MIRA INFORM REPORT

Report Date :

24.05.2012

IDENTIFICATION DETAILS

Name :	BONAI INDUSTRIAL COMPANY LIMITED
Registered Office :	At-Main Road, Po-Barbil, Keonjhar - 758035, Orissa
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	06.10.1939
Com. Reg. No.:	15-000246
Capital Investment / Paid-up Capital :	Rs.76.693 Millions
CIN No.: [Company Identification No.]	U14109OR1939PLC000246
TAN No.: [Tax Deduction & Collection Account No.]	BBNB00067E
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturers of Iron Ore and Manganese Ore
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

A (63)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 33000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track. Directors are reported as experienced and respectable businessmen. Trade relations are fair. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – 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 :	At-Main Road, Po-Barbil, Keonjhar - 758035, Orissa, India
Tel. No.:	91-6767-275221/ 277441/ 277481
Fax No.:	91-6767-276161
E-Mail :	rungtas@satyam.net.in accounts@rungtamines.com

DIRECTORS

As on: 30.09.2011

Name :

Mr. Nand Lal Rungta

Designation :

Director

Address :

Rungta House, Chaibasa (West), Singhbhum – 833201, Jharkhand, India

Date of Birth/Age :

05.04.1950

Date of Appointment :

15.10.1984

DIN No.:

00114135

Other Directorships :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U45201OR1958NPL008546	EASTERN ZONE MINING ASSOCIATION	Director	03-08-79	03-08-79	13-11-09	Active	NO
2	U10200WB1964PTC026218	FEEGRADE AND COMPANY PRIVATE LIMITED	Director	05-01-83	05-01-83	-	Active	NO
3	U14109OR1939PLC000246	BONAI INDUSTRIAL COMPANY LIMITED	Director	15-10-84	15-10-84	-	Active	NO
4	U26911WB1962PLC025691	RUNGTA MINES LIMITED	Managing director	01-04-07	07-01-85	-	Active	NO
5	U02005WB1943PTC011231	RUNGTA SONS PRIVATE LIMITED	Director	08-03-87	08-03-87	-	Active	NO
6	U65993WB1940PLC010354	MINERALS AND METALS LIMITED	Director	26-06-92	26-06-92	-	Active	NO
7	U70101WB1951PTC019809	MANGILALL ESTATES PRIVATE LIMITED	Director	30-06-92	30-06-92	-	Active	NO
8	U24117OR1978PLC000753	ELECTROCHEM ORISSA LIMITED	Director	07-09-92	07-09-92	-	Active	NO
9	U51420OR1994PLC003707	BANSPANI IRON LIMITED	Managing director	16-09-94	16-09-94	-	Active	NO
10	U51909WB1951PLC019815	SHYAM SUNDAR LIMITED	Director	02-12-95	02-12-95	-	Active	NO
11	U26959ML2008PLC008300	JP CEMENTS LIMITED	Director	30-09-08	11-02-08	-	Active	NO
12	U26942ML2007PTC008248	KB CEMENTS PRIVATE LIMITED	Director	30-09-08	11-02-08	-	Active	NO
13	U85100OR2009NPL011422	EZMA FOUNDATION	Director	16-12-09	16-12-09	-	Active	NO
14	U92410JH2012NPL000254	COUNTRY CRICKET CLUB	Director	07-03-12	07-03-12	-	Active	NO

Name :

Mr. Mukund Rungta

Designation :

Director

Address :

Rungta House, Chaibasa (West), Singhbhum – 833201, Jharkhand, India

Date of Birth/Age :

14.01.1958

Date of Appointment :

27.06.1992

DIN No.:

00072640

Other Directorships :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U24117OR1978PLC000753	ELECTROCHEM ORISSA LIMITED	Director	08-08-84	08-08-84	-	Active	NO
2	U65993WB1940PLC010354	MINERALS AND METALS LIMITED	Director	05-09-85	05-09-85	-	Active	NO
3	U51909WB1951PLC019815	SHYAM SUNDAR LIMITED	Director	26-06-92	26-06-92	-	Active	NO
4	U14109OR1939PLC000246	BONAI INDUSTRIAL COMPANY LIMITED	Managing director	26-02-11	27-06-92	-	Active	NO
5	U10200WB1964PTC026218	FEEGRADE AND COMPANY PRIVATE LIMITED	Director	29-06-92	29-06-92	-	Active	NO
6	U02005WB1943PTC011231	RUNGTA SONS PRIVATE LIMITED	Director	14-02-11	30-06-92	-	Active	NO
7	U26911WB1962PLC025691	RUNGTA MINES LIMITED	Director	07-02-11	30-06-92	-	Active	NO
8	U70101WB1951PTC019809	MANGILALL ESTATES PRIVATE LIMITED	Director	30-06-92	30-06-92	-	Active	NO
9	U51420OR1994PLC003707	BANSPANI IRON LIMITED	Director	26-10-02	26-10-02	-	Active	NO
10	U26959ML2008PLC008300	JP CEMENTS LIMITED	Director	30-09-08	08-02-08	-	Active	NO
11	U26942ML2007PTC008248	KB CEMENTS PRIVATE LIMITED	Director	30-09-08	08-02-08	-	Active	NO

