MIRA INFORM REPORT

Report Date :

14.06.2012

IDENTIFICATION DETAILS

Name :	CARNATION INDUSTRIES LIMITED
Registered Office :	28/1 Jheel Road, Liluha, Howrah – 711204, West Bengal
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	23.02.1983
Com. Reg. No.:	21-035920
Capital Investment / Paid-up Capital :	Rs.34.572 Millions
CIN No.: [Company Identification No.]	L27209WB1983PLC035920
Legal Form :	A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.
Line of Business :	Manufacturer and Merchant Exporter of Grey Cast Iron Product and Ductile Product.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (32)

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

Maximum Credit Limit :	USD 450000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track. The company has incurred some losses in the current year. However, trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. The company can be considered for business dealings with some caution.

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 :	28/1 Jheel Road, Liluha, Howrah – 711204, West Bengal
Tel. No.:	91-33-26454785
Fax No.:	Not Available
E-Mail :	sanjay@carnationindustries.com ware_hs@yahoo.com
Website :	http://www.carnationindustries.com
Corporate Office :	222, A. J. C. Bose Road, 1st Floor, Room No. 4 and 5, Kolkata – 700 017, West Bengal, India
Tel. No.:	91-33-22902256/22878229
Fax No.:	91-33-22879938
E-Mail :	carnation.ltd@gmail.com caecast@vsnl.net
Factory:	Mauza Rauta Village, Kaituri, Uluberia, Howrah - 711 316, West Bengal, India

DIRECTORS

As on 23.09.2011

Name :	Mr. Shekhar Chatterjee
Designation :	Chairman
Name :	Mr. R. P. Sehgal
Designation :	Managing Director
Name :	Mr. Suvobrata Saha
Designation :	Joint Managing Director
Name :	Mr. Arun Kumar Bose
Designation :	Whole time Director
Name :	Mr. R. C. Jha
Designation :	Director
Name :	Mr. B. K. Datta
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Sanjay Agarwal
Designation :	Company Secretary
Audit Committee:	Mr. Shekhar Chatterjee Mr. R. C. Jha Mr. B. K. Datta
Remuneration Committee:	Mr. Shekhar Chatterjee Mr. R. C. Jha Mr. B. K. Datta
Share holders’/ investors’ Grievance committee:	Mr. R. C. Jha Mr. R. P. Sehgal

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2012

Category of Shareholder	No. of Shares	% of No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	811,784	23.48
Sub Total	811,784	23.48
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	720,733	20.85
Sub Total	720,733	20.85
Total shareholding of Promoter and Promoter Group (A)	1,532,517	44.33
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	48,200	1.39
Sub Total	48,200	1.39
(2) Non-Institutions
Bodies Corporate	131,817	3.81
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	759,081	21.96
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	985,545	28.51
Sub Total	1,876,443	54.28
Total Public shareholding (B)	1,924,643	55.67
Total (A)+(B)	3,457,160	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)	3,457,160	-

BUSINESS DETAILS

Line of Business :	Manufacturer and Merchant Exporter of Grey Cast Iron Product and Ductile Product.
Products :	ITC Code No	Product Description
	M.S. Product	732599
	Cast Iron Castings	730890

PRODUCTION STATUS (As on 31.03.2011)

Particulars	Unit	Installed Capacity	Actual Production
Castings	M.T.	20000	14301
M S Product	M.T.		26

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· State Bank of Hyderabad

· Punjab National Bank

Facilities :

(Rs. in Millions)

Secured Loan	As on 31.03.2011	As on 31.03.2010
From Scheduled Banks (Secured against purchase of bills, hypothecation of stock in trade, Book Debts, and receivables, Term Deposits, Equitable Mortgage of Land / Buildings owned by the Company as well as by some Directors, charge on the existing and future plant and machinery owned by the Company and personal guarantee of some Directors and guarantee by ECGC on pari-passu basis amongst the Bankers).
Packing Credit	145.850	96.207
Bills Purchase Account	92.726	115.920
Standby Line of Credit	45.000	27.500
Term Loan	19.874	13.106
Interest Accrued but not due on above	0.225	0.216
From ICICI Bank Limited
Car Loan	1.208	0.023
Total	304.883	252.972

