MIRA INFORM REPORT

Report Date :

14.06.2012

IDENTIFICATION DETAILS

Name :	ELECTROMECH MATERIAL HANDLING SYSTEMS (INDIA) PRIVATE LIMITED
Registered Office :	Gate No. 316, Plot No. IA/IB Kasar Amboli, Industrial Zone, Taluka Mulshi, Pune – 411004, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	08.05.1996
Com. Reg. No.:	11-099346
Capital Investment / Paid-up Capital :	Rs.50.000 Millions
CIN No.: [Company Identification No.]	U31109MH1996PTC099346
IEC No.:	3104014311
TAN No.: [Tax Deduction & Collection Account No.]	PNEE01757A
PAN No.: [Permanent Account No.]	AABCE2527J
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer and Exporter of Material Handling Equipments.
No. of Employees :	Information declined by the management.

RATING & COMMENTS

MIRA’s Rating :

Ba (45)

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

Maximum Credit Limit :	USD 1400000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. There appears some dip in the profitability of the company. However, trade relations are fair. Business is active. Payments are reported as 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.

INFORMATION PARTED BY

Name :	Mr. Ashish Patel
Designation :	Senior Account Executive
Contact No.:	91-20-66542222
Date :	13.06.2012

LOCATIONS

Registered Office / Factory / Head Office :	Gate No. 316, Plot No. IA/IB Kasar Amboli, Industrial Zone, Taluka Mulshi, Pune – 411004, Maharashtra, India
Tel. No.:	91-20-22922222 / 66542222
Fax No.:	91-20-22923300 / 66542222
E-Mail :	Tushar@emech.in cranes@emech.in nitin@emech.in
Website :	www.emech.in
Area :	10000 Sq. Ft.
Location :	Owned
Factory 2 :	16/3, F – 2 Block, M.I.D.C. Pimpari, Pune – 411018, Maharashtra, India
Tel. No.:	91-20-27473666
Fax No.:	91-20-27472278
Branch Office :	Ahmedabad Office Shop No.8, Sayam Mall, Satellite, Ahmedabad - 380015, Gujarat, India Bangalore Office No. 22, 3rd Floor, Above Bombay Dyeing Showroom,5th cross, 5th Block, Koramangala, Bangalore 500095, Karnataka, India Chennai Office No. 6, 5th Floor, B wing, Gemini Parsn Manere No. 602, Anna Salai, Chennai 600 006, Tamilnadu, India Delhi Office 812, Pearl Best Heights - II, Netaji Subhash Place, New Delhi – 110034, India Hyderabad Office: H. No.: 16-2-705/1/6/A, Professors Colony, Malakpet, Hyderabad 500036, Andhra Pradesh, India Kolkata 716, Jogendra Gardens, Ground Floor, Bosepukar, Kolkata 700 078, West Bengal, India     Mumbai Office “Technocity”, B-503, Plot no.X-1/2 & X-1/4, P Mahape, Navi Mumbai 400710, Maharashtra, India
Overseas Office:	Electromech FZE, LOB 19 1002, P.O.Box 263019, Jebel Ali Free Zone, Dubai - UAE
Tel No.:	971-4-8857466
Fax No.:	971-4-8857655
Email:	cranes@emech.ae

DIRECTORS

As on 05.08.2011

Name :	Mr. Tushar Vinayak Mehendale
Designation :	Managing director
Address :	Flat No. 2, Nishigandha Apt., Prabhat Road, CTT CTS 105/6FP No. 64/6, Pune – 411004, Maharashtra, India
Date of Birth/Age :	02.11.1975
Qualification :	B.E., M.S.
Date of Appointment :	09.04.1996
DIN No.:	01846705
Name :	Ms. Awanti Tushar Mehendale
Designation :	Director
Address :	Flat No. 2, Nishigandha Apt., Prabhat Road, CTT CTS 105/6FP No. 64/6, Pune – 411004, Maharashtra, India
Date of Birth/Age :	12.09.1976
Date of Appointment :	01.01.2007
DIN No.:	00434591
Name :	Mr. Prakash Bagla
Designation :	Director
Address :	Flat no.603C, Vastu Sidhi, Rajmata Jijabai Road, Near Pump House, Andheri (East), Mumbai – 400093, Maharashtra, India
Date of Birth/Age :	11.11.1975
Date of Appointment :	28.02.2011
DIN No.:	03043874

