamond production in India can be traced back to almost 8^th Century B.C.  India, in fact, remained undisputed leader till 18^th Century when Brazilian fields were discovered in 1725 followed by emergence of S. Africa, Russia and Australia.

- The achievement of the Indian diamond industry was possible only due to combination of the manufacturing skills of the Indian workforce and the untiring and unflagging efforts of the Indian diamantaires, supported by progressive Government policies.

- The area of study of family owned diamond businesses derives its importance from the huge conglomerate of family run organizations which operate in the diamond industry since many generations.

- Some of the basic traits of family run business enterprises include spirit of entrepreneurship, mutual trust lowers transaction costs, small, nimble and quick to react, information as a source of advantage and philanthropy.

- Family owned diamond businesses need to improve on many fronts including higher standard of corporate governance, long-term performance – focused strategies, modern management and technology.

- The diamond jewellery industry in India today may be more than Rs 60000.000 millions and is rated amongst the fastest growing  in the world. Indi ranks third in the world in domestic diamond consumption.

- Utmost caution is to be exercised while dealing with some medium and large diamond traders which are usually engaged in fictitious import – export, inter-company transactions, financially assisted by banks. In the process, several public sector banks lost several hundred million rupees. They mostly diverted borrowed money for diamond business into real estate and capital markets.

- Excerpts from Times of India dated 30^th October 2010 is as under –

DIAMOND SAGA – DIRTY DOZEN STUCK WITH 2K CR DEBT

This could be the biggest credibility crisis the Indian diamond industry has ever faced. Fifteen banks run the risk of losing Rs 20000.000 Millions lent to a dozen diamond firms in Surat. Until about two months ago, they had not repaid  these dues. Bankers believe many diamantaires borrowed money during the economic downturn two years ago and diverted funds to businesses like real estate and capital markets. Many of themselves made money from these businesses but their diamond companies have gone sick and declared insolvency.

- Most of the money borrowed from the banks in the name of their diamond business has been diverted in real estate and the share market. The banks are not in a position to seize their properties because in many cases, these were purchased in the name of their relatives and friends.

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	Yes
8) No. of employees	No
9) Name of person contacted	No
10) Designation of contact person	No
11) Turnover of firm for last three years	Yes
12) Profitability for last three years	Yes
13) Reasons for variation <> 20%	--
14) Estimation for coming financial year	No
15) Capital in the business	Yes
16) Details of sister concerns	Yes
17) Major suppliers	No
18) Major customers	No
19) Payments terms	No
20) Export / Import details (if applicable)	No
21) Market information	--
22) Litigations that the firm / promoter	--
23) Banking Details	Yes
24) Banking facility details	Yes
25) Conduct of the banking account	--
26) Buyer visit details	--
27) Financials, if provided	Yes
28) Incorporation details, if applicable	Yes
29) Last accounts filed at ROC	Yes
30) Major Shareholders, if available	Yes

Contingent Liability:

(Rs. In Millions)

Particulars	31.03.2011	31.03.2010
In Respect of Guarantees provided to the Group Concerns	15.000	0.000

Bankers Charges Report as per Registry

This form is for

Creation of charge

Corporate identity number of the company

U45200MH2004PTC149191

Name of the company

KGK CREATIONS PRIVATE LIMITED

Address of the registered office or of the principal place of business in India of the company

PLOT NO.GJ-10, Seepz++(Sez),MIDC, Andheri (East), Mumbai – 400096 Maharashtra, India

Type of charge

Book Debts

Movable Property

Floating Charge

Particular of charge holder

Name :	ABN Amro Bank N.V
Address :	74, Sakhar Bhavan, 7^th Floor, Nariman Point, Mumbai - 400021, Maharashtra, India
Email :	reenabang@rediffmail.com

Nature of description of the instrument creating or modifying the charge

Deed of Hypothecation of Movable Assets

Date of instrument Creating the charge

03.10.2007

Amount secured by the charge

Rs. 200.000 Millions

Brief particulars of the principal terms an conditions and extent and operation of the charge

Rate of Interest –

Export Post Finance (PSC) - Rs.200.000 millions - Interest - As per RBI guidelines

Export Pre Finance (EPC) sub limit of PSC - Rs.100.000 millions - Interest - As per RBI guidelines

General Guarantee sub limit of EPC - Rs.10.000 millions - Standard Tariff.

Terms of Repayment –

Export Post Finance (PSC) - Tenor - Max. 90 days

Export Pre Finance (EPC) - Tenor - Max. 90 days

General Guarantee - Tenor - Max. 12 months plus 3 months claim period.

Margin - As applicable, if any.

Extent and Operation of the charge - The Bank is having first exclusive charge on the security offered by the Borrower.

Short particulars of the property charged

Hypothecation by way of first charge on:

a) Movable Fixed Assets, both present and future.

b) Stocks, both present and future.

c) Bookdebts, both present and future.

Fixed Assets:

• Building
• Office equipment
• Plant and machinery
• Electrical fitting
• Furniture and fixture
• Computer
• Leasehold land
• Computer software

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.51.89
UK Pound	1	Rs.83.18
Euro	1	Rs.68.06

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		28

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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