Name :

Mr. Siddharth Rungta

Designation :

Director

Address :

Rungta House, Chaibasa (West), Singhbhum – 833201, Jharkhand, India

Date of Birth/Age :

15.07.1977

Date of Appointment :

30.04.2005

DIN No.:

00112057

Other Directorships :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U26911WB1962PLC025691	RUNGTA MINES LIMITED	Director	07-02-11	03-07-01	-	Active	NO
2	L67120WB1993PLC057677	ORISSA SECURITIES LIMITED	Director	12-11-01	12-11-01	-	Active	NO
3	U51909WB1951PLC019815	SHYAM SUNDAR LIMITED	Director	04-02-02	04-02-02	-	Active	NO
4	U14109OR1939PLC000246	BONAI INDUSTRIAL COMPANY LIMITED	Director	30-04-05	30-04-05	-	Active	NO
5	U70101WB1951PTC019809	MANGILALL ESTATES PRIVATE LIMITED	Director	03-05-05	03-05-05	-	Active	NO
6	U10200WB1964PTC026218	FEEGRADE AND COMPANY PRIVATE LIMITED	Director	07-02-11	04-05-05	-	Active	NO
7	U65993WB1940PLC010354	MINERALS AND METALS LIMITED	Director	04-05-05	04-05-05	-	Active	NO
8	U02005WB1943PTC011231	RUNGTA SONS PRIVATE LIMITED	Director	04-05-05	04-05-05	-	Active	NO
9	U45203OR2006PLC008959	HARIDASPUR PARADIP RAILWAY COMPANY LIMITED	Nominee director	15-05-07	15-05-07	-	Active	NO
10	U26959ML2008PLC008300	JP CEMENTS LIMITED	Director	30-09-08	11-02-08	-	Active	NO
11	U26942ML2007PTC008248	KB CEMENTS PRIVATE LIMITED	Director	30-09-08	11-02-08	-	Active	NO
12	U10100JH2008PTC013329	C T MINING PRIVATE LIMITED	Nominee director	25-09-08	25-09-08	-	Active	NO
13	U10100WB2009PTC138134	MEDNIRAI COAL MINING PRIVATE LIMITED	Nominee director	01-09-09	01-09-09	-	Active	NO
14	U74899DL1969NPL005064	FEDERATION OF INDIA MINERAL INDUSTRIES	Director	28-10-09	28-10-09	-	Active	NO
15	U10100OR2010PTC011795	RADHIKAPUR (WEST) COAL MINING PRIVATE LIMITED	Nominee director	29-03-10	29-03-10	-	Active	NO
16	U74899WB1995PTC165878	HOLLY HOCK FARMS PRIVATE LIMITED	Director	14-06-11	26-07-10	-	Active	NO
17	U74899WB1995PTC165792	COLUMBINE FARMS PRIVATE LIMITED	Director	14-06-11	26-07-10	-	Active	NO
18	U85199WB1996PTC167219	ARAVALI HEALTH FARM PRIVATE LIMITED	Director	14-06-11	26-07-10	-	Active	NO

Name :

Mr. Mahesh Dutt Rustagi

Designation :

Director

Address :

Punjabi Para, Bhola Garage Road, District – Keonjhar, Barbil – 758035, Orissa, India.