Banking Relations :	--
Auditors :
Name :	Jain and Bagaria Chartered Accountant
Address :	27/8A, Waterloo Street Kolkata-700 069, West Bengal, India
Enterprises over which key Management personnel are able to exercise significant influence:	North American Cast Iron Products INC

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
7000000	Equity Shares	Rs.10/- each	Rs.70.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
3457160	Equity Shares	Rs.10/- each	Rs.34.572 Millions

Note: Of the above shares 945900 shares were alloted as fully paid up by way of bonus shares by capitalization of General Reserves created out of Profit

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		34.572	34.572	34.572
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		80.001	108.676	105.346
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		114.573	143.248	139.918
LOAN FUNDS
1] Secured Loans		304.883	252.972	241.061
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		304.883	252.972	241.061
DEFERRED TAX LIABILITIES		9.082	9.285	8.166
TOTAL		428.538	405.505	389.145
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		137.821	122.433	115.674
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.022	0.022	0.022
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	123.352	86.683	134.000
	Sundry Debtors	198.796	169.108	98.269
	Cash & Bank Balances	12.556	14.814	19.141
	Other Current Assets	124.807	98.180	92.716
	Loans & Advances	50.706	48.423	55.548
Total Current Assets		510.217	417.208	399.674
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	171.018	82.619	66.806
	Other Current Liabilities	8.808	10.010	10.428
	Provisions	39.696	41.625	49.203
Total Current Liabilities		219.522	134.254	126.437
Net Current Assets		290.695	282.954	273.237
MISCELLANEOUS EXPENSES		0.000	0.096	0.212
TOTAL		428.538	405.505	389.145

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	596.445	536.812	583.593
		Other Income	46.521	38.662	33.122
		TOTAL	642.966	575.474	616.715
Less	EXPENSES
		Cost of Goods Sold	(35.825)	44.617	(4.530)
		Purchase of Finished and Semi Finished Goods	3.422	16.572	14.083
		Manufacturing Expenses	534.506	385.522	463.249
		Administrative and Selling Expenses	59.426	47.249	56.913
		Payments and Benefit to Employees	61.163	40.624	33.609
		TOTAL	622.692	534.584	563.324
Less	PROFIT/(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		20.274	40.890	53.391
Less	FINANCIAL EXPENSES		31.030	24.613	33.658
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		(10.756)	16.277	19.733
Less/ Add	DEPRECIATION/ AMORTISATION		15.469	13.846	12.545
Less	AMORTISATION OF MISCELLANEOUS EXPENDITURE		0.096	0.116	0.176
Less	PROFIT/(LOSS) BEFORE TAXATION AND EXTRA ORDINARY ITEMS		(26.321)	2.315	7.012
Less	EXTRAORDINARY ITEMS		1.161	0.000	0.000
	PROFIT/(LOSS) BEFORE TAX		(27.482)	2.315	7.012
Less	TAX		0.414	(3.433)	1.898
	PROFIT/(LOSS) AFTER TAX		(27.068)	5.748	5.114
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		21.149	17.819	15.132
Less	APPROPRIATIONS
		Dividend	1.383	2.074	2.074
		Tax on Dividend	0.224	0.344	0.353
	BALANCE CARRIED TO THE B/S		(7.526)	21.149	17.819
	EARNINGS IN FOREIGN CURRENCY
		Export of goods	580.479	514.279	568.784
		Overseas Trading	2.920	11.801	14.809
	TOTAL EARNINGS		583.399	526.080	583.593
	IMPORTS
		Raw Materials and Consumable	5.192	2.542	98.219
		Overseas Trading	2.525	10.470	13.465
	TOTAL IMPORTS		7.717	13.012	111.684
	Earnings/(Loss) Per Share (Rs.)		(7.83)	1.66	1.48

