MIRA INFORM REPORT

Report Date :

03.01.2012

IDENTIFICATION DETAILS

Name :	NISSAN COPPER LIMITED
Registered Office :	Shed No. J.20, GIDC, Umbergaon, Valsad, Gujarat- 396 171
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	01.12.1989
Com. Reg. No.:	13072
Capital Investment / Paid-up Capital :	Rs.628.559 millions
CIN No.: [Company Identification No.]	L36939GJ1989PLC013072
TAN No.: [Tax Deduction & Collection Account No.]	SRTN01025D
PAN No.: [Permanent Account No.]	AABCN0105B
Legal Form :	A Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges
Line of Business :	Manufacturer of copper Rods/Section/flats, Copper Ingots/Billets Bars, Copper Wire Bars, Copper Strips and Copper Pipes catering to FMCG, OEMs and Construction industry.
No. of Employees :	Not Available

RATING & COMMENTS

	MIRA’s Rating :			Ba (46)
RATING			STATUS		PROPOSED CREDIT LINE
41-55		Ba	Overall operation is considered normal. Capable to meet normal commitments.		Satisfactory

Maximum Credit Limit :	USD 8165744
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered normal for business dealing as 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

LOCATIONS

Registered Office:	168/2/1, Rudana, Khanvel, Silvassa – 396230, Dadar Nagar Haveli, India
E-Mail :	query@nissancopper.com
Website :	www.nissancopper.com
Branch Office :	8, Badrika Ashram, 1st Khetwadi Lane, Mumbai-400 004, Maharastra, India
Tel. No.:	91-22-23822077 / 23892782
Fax No.:	91-22-23873889
E-Mail :	sales@nissancopper.com marketing@nissancoper.com
Corporate Office :	1002 Raheja Centre, Nariman Point, Mumbai- 400 021, Maharashtra, India
Tel. No.:	91-22-32522077/32522080
Fax No.:	91-22-22833889
Factory 1 :	Survey No. 168/2/1, Village: Rudana, Khanvel, Silvassa - 396 230. Dadra and Nagar Haveli, India
Tel. No.:	91-260-2677891 / 3299523 / 3299524 / 3209906
Fax No.:	91-260-2677909
Factory 2 :	J/20, G. I. D. C, Umbergaon - 396171, Gujarat, India

DIRECTORS

AS ON 31.03.2011

Name :	Mr. Sanjay Mardia
Designation :	Chairman
Name :	Mr. Ratanlal Mardia
Designation :	Managing Director
Name :	Mr. Atul Mardia
Designation :	Executive Director
Name :	Mr. Nitin Mehta
Designation :	Independent and Non Executive Director
Name :	Mr. Sailesh H Shah
Designation :	Independent and Non Executive Director
Name :	Mr. Praveen H. Shah
Designation :	Independent and Non Executive Director

KEY EXECUTIVES

Name :	Mr. Hiresh Luhar
Designation :	Chief Financial Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.12.2011

Category of Shareholder	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group^2
Indian
Individuals/ Hindu Undivided Family	134207300	21.35
Bodies Corporate	65000000	10.34
Public shareholding
Institution
Financial Institution / Banks	2000	--
Foreign Institution Investors	32503630	5.17
Non-institutions
Bodies Corporate	130196792	20.71
Individuals
Individuals -i. Individual shareholders holding nominal share capital up to Rs 0.100 Million	75896238	12.07
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	3992182	6.36
Any Other (specify)
Non Residence Indians	2928500	0.47
Clearing Members	173293	0.03
Employee	159115	0.03
Overseas Corporate Bodies	147500000	23.47
GRAND TOTAL (A)+(B)+(C)	628559050	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of copper Rods/Section/flats, Copper Ingots/Billets Bars, Copper Wire Bars, Copper Strips and Copper Pipes catering to FMCG, OEMs and Construction industry.