Date of Birth/Age :

01.09.1940

Date of Appointment :

10.01.2008

DIN No.:

01219014

Other Directorships :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U51420OR1994PLC003707	BANSPANI IRON LIMITED	Director	25-06-97	25-06-97	-	Active	NO
2	U14109OR1939PLC000246	BONAI INDUSTRIAL COMPANY LIMITED	Director	04-02-08	10-01-08	-	Active	NO
3	U02005WB1943PTC011231	RUNGTA SONS PRIVATE LIMITED	Director	02-08-08	12-01-08	-	Active	NO
4	U10200WB1964PTC026218	FEEGRADE AND COMPANY PRIVATE LIMITED	Director	02-08-08	12-01-08	-	Active	NO
5	U26911WB1962PLC025691	RUNGTA MINES LIMITED	Whole-time director	12-01-08	12-01-08	-	Active	NO
6	U51909WB1951PLC019815	SHYAM SUNDAR LIMITED	Additional director	05-10-11	05-10-11	-	Active	NO

Name :

Mr. Ashutosh Mohanty

Designation :

Director

Address :

Rungta House, Chaibasa (West), Singhbhum – 833221, Jharkhand, India

Date of Birth/Age :

16.06.1972

Date of Appointment :

26.02.2011

DIN No.:

02219702

Other Directorships :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U10100JH2008PTC013329	C T MINING PRIVATE LIMITED	Nominee director	25-09-08	25-09-08	-	Active	NO
2	U10100WB2009PTC138134	MEDNIRAI COAL MINING PRIVATE LIMITED	Nominee director	01-09-09	01-09-09	-	Active	NO
3	U10100OR2010PTC011795	RADHIKAPUR (WEST) COAL MINING PRIVATE LIMITED	Nominee director	29-03-10	29-03-10	-	Active	NO
4	U14109OR1939PLC000246	BONAI INDUSTRIAL COMPANY LIMITED	Director	23-09-11	26-02-11	-	Active	NO
5	U60231WB1996PLC077174	MOBAR INDIA LIMITED	Additional director	11-05-11	11-05-11	-	Active	NO

Name :

Ms. Devi Ram Ojha

Designation :

Director

Address :

Po-Barajamda (West), Singhbhum – 833221, Jharkhand, India

Date of Birth/Age :

12.06.1940

Date of Appointment :

26.02.2011

DIN No.:

00762365

Other Directorships :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U45203OR2006PLC008590	KEONJHAR INFRASTRUCTURE DEVELOPMENT COMPANY LIMITED	Director	17-02-06	17-02-06	01-10-11	Active	NO
2	U27109WB2006PTC111689	RAISUAN STEEL PRIVATE LIMITED	Director	06-11-06	06-11-06	-	Active	NO
3	U14109OR1939PLC000246	BONAI INDUSTRIAL COMPANY LIMITED	Director	23-09-11	26-02-11	-	Active	NO

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 30.09.2011

Names of Shareholders	No. of Shares
Sitaram Rungta (HUF)	272000
Nandlal Rungta (HUF)	448000
Mukund Rungta (HUF)	354400
Nandlal Rungta	2296000
Mukund Rungta	2240000
Manju Rungta	178400
Preeti Rungta	192000
Siddharth Rungta	1670400
Shradha Rungta	16000
H. Gauntia	10
J. N. Mahapatra	5
A Mohanty	1795
J. N. Mishra and H. K. Mishra	10
MA Tulloch Holdings Private Limited, India	100
N. Boomin	100
N. Deo	10
P. Deo	15
Rabindra Nath Deo	20
P.M. Sahu	15
Total	7669280

Equity Share Break up (Percentage of Total Equity)

As on: 30.09.2011

Category	Percentage
Directors or relatives of Directors	99.97
Other top fifty shareholders	0.03
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers of Iron Ore and Manganese Ore

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Canara Bank, Jain Market, Sadar Market, Chaibasa – 833201, Jharkhand, India.

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2011	As on 31.03.2010
Rupee term loans banks secured	433.570	625.673
Foreign currency loans banks secured	383.298	0.000
Working capital loans banks secured	461.576	364.252
Total	1278.444	989.925
Unsecured Loan	As on 31.03.2011	As on 31.03.2010
Loans directors unsecured	0.000	0.078
Total	0.000	0.078

Banking Relations :
Auditors :
Name :	H. Naik and Company Chartered Accountants
Address :	Telenga Bazar, Cuttack-753009, Orissa, India
PAN.:	AACFH2449C
Relative Parties :	Rungta Sons Private Limited CIN No. U02005WB1943PTC011231 Feegrade and Company Private Limited CIN No. U10200WB1964PTC026218 Rungta Mines Limited CIN No. U26911WB1962PLC025691

CAPITAL STRUCTURE

As on: 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
50000000	Equity Shares	Rs.10/- each	Rs.500.000 Millions