QUARTERLY RESULTS

PARTICULARS	30.06.2011	30.09.2011	31.12.2011	31.03.2012
Type	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Net Sales	169.210	247.810	213.320	253.190
Total Expenditure	166.710	239.400	207.130	236.220
PBIDT (Excl OI)	2.500	8.410	6.190	16.970
Other Income	11.670	17.970	11.230	0.740
Operating Profit	14.170	26.380	17.420	17.710
Interest	9.370	16.820	8.130	10.130
Exceptional Items	0.000	0.000	0.000	0.000
PBDT	4.800	9.560	9.290	7.580
Depreciation	3.860	4.270	4.430	5.260
Profit Before Tax	0.940	5.290	4.860	2.320
Tax	0.000	1.160	0.930	1.970
Provisions and contingencies	0.000	0.000	0.000	0.000
Profit After Tax	0.940	4.130	3.930	0.340
Extraordinary Items	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000
Net Profit	0.940	4.130	3.930	0.340

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	4.21	0.99	0.83
Net Profit Margin (PBT/Sales)	(%)	4.61	0.43	1.20
Return on Total Assets (PBT/Total Assets}	(%)	5.39	0.55	1.75
Return on Investment (ROI) (PBT/Networth)		0.24	0.02	0.05
Debt Equity Ratio (Total Liability/Networth)		1.92	0.94	0.90
Current Ratio (Current Asset/Current Liability)		2.32	3.11	3.16

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	No
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	No

FINANCIAL REVIEW

The Export Sale (net of freight) at Rs. 583.399 Millions during the year as against Rs. 526.080 Millions during the previous year, 2009-10, recorded an increase of about 11%, resulting from increase in volume and price by about 5% on each count. The increase in selling price was more than off-set by significant increase in raw material price as the same could not be passed over to the customer for competitive pressure. Besides, the increases in the selling price lagging increase in raw material price almost throughout the year without affording any opportunity to the business to recover the increase in raw material cost. Adverse exchange fluctuation also took its toll as the loss in exchange fluctuation during the time interval of quotation and firm order was not allowed to be recouped through any system of price escalation on this account. These factors of raw material and price mismatch along with volatility in price exchange fluctuation significantly contributed to the Company’s loss.

Extraordinary item refers to estimated liability of Rs. 1.161 Millions in respect of the damages suffered by a vessel on 23.11.2010 carrying six containers of their exported goods, involved in the collision with another vessel at Hooghly river passage.

The redeeming factor was however increase in export incentives by about 23% from DEPB and Focus License.

FINANCE

Internal cash generation suffered a setback, apart from the loss, on account of significant increase in debtors, for their severe liquidity problems. The problem of working capital was further compounded on account of extremely slow progress in the refund of Input Tax Credit, captured in protracted process. These problems of internal cash generation had to be overcome through increased borrowings involving higher interest cost.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENT

Global Census on Foundries now show that India is the second highest producer of castings in the world with a production of approx. 8 million tons per annum, second only to China which produces approx 32 million tons of castings. China produces 8 million tons of Ductile Iron which constitute 25% of their castings and India produces only 10%(of total castings) i.e. 0.8 million tons. This indicates the immense potential that India has in the future. With the massive shift of European buyers towards India – the export demand holds out strong potential. The domestic increase in Automobiles, Tractors and Earth Moving equipments is giving rise to the increased domestic demand as well.