Products :

v Copper for ref and Air conditioning

v High Conductivity Copper Tubes

v Copper Tubes for Genl Engineering

v High Conductivity Copper Rods

v 70/30 Cupro Nickel Tubes

v 90/10 Cupro Nickel Tubes

v 63/37 Brass Tubes

v 70/30 Brass Tubes

v Billets

v Strips

v Ingots

v Flats

Item Code No. (ITC Code)	7411.10
Product Description	Copper Products

PRODUCTION STATUS AS ON 31.03.2011

Particulars	Unit	Installed Capacity	Actual Production
Copper Pipes	MT	15000	1928.575
Copper Section/ Mother Tube/ Flats/ Rod/ Strips/ wire Bars	MT	5400	2278.007
Copper Ingots/ Billet Bars	MT	10800	3525.303
Other Products	MT	--	87.768

GENERAL INFORMATION

Bankers :

v State Bank of India

v City Bank

v ICICI Bank

Facilities :

SECURED LOANS :	AS ON 31.03.2011 RS. IN MILLIONS	AS ON 31.03.2010 RS. IN MILLIONS
Term Loan from Bank Term Loan	663.154	333.503
Working Capital Borrowing from Bank Cash credit Limits	539.734	238.929
Sales Bills Discounting	35.639	72.298
Purchase Bills Discounting	250.145	164.851
Car Loan	2.925	1.831
Total	1491.599	811.414

UNSECURED LOANS :	AS ON 31.03.2011 RS. IN MILLIONS	AS ON 31.03.2010 RS. IN MILLIONS
From Corporate / Banks	24.677	16.456
Total	24.677	16.456

Notes:-

1. Secured by Equitable mortgage of lease hold Land at GIDC, Umergaon and Freehold land at Khanvel, U.T., D.N.H. and Building constructed on said plots and Hypothecation of Plant and Machineries.

2. Secured by hypothecation of stock of raw materials , semi-finished goods, finished goods, packing materials, stores, spares, book-debts and other current assets and further secured by way of extention of charge over immovable properties of the Company.

3. Further secured by personal guarantees of three Promotor Directors and personal properties of Director and their relatives.

4. Car Loan is secured by hypothecation of the vehicles financed by the bank.

Banking Relations :	-
Auditors :
Name :	Ramesh Bhatt and Company Chartered Accountants
Address :	Mumbai, Maharashtra, India

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
700000000	Equity Shares	Rs.10/- each	Rs.700.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
628559050	Equity Shares	Rs.10/- each	Rs.628.559 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		628.559	289.769	145.559
2] Share Application Money		0.000	43.939	0.000
3] Reserves & Surplus		1412.877	538.336	406.336
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		2041.436	872.044	551.895
LOAN FUNDS
1] Secured Loans		1491.599	811.414	470.122
2] Unsecured Loans		24.677	16.456	0.000
TOTAL BORROWING		1516.276	827.870	470.122
DEFERRED TAX LIABILITIES		1.235	0.932	2.329
TOTAL		3558.947	1700.846	1024.346
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1038.911	525.767	268.171
Capital work-in-progress		0.000	0.000	9.720
INVESTMENT		2.284	2.500	2.500
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	508.256	407.988	251.624
	Sundry Debtors	1133.007	597.866	502.706
	Cash & Bank Balances	287.684	57.169	26.786
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	1299.171	600.244	194.932
Total Current Assets		3228.118	1663.267	976.048
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	415.374	336.160	142.738
	Other Current Liabilities	319.317	94.933	72.375
	Provisions	138.089	72.308	31.819
Total Current Liabilities		872.780	503.401	246.932
Net Current Assets		2355.338	1159.866	729.116
MISCELLANEOUS EXPENSES		162.413	12.713	14.839
TOTAL		3558.947	1700.846	1024.346