KEY EXECUTIVES

Name :	Mr. Ashish Patel
Designation :	Senior Account Executive

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 05.08.2011

Names of Shareholders	No. of Shares
Tushar Vinayak Mehendale	4052481
Surekha Vinayak Mehendale	247666
Awanti Tushar Mehendale	233000
Kedar Vinayak Mehendale	125055
Tushar Vinayak Mehendale C/o. Electromech Engineers	85254
Tushar Vinayak Mehendale C/o. Tushar Constructions	3030
Tushar Vinayak Mehendale C/o. Electromech Enterprises	4326
Kedar Vinayak Mehendale C/o. Electromech Engineers	64005
Kedar Vinayak Mehendale C/o. Tushar Constructions	3167
Kedar Vinayak Mehendale C/o. Electromech Enterprises	2773
Surekha Vinayak Mehendale C/o. Electromech Engineers	64042
Surekha Vinayak Mehendale C/o. Tushar Constructions	3158
Surekha Vinayak Mehendale C/o. Electromech Enterprises	21134
India Busines Excellence Fund 1	60909
ILFS Trust Company, India	30000
Total	5000000

As on 05.08.2011

EQUITY SHARES BREAK UP

Category	Percentage
Venture Capital	01.82
Bodies Corporate	5.02
Directors / Relatives of Directors	93.16
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer and Exporter of Material Handling Equipments.
Products :	Material Handling Equipments
Brand Names :	“EOT Cranes”
Exports :
Products :	Material Handling Equipments
Countries :	Germany Dubai
Imports :
Products :	· Raw Material
Countries :	· Germany · China

PRODUCTION STATUS

AS ON 31.03.2010

Particulars	Unit	Actual Production
Cranes	Nos.	519
Hoists	Nos.	80
Spares	Nos.	28315

GENERAL INFORMATION

No. of Employees :

Information declined by the management.

Bankers :

State Bank of India, Industrial Finance Branch, 2^nd Floor, Tara Chambers, Near Marri Mandir, Pune Mumbai Highway, Wekdewadi, Pune – 411003, Maharashtra, India

Facilities :

Secured Loans	31.03.2011 Rs. in Millions	31.03.2010 Rs. in Millions
Fully Convertible Debentures Secured	230.000	0.000
Rupee Term Loans Banks Secured	103.650	154.180
Foreign Currency Loans Others Secured	141.812	108.603
Working Capital Loans Banks Secured	197.325	328.932
Working Capital Loans Others Secured	78.617	0.000
Loans Taken For Vehicles Secured	0.482	1.603
Total	751.886	593.318
Unsecured Loans	31.03.2011 Rs. in Millions	31.03.2010 Rs. in Millions
Public Deposits Unsecured	0.000	6.610
Deposits Related Parties Unsecured	0.000	14.613
Total	0.000	21.223

Banking Relations :	--
Auditors :
Name :	B K Khare and Company Chartered Accountants
Address :	Prabhat Road, Erandwane, Pune, Maharashtra, India
PAN No.:	AAAFB0265E
Subsidiaries :	· Cranedge India Private Limited CIN No.: U74990PN2009PTC139931 · Electromech Overseas
Associates:	· Electromech FZE · Electromech Engineers · Electromech Maritech India Private Limited CIN No.: U74140PN2008PTC131227 · Anay Infra Projects Private Limited CIN No.: U45200MH2010PTC200029 · Rajapur Shipyard Private Limited CIN No.: U35110PN2008PTC131226

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
8000000	Equity Shares	Rs.10/- Each	Rs.80.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares	Rs.10/- Each	Rs.50.000 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		50.000	50.000	50.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		306.510	290.395	202.301
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		356.510	340.395	252.301
LOAN FUNDS
1] Secured Loans		751.886	593.318	486.949
2] Unsecured Loans		0.000	21.223	10.912
TOTAL BORROWING		751.886	614.541	497.861
DEFERRED TAX LIABILITIES		24.028	14.462	9.179
TOTAL		1132.424	969.398	759.341
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		419.846	371.034	255.722
Capital work-in-progress		115.894	5.337	7.045
INVESTMENT		21.481	16.581	0.406
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	353.107	358.175	323.436
	Sundry Debtors	549.809	543.260	332.316
	Cash & Bank Balances	60.986	40.400	18.544
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	67.757	171.175	120.468
Total Current Assets		1031.659	1113.010	794.764
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	176.502	210.311	79.968
	Current Liabilities	265.454	268.259	218.727
	Provisions	14.500	58.076	0.000
Total Current Liabilities		456.456	536.646	298.695
Net Current Assets		575.203	576.364	496.069
MISCELLANEOUS EXPENSES		0.000	0.082	0.099
TOTAL		1132.424	969.398	759.341