Contingent liability not provided for in respect of:

SR	PARTICULARS	31.03.2011
1	Outstanding Bank Guarantee	4.490
2	Disputed Income Tax Penalty for the assessment year 2003-04	1.275
3	Disputed Duty AND Penalty under Central Excise Law	8.656
4	Departmental appeals before the Income Tax Appeallate Tribunal for the assessment ye 2000-2001, 2001-2002 & 2002 -2003	13.699

STATEMENT OF AUDITED FINANCIAL RESULTS FOR THE QUARTER AND YEAR ENDED 31^st MARCH 2012

						Rs in Millions
	Particulars			Quarter Ended	Quarter Ended	Year Ended
				31.03.2012	31.12.2011	31.03.2012
				(Audited)	(Unaudited)	(Audited)
1	(a) Net Sales/Income from Operations			253.190	224.547	924.270
	(b)Other Operating Income			0.000	0.000	0.000
	Total income from operations (net)			253.190	224.547	927.270
2	Expenditure
	(a)		Consumption of raw material	153.460	140.817	596.471
	(b)		Purchase of stock-in -trade	1.001	2.664	4.535
	(c)		Changes in inventories of finished goods, work-in-progress and stock-in-trade	4.639	(6.407)	(23.190)
	(d)		Employee cost	21.474	19.145	79.134
	(e)		Depreciation and amortisation expenses	5.258	4.433	17.823
	(f )		Other Expenditure	55.646	50.908	197.402
			Total Expenses	241.478	211.560	872.275
3			Profit from operation before other income, interest and other exceptional items(1-2)	11.712	12.987	51.995
4			Other Income	0.742	0.000	0.863
5			profit before interest and exceptional items(3+4)	12.454	12.987	52.858
6	Interest			10.133	8.126	39.444
7	Profit after interest but before exceptional items(5-6)			2.321	4.861	13.414
8	Tax Expenses
	a) Provision for Income Tax			0.811	0.911	2.944
	b) Taxes relating to earlier years			(0.287)	(0.006)	(0.293)
	c) Provision for Deferred Tax			1.455	0.024	1.419
	Total			1.979	0.929	4.070
9	Net Profit(+)/Loss(-) from Ordinary Activities after tax( 9-10)			0.342	3.932	9.344
10	Extraordinary Items			0.000	0.000	0.00
11	Net Profit /(Loss) for the period			0.342	3.932	9.344
12	Paid-up equity share capital (Face value of Rs.0/- each)			34.572	34.572	34.572
13	Reserve excluding Revaluation Reserves as per balance sheet of previous accounting year			0.000	0.000	86.935
14		Earning Per Share
(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)		0.10	1.14	2.70
(b)		Basic and diluted EPS after Extraordinary items for the period, for the year to date and for the previous year(not to be annualised)		0.10	1.14	2.70
15		Public Shareholding
		Number of Shares		1924643	1924643	1924643
		Percentage of Shareholding		55.67	55.67	55.67
16		Promoters and Promoter group
		a) Pledged/Encumbered
		Number of shares		0.000	0.000	0.000
		Percentage of Shares (as a % of the total shareholding of promoter and promoter group)		0.000	0.000	0.000
		Percentage of Shares (as a % of the total share capital of the Company)		0.000	0.000	0.000
		b) Non-encumbered
		Number of shares		1532517	1532517	1532517
		Percentage of Shares (as a % of the total shareholding of promoter and promoter group)		100	100	100
		Percentage of Shares (as a % of the total share capital of the Company)		44.33	44.33	44.33

SEGMENT REPORTING PURSUANT TO CLAUSE 41 OF THE LISTING AGREEMENT FOR THE QUARTER AND YEAR ENDED ON 31.03.2012

GEOGRAPHICAL SEGMENT

				Rs in Millions
	Particulars	Quarter Ended	Quarter Ended	Year Ended
		31.03.2012	31.12.2011	31.03.2012
		(Audited)	(Unaudited)	(Audited)
1	Exports
	a) USA	93.397	73.922	309.909
	b) Middle East	76.262	71.149	246.761
	c) Europe	53.488	54.825	265.548
2	Domestic	15.800	13.420	47.066
	Net Sales / income From Operations	238.947	213.316	869.284