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	2990.591	1887.959	1448.916
		Other Income	47.508	11.136	2.003
		TOTAL (A)	3038.099	1899.095	1450.919
Less	EXPENSES
		Materials & Manufacturing Expenses	2437.816	1657.580	1106.796
		Personnel Expenses	38.528	28.889	19.360
		Sales & Distribution Expenses	4.305	3.316	1.845
		Administration Expenses	70.702	23.609	22.076
		Excise Duty	141.618	93.181	102.554
		Increase/(Decrease) in Stock	9.181	(149.379)	45.540
		TOTAL (B)	2702.150	1657.196	1298.171
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		335.949	241.899	152.748
Less	FINANCIAL EXPENSES (D)		117.046	80.347	78.451
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		218.903	161.552	74.297
Less/ Add	DEPRECIATION/ AMORTISATION (F)		47.087	40.691	46.476
	PROFIT BEFORE TAX (E-F) (G)		171.816	120.861	27.821
Less	TAX (I)		46.390	29.595	6.480
	PROFIT AFTER TAX (G-I) (J)		125.426	91.266	21.341
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		130.483	96.168	21.341
Less	APPROPRIATIONS
		General Reserve	50.000	40.000	10.000
		Proposed Dividend on Equity Shares	31.428	14.488	7.278
		Corporate Tax on Proposed Dividend	5.220	2.462	1.237
	BALANCE CARRIED TO THE B/S		169.261	130.483	18.515
	IMPORTS
		Raw Materials	13.922	0.398	NA
		Stores & Spares	206.672	93.759	NA
	TOTAL IMPORTS		220.594	94.157	NA
	Earnings Per Share (Rs.)		0.23	0.60	--

QUARTERLY

PARTICULARS	30.06.2011	30.09.2011
Type	1^st Quarter	2^nd Quarter
Sales Turnover	640.600	622.290
Total Expenditure	563.580	551.530
PBIDT (Excl OI)	77.020	70.760
Other Income	6.740	7.170
Operating Profit	83.760	77.930
Interest	41.570	43.160
Exceptional Items	0.000	0.000
PBDT	42.190	34.770
Depreciation	14.570	14.740
Profit Before Tax	27.610	20.030
Tax	7.360	7.560
Reported PAT	20.250	12.470
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	20.250	12.470

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	4.13	4.81	1.47
Net Profit Margin (PBT/Sales)	(%)	5.75	6.40	1.92
Return on Total Assets (PBT/Total Assets}	(%)	4.03	5.52	5.40
Return on Investment (ROI) (PBT/Networth)		0.08	0.14	0.05
Debt Equity Ratio (Total Liability/Networth)		1.17	1.53	1.30
Current Ratio (Current Asset/Current Liability)		3.70	3.30	3.95

LOCAL AGENCY FURTHER INFORMATION

FINANCIAL PERFORMANCE

During the year, the gross turnover of the Company has increased by 58.40 % from Rs.18,87.959 Millions to Rs.29,90.591 Millions. The increase in turnover was preliminary due to increase in copper prices and also due to partial installation of the ACR Tube Plant.

The profit before Depreciation, Finance Cost and taxation has gone up to Rs.3,35.947 Millions as compared to Rs.2,41.899 Millions during the preceding year, registering a growth of over 38.88%. The profit after tax has increased to Rs.1,25.426 Millions as compared to Rs.91.266 Millions during the preceding year, registering a growth of 37.43%.

The Company has taken measures to adopt innovative strategies to increase the turnover and profitability of the Company. The Company is continuing its efforts to improve productivity and curtail costs.

During the year, the Company’s plants at Umbergaon and Silvassa have performed satisfactorily. The plants at Silvassa continue to be eligible for tax holidays pursuant to section 80 IB of the Income Tax Act, 1956. The operation of the Company is carried in a single segment i.e. manufacturing and marketing of Copper Products.

OPERATIONAL PERFORMANCE:

Copper Mother tubes/ Flats /sections are semi-finished goods which are further used for the production of final product i.e. Copper Pipes. During the year company has reduced the sale of these semi- finished goods and further utilised the same for production of Copper Pipes. Hence, there is a decrease in the variances of these products.

Further, there was an increase in sale of Copper pipes, tubes, ingots and other products mentioned in the table due to which the could see increase in variances of these products.

EXPANSION PROJECT:

During the year under review, the Company has set up a “State of the Art” facility to manufacture Copper tubes for Air Conditioning, Refrigeration and Plumbing application areas with the latest Cast and Roll technology. The trial production from the new machinery done in phases has been successful and the commercial production will commence from June 2011. The installed capacity would be 1000 MT per month. The increase in capacity will give it higher market share in the copper tubes for ACR segment. The funds for expansion were raised through the preferential allotment, bank and internal accruals.

Nissan Copper Limited will be the only manufacturer in India to produce ACR copper tubes in level wound coils and inner grooved tubes using the latest Cast and Roll technology. The project is first of its kind in India and is a 100% Import Substitute. Presently domestic demand for most of these tubes is being met through imports from China and other Southeast Asian countries.