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Sales and Other Income		1393.924	1376.474
		TOTAL (A)		1393.924	1376.474
Less	EXPENSES
		Cost of Materials		811.281	864.576
		Manufacturing Expenses		97.655	99.701
		Selling and Distribution Expenses		87.858	63.578
		Office Expenses		109.175	77.785
		Administrative Expenses		60.624	37.552
		Miscellaneous Expenses written off		0.016	0.016
		TOTAL (B)		1166.609	1143.208
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)			227.315	233.266
Less	FINANCIAL EXPENSES (D)			61.898	57.579
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		NA	165.417	175.687
Less/ Add	DEPRECIATION/ AMORTISATION (F)			9.846	6.516
	PROFIT BEFORE TAX (E-F) (G)			155.571	169.171
Less	TAX (H)			52.901	60.098
	PROFIT AFTER TAX (G-H) (I)			102.670	109.073
	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD			125.833	94.677
	APPROPRIATIONS
		Transfer to General Reserve		10.000	11.000
		Tax on Dividend		2.076	2.549
		Proposed Equity Dividend		12.500	7.500
		Interim Dividend		0.000	7.500
	BALANCE CARRIED TO THE B/S			203.927	125.833
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	87.175	27.480	NA
	TOTAL EARNINGS		87.175	27.480	NA
	IMPORTS
		Crane Kits	148.300	93.600	NA
		Stores & Spares	13.800	3.700
		Capital Goods	15.900	0.400
	TOTAL IMPORTS		178.000	97.700	NA
	Earnings Per Share (Rs.)		NA	20.53	21.82

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	NA	7.36	8.03
Net Profit Margin (PBT/Sales)	(%)	NA	11.16	12.29
Return on Total Assets (PBT/Total Assets}	(%)	NA	10.48	16.10
Return on Investment (ROI) (PBT/Networth)		NA	0.45	0.67
Debt Equity Ratio (Total Liability/Networth)		3.39	3.42	3.16
Current Ratio (Current Asset/Current Liability)		2.26	2.07	2.66

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS:

Particulars	31.03.2011 Rs. in Millions	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
Sundry creditors	176.502	210.311	79.968

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	Yes
10) Designation of contact person	Yes
11) Turnover of firm for last Two years	Yes
12) Profitability for last two 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)	Yes
21) Market information	--
22) Litigations that the firm / promoter involved in	--
23) Banking Details	Yes
24) Banking facility details	Yes
25) Conduct of the banking account	--
26) Buyer visit details	--
27) Financials, if provided	Yes
28) Incorporation details, if applicable	Yes
29) Last accounts filed at ROC	Yes
30) Major Shareholders, if available	Yes

NOTE:

The registered office address of the company has been shifted from “401-402, Abhijeet Court, Bhandarkar Road, Erandawana. Pune – 411004, Maharashtra, India” to the “Pralhad Arcade, Plot No. 73/2/1, Bhakti Nagar, Off Law College Road, Erndawana, Pune – 411004, Maharashtra, India” w.e.f. 01.09.2008. The registered office address of the company again shifted from “Pralhad Arcade, Plot No. 73/2/1, Bhakti Nagar, Off Law College Road, Erndawana, Pune – 411004, Maharashtra, India” to the present address w.e.f 01.07.2009

OPERATION:

FY 2010- 2011 was yet another interesting year in the history of the company. Although the year started on a dull note with a minimal growth of 1% achieved in the FY10 (Rs.1393.900 Millions) over FY 09’s figures (Rs. 1376.500 Millions), they managed to finish FY 11 with a sales figure of Rs. 16620.000 Millions, representing an overall growth in the topline to the tune of 19.2%.

On a consolidated basis considering ElectroMech Material Handling Systems (I) Private Limited, Cranedge India Private Limited and ElectroMech FZE, the total sales figure was Rs. 1813.600 Millions in FY11 as against Rs. 1398.400 Millions in FY10 registering a growth of 29.7%.

Hence even after facing difficult times for major part of FY11, the company managed to deliver growth in excess of the industry growth.

Continuing the tradition of each year, the company, on a standalone basis was able to deliver a healthy growth in the order book figures year on year. The company booked orders totalling Rs.1820.000 Millions as compared to a total of Rs. 1410.000 Millions in the previous year, thus registering a growth of 29%.

From a production point of view, the company registered a growth of 66% in terms of amount of steel converted into final product. The company sold a total of 634 cranes in FY11 against 519 cranes in the earlier year. These production figures ensure ElectroMech’s undisputed claim as the largest company in India once again in terms of volumes.

In FY11, ElectroMech made a significant leap ahead in terms of manufacturing and commissioning several higher capacity cranes (having SWLs in excess of 100MT). This puts ElectroMech firmly in the league of heavy crane manufacturers.