STATEMENT OF ASSETS AND LIABILITIES

	PARTICULAR	31.03.2012
I	Equity and Liabilities
	1) Shareholders Funds
	a) Share Capital	34.572
	b) Reserves and Surplus	86.935
	Total	121.507
	2) Non – Current Liabilities
	a) Long term Borrowing	12.164
	b) Deferred tax liabilities (Net)	10.510
	c) Other Long term liabilities	8.317
	Total	30.982
	3) Current Liabilities
	a) Short term borrowing	328.339
	b) Trade payable	308.861
	c) Other current liabilities	12.791
	d) Short term provision	5.097
	Total	655.088
	Total	807.577
II	Assets
	1) Non – Current Assets
	a) Fixed assets	159.970
	b) Non – current Investment	0.022
	c) Long term loans and advance	5.234
	Total	165.226
	2) Current Assets
	a) Current Investment	0.000
	b) Inventories	142.086
	c) Trade receivables	343.278
	d) Cash and cash equivalents	7.596
	e) Short term loans and advance	13.139
	f) Other current assets	136.252
	Total	642.351
	Total	807.577

Note:

1. The above result have been reviewed by the Audit Committee and taken on records by the Board of Directors of the Company at its meeting on 29^th May, 2012

2. Other income representing mainly export incentive

3. The Company is engaged in the manufacturer of castings and MS Product which are subject to the same risk and returns and hence constitute one primary segment. The analysis of geographical segments is based on the areas in which the company operates.

4. The financial statements for the year ended March 31, 2012 have been prepared as per Revised Schedule VI under the companies Act 1956, Previous year/period figures have been reclassified / regrouped to conform to the current years classification of revised Schedule VI.

5. The figures for the quarter ended 31^st March, 2012 are the balancing figure between audited figured in respect of full financial year ended 31^st March, 2012 and the published year to date figures up to the third quarter ended 31^st March, 2011

6. The Cord of Directors have recommended dividend @ 6% (Re. 0.60) for Equity Share of Rs. 10 each for the year 2011-2012

7. There were no investor companies’ pending to be resolved either at the beginning or at the end of the year

Fixed Assets

· Land

· Office Premises

· Type Writers

· Furniture and Fixtures

· Air Conditioners

· Office Equipments

· Motor Car

· Motor Cycle

· Computers P.C.

· Factory Sheds

· Plant and Machineries

· Pattern and Dices **

· Tools and Implements

· Electric Installation

· Telex (Electronics)

· Tubewell

· Pollution Control Equipment

INTANGIBLE ASSETS

· ERP Software

· Licence

AS PER WEBSITE DETAILS

COMPANY PROFILE

In the winter of 1982 amalgamated the combination of a few dynamic working men all successful in their respective fields to form Carnation Enterprise Private Limited. Which later in 1995 changed the name to Carnation Industries Limited

Starting off as a merchant exporter the Company recorded a steady growth each year, the Company went into manufacturing in the mid-eighty's and is running two Grey iron foundries and ductile Iron Unit all in West Bengal. Both the Grey Iron production units and the Ductile Iron production unit are certified by SGS (India) Limited. As per BS-EN-124 require for systems approval and specific product approvals.

Carnation is the country's first Conventional Grey Iron foundry to be certified ISO 9002 by KPMG (USA). Currently it holds the BS EN ISO 9001:2000 certificate from BSI (UK). UL Certification from Underwriters Laboratories Inc. USA.

Carnation, today, has a professional set up backed by a group of highly experienced and Technically qualifed shop staff in different departments working under professional managers. They have a work force strength of 40 experienced personnel and a labour strength of over 400 persons.

Product development, technology upgradation and providing more for the value of money are Carnation's forte.

A front runner today, Carnation has established itself as one of the top exporters of castings from India and it takes the toil and sweat of the whole team ably supported by juniors and the labour force to keep Carnation at top. Having attained status in the exports field, Carnation is now moving ahead with its plans to establish itself as a front runner in the Domestic Market with its new products and the changing scenarios in the Indian infrastructure development is bound to see a surge in its domestic Sales in the coming years.

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.55.85
UK Pound	1	Rs.86.87
Euro	1	Rs.69.87

INFORMATION DETAILS

Report Prepared by :

KVT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	-
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	4
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		32

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.