Nissan recently introduced a Brand name “NISSCOP” for their Copper products. The company plans to market its entire range of Copper products under this brand, while ‘Nissan’ will remain as the “Umbrella” brand. They launched ‘NISSCOP’ in the exhibition, “ACREX 2011” which was held at Pragati Maidan, New Delhi in the month of February 2011 and all appropriate steps are being taken to popularise this brand. The application has already been submitted to the concerned authority for registering ‘NISSCOP’ and until they get the registration, it is being stated as “Trademark”, in their campaign to promote the same.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS:

Copper is the one of the most widely used industrial metal. It is best conductor of electricity with high electrical and thermal conductivity, high strength, malleability, corrosion resistance, precision castability. Because of its high ability to form alloys with other metals, it is used in wide range of industries including engineering, electrical etc.

Copper consumption in a country is an indicator of its level of economic development. Per capita consumption in

India is in the order of 0.50 Kg as compared to 10 Kg in developed countries. Demand for copper is expected to surge in the domestic market, too, considering the huge capacity additions in its consumer industries. Copper prices in the domestic market grew by 16.8 per cent y-o-y in the December 2010 quarter. The average expected growth of the construction industry of approx 7% - 9% p.a. will continue to drive the demand for copper building wires. In view of the growth in per capita disposable income the standard of living will improve; that will increase the density of copper usage in building wires as well.

Further growth in power sector is likely to drive India's copper consumption. The country has an installed capacity of 163,000MW of electricity and according to 11th Five year plan Power Generation capacity addition is expected to be 78,700MW during the period (2008-2012). Other consumer industries like real estate, machinery, transport and consumer durables, too, are on an expansion spree. According to the International Energy Agency, India's power production is expected to rise by 15-20% annually and to meet that, India needs to invest $1.25 trillion by 2030 into energy infrastructure. From this new infrastructure, India's annual copper demand is expected to be more than double.

During the year review, the Company has successfully set up a ‘state of the art’ facility to manufacture Copper tubes for Air-conditioning, Refrigeration and Plumbing application areas with the latest ‘Cast and Roll’ Technology.

The trial production from the new machinery done in phases has been successful and the commercial production will commence from June 2011.

OPPORTUNITIES AND THREATS

OPPORTUNITIES

· Government of India has targeted 100% electrification of rural areas by 2012 which will in turn drive additional demand for copper in power generation, transmission and distribution sectors.

· Growth in construction industry will continue to drive the demand for copper building wires.

· Additional demand for copper will be created in urban mass rapid transport e.g. underground trains, monorails, etc. to reduce the traffic jams in cities like Mumbai, Delhi etc.

· Government has already started changing the method of delivery of LPG from Cylinders to Piping, thereby creating continuous demand for copper tubes.

· The new project of manufacturing copper tubes by “Cast and Roll Technology” will provide an Import substitution for the country.

· Being an Indian producer of copper products, there is a huge demand of these products in the Government Projects and many other Private Projects.

· Lesser Production Cost thus more competitive.

· Better Geography and product mix.

· Since the trade barriers and policies of countries like USA and Europe have provided a liberal hand to India, the demand for their products in those countries has accelerated. Apart from this they also foresee good business relations from GCC countries especially Qatar and Bahrain, where the growth in infrastructure is tremendously shooting upwards.

· Highest ever-copper semis production, improved operations efficiencies and continued cost reduction focus.

· Higher value added products in the existing production plant.

THREATS

· Substitutes: With the relatively high volatility of copper prices (raw material) which are controlled by the London Metal Exchange (LME) over the last several years, increased attention has been paid to the issue of substitution. Some of the substitutes are Aluminium, Zinc, plastic, stainless steel, optical fibre etc.

· Competitive Rivalry: Competitive pricing strategy adopted by competitors due to trade economies may pose threat on market pricing leading to a reduced return as compared to expectations.

· New Entrants: Stiff competition is faced from Chinese producers as well as producers within the country which include the SSI (Small Scale Industry) and unorganized sector players.