ElectroMech also successfully entered into strategic agreements with Shuttlelift of USA and Sibcranex of Russia. The association with Shuttlelift gives ElectroMech access to a new product basket of Rubber Tired Gantry cranes for industrial applications having SWLs upto 1000T. The association with Sibcranex, paves ElectroMech’s entry into the club of high technology cranes used in Metallurgy, Power and Process industries.

Hence ElectroMech now enjoys the unique distinction of being the ONLY crane company in India having product range spanning from as low as 80kg (ABUS Chain hoists) to 100,000 kg (Shuttlelift RTGs).

However, the margins continued to be under significant pressure in FY11 leading to a reduction in the PAT by 76% as compared to that of last year (Rs. 24.800 Millions in FY 11 vs. Rs.106.700 Millions in FY10).

On the other hand, on a very positive note that reaffirms ElectroMech’s position as the leader in the Indian Industrial Cranes industry, Motilal Oswal Private Equity decided to invest USD 10Mn in the ElectroMech growth story. This investment puts ElectroMech on an extremely firm financial footing to explore various growth areas aggressively.

In FY12, ElectroMech looks set to reverse the falling trend and the year ahead looks promising in terms of prospects and newer grounds to be covered.

CONTINGENT LIABILITIES:

Guarantees given by Company’s Bankers on behalf of the Company, towards performance and other matters, amounting to Rs.175.712 Millions (Previous year Rs.187.623 Millions)

BANKERS CHARGES REPORT AS PER REGISTRY

Corporate identity number of the company	U31109MH1996PTC099346
Name of the company	ELECTROMECH MATERIALS HANDLING SYSTEMS (INDIA) PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	Plot No. 1, Gate No. 316, At P Kasar Amboli, Tal Mulshi, District Pune – 412111, Maharashtra, India E-mail : cranes@emech.in
This form is for	Modification of charge
Charge identification (ID) number of the charge to be modified	90093359
Type of charge	· Immovable property · Book debts · Movable property (not being pledge) · Floating charge · Others (Stock, Equipment spares etc.)
Particular of charge holder	State Bank of India, Industrial Finance Branch, 2^nd Floor, Tara Chambers, Near Marri Mandir, Pune Mumbai Highway, Wekdewadi, Pune – 411003, Maharashtra, India Email: vasudeo.shegokar@sbi.co.in
Nature of instrument creating charge	No fresh Deed of Hypothecation or Mortgage Deed has been executed. However the State Bank of India has vide letter dated 8th February 2012 i.e. letter regarding the grant of individual limits within the overall limits of Rs.1068.000 Millions, which has been accepted by the Company. With this the earlier limit of Rs.1300.000 Millions has been reduced to Rs.1068.000 Millions.
Date of instrument Creating the charge	08.02.2012
Amount secured by the charge	Rs.1068.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest Cash Credit Limit-At 5.40% above BR, EPC/PCFC & EBD/EBR- As per SBI/ RBI guidelines from time to time, Term Loan-1- @ 7.5% above BR, Term Loan 2 and 3- @ 5.65% above BR, Corporate Loan- @ 6.15% above BR. Terms of repayment revolving. Margin (i) Raw Materials - 25%, (ii) Stocks in Process -33%, (iii) Finished Goods- 33%, (iv) any other (specify)EPC: 10% LC- 5% BG- 5%, (iv) Book Debts/ Receivables ( cover period 120 days) 25%.
Short particulars of the property charged (Including location of the property)	The entire fixed assets situated at Plot No. 1A&1B, Gat No. 316/1, Gat No. 316, 315 Industrial Zone At. Post Kasar Amboli Paud, Taluk- Mulshi, District -Pune- 411112, Maharashtra, India The entire fixed assets situated at No. 136 Thodukkudu Mathura Parankusampuram Village, Tiruvellore Taluk and District Comprised in S. No. 196/8. (Tamilnadu) The entire fixed assets situated at on lease hold land 16/1, F-II Block, MIDC, Pimpri, Pune- 411026, Maharashtra, India All other terms and conditions will remain unchanged.
Date of instrument modifying the charge	04.01.2010
Particulars of the present modification	No fresh Deed of Hypothecation or Mortgage Deed has been executed. However the State Bank of India has vide letter dated 8th February 2012 i.e. letter regarding the grant of individual limits within the overall limits of Rs.1068.000 Millions, which has been accepted by the Company. With this the earlier limit of Rs.1300.000 Millions has been reduced to Rs.1068.000 Millions.

FIXED ASSETS:

• Electrical Installation
• Factory Building
• Land
• Building
• Furniture and Fixture
• Plant and Machinery
• Office Equipment
• Vehicle
• Computer

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.86.88
Euro	1	Rs.69.88

INFORMATION DETAILS

Information Gathered by :	SBA
Report Prepared by :	BSN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
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	NO
--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		45

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.