CHALLENGES

Large imbalance between India’s smelting/ refining capacity and its limited production capacity in copper mining. In 2010, India’s copper refining capacity was more than 1 mm tonnes of copper. The copper ore production in India for fiscal 2010 was 3.2 mm tonnes. India accounts for 3% of the global output but still has to depend completely on the copper ore imports. The lack of sufficient supply of domestic copper ore has resulted in Custom smelters relying on imported copper concentrate to feed the domestic demand. [Source: Ministry of Mines]

PERFORMANCE:

During 2010-11, the Company sold 7,389.928 tonnes of Copper and other related Products as against 5,353.605 tonnes in 2009-10, achieving a growth of 38.04 % of Copper and other related Product.

FACTORS INFLUENCING COPPER MARKET AND PRICES

· Copper prices in India are fixed on the basis of the rates that rule on LME and Rupee and US Dollar exchange rate.

· The fluctuation in US Dollar is a major issue.

· Economic growth of the major consuming countries such as China, USA, Japan, Germany, India etc.

· Growth and development in the Infrastructure, Power Sector, Real-estate, Telecom and Electrical Industry.

· Natural calamities such as earthquakes and floods affect the production in mines and transportation thereby affecting the supply.

· Quality of ores.

FUTURE OUTLOOK

The Indian Economy has shown remarkable resilience. The overall growth of Gross Domestic Product (GDP) at factor cost at constant prices, as per Advance Estimates, was 8.6 per cent in 2010-11 representing an increase from the revised growth of 8.0 per cent during 2009-10, according to the Advance Estimate (AE) of Central Statistics Office (CSO). The growth rate of 8.6 per cent in GDP during 2010-11 has been due to the growth rates of over 8 per cent in the sectors of ‘manufacturing’, ‘construction’, 'trade, hotels, transport and communication', 'financing, insurance, real estate and business services'. Agricultural sector registered a growth rate of 5.4 per cent. The non-ferrous metals industry constitutes an important part in the Indian Economy. The industry fulfills the requirements of a broad range of leading sectors like automobile and automotive parts, infrastructure, engineering, electronics, construction, packaging etc.

India’s per capita consumption of Copper is significantly less than that of China and substantially lower than the world average. However, India’s domestic Copper Consumption is growing rapidly. Copper demand for the country is at 6,50,000 tonnes by the end of 2011 as compared to 5,65,000 tonnes in 2010. The total copper consumption is estimated at 7,20,000 tonnes in 2011. [Source: Copper Fundamental Analysis 2011, Hedge Equities] The Copper Industry (both global and domestic) is presenting a significant path of growth and development and different sections of Industries such as telecom sector, power, automobile etc. are showing their interest with regards to Copper in their applications/products.

Government initiatives will further increase the growth of the Copper Consuming Industries as under:

· The Power, Telecom and Railway Industries are expected to attract 30.4%, 13.2% and 12.7%, respectively, of the total projected investment in infrastructure of US$581.68bn during the 11th five year plan.

· The Power Industry has a target growth rate of 9% for fiscal 2008 to fiscal 2012 according to Ministry of Power.

· Investment of Rs.110 – 120bn per annum as required for the automotive industry to reach its growth potential during the 11th Plan period.[Source: 11th Five year Plan, Minstry of Power, Minstry of Heavy Industries and Public Enterprises]

According to International Copper Study Group (ICSG) data, global growth in copper demand for 2011 is expected to exceed global growth in copper production and the annual production deficit, estimated at about 250,000 metric tons (t) of refined copper in 2010, is expected to be about 380,000 t in 2011. In response to prevailing high copper prices and increased end use demand, production increases are expected at operations curtailed following the 2008 economic crisis and, to a lesser extent, from startup of new operations. Industrial demand in 2011 in all of the major consuming regions is expected to continue the upward trend begun in 2010 and exceed the growth in refined production.

ICSG expects world apparent refined usage in 2011 to increase by 4% from that in 2010 to more than 20 Mt. In 2012, refined usage is again expected to increase in all major world markets, with global demand expected to rise by more than 4%. In 2012, the production deficit is expected to narrow as refined copper production is expected to grow faster than demand.

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.53.29
UK Pound	1	Rs.82.66
Euro	1	Rs.68.90

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		46

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.