Issued

No. of Shares	Type	Value	Amount
7669405	Equity Shares	Rs.10/- each	Rs.76.694 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
7669280	Equity Shares	Rs.10/- each	Rs.76.693 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		76.693	4.813	2.417
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		8240.272	4067.058	2720.957
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		8316.965	4071.871	2723.374
LOAN FUNDS
1] Secured Loans		1278.444	989.925	685.017
2] Unsecured Loans		0.000	0.078	0.078
TOTAL BORROWING		1278.444	990.003	685.095
DEFERRED TAX LIABILITIES		57.202	53.750	27.395
TOTAL		9652.611	5115.624	3435.864
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1152.119	1263.345	883.946
Capital work-in-progress		38.240	22.994	3.185
INVESTMENT		0.400	0.300	0.050
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	382.719	83.102	205.075
	Sundry Debtors	994.855	735.124	766.728
	Cash & Bank Balances	7297.458	3251.677	1880.566
	Other Current Assets	602.403	37.062	0.000
	Loans & Advances	189.935	74.412	463.280
Total Current Assets		9467.370	4181.377	3315.649
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	304.320	121.051	0.000
	Other Current Liabilities	700.936	189.368	766.506
	Provisions	0.262	41.973	0.855
Total Current Liabilities		1005.518	352.392	767.361
Net Current Assets		8461.852	3828.985	2548.288
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
GOODWILL		0.000	0.000	0.395
TOTAL		9652.611	5115.624	3435.864

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	14156.901	4607.075	2754.189
		Other Income	459.972	258.244	199.224
		TOTAL (A)	14616.873	4865.319	2953.413
Less	EXPENSES
		Consumption materials changes inventories	(127.045)	331.343
		Manufacturing service costs	1037.913	652.234
		Contract cost	15.209	8.362
		Employee related expenses	40.975	26.884
		Administrative selling other expenses	7102.909	1625.910
		TOTAL (B)	8069.961	2644.733	1787.262
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		6546.912	2220.586	1166.151
Less	FINANCIAL EXPENSES (D)		112.585	52.844	48.043
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		6434.327	2167.742	1118.108
Less/ Add	DEPRECIATION/ AMORTISATION (F)		154.434	120.644	100.700
	PROFIT BEFORE TAX (E-F) (G)		6279.893	2047.098	1017.408
Less	TAX (H)		2106.680	700.996	340.360
	PROFIT AFTER TAX (G-H) (I)		4173.213	1346.102	677.048
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		4067.058	2720.956	2044.577
	BALANCE CARRIED TO THE B/S		8240.271	4067.057	2720.956
	Earnings Per Share (Rs.)
	Basic		1804.44	2796.92	2801.42
	Diluted		544.15	2796.92	2801.42

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	28.55	27.67	22.94
Net Profit Margin (PBT/Sales)	(%)	44.36	44.43	36.94
Return on Total Assets (PBT/Total Assets}	(%)	59.14	37.60	24.23
Return on Investment (ROI) (PBT/Networth)		0.76	0.50	0.37
Debt Equity Ratio (Total Liability/Networth)		0.27	0.33	0.53
Current Ratio (Current Asset/Current Liability)		9.42	11.75	4.32

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report [Yes/No]
Year of Establishment	Yes
Locality of the Firm	Yes
Constitutions of the firm	Yes
Premises details	No
Type of Business	Yes
Line of Business	Yes
Promoters background	Yes
No. of Employees	No
Name of Person Contacted	No
Designation of contact person	No
Turnover of firm for last three years	Yes
Profitability for last three years	Yes
Reasons for variation <> 20%	-
Estimation for coming financial year	No
Capital the business	Yes
Details of sister concerns	Yes
Major Suppliers	No
Major Customers	No
Payment Terms	No
Export / Import Details [If Applicable]	No
Market Information	-
Litigations that the firm / promoter involved in	-
Banking Details	Yes
Banking Facility Details	Yes
Conduct of the banking account	-
Buyer visit details	-
Financials, if provided	Yes
Incorporation details, if applicable	Yes
Last accounts filed at ROC	Yes
Major Shareholders, if applicable	Yes

Bankers Charges Report as per Registry

Corporate identity number (CIN) or foreign company registration number of the company	U14109OR1939PLC000246
Name of the company	BONAI INDUSTRIAL COMPANY LIMITED
Address of the registered office or of the principal place of business in India of the company	At-Main Road, Po-Barbil, Keonjhar - 758035, Orissa, India E-mail: rungtas@satyam.net.in
This form is for	Modification of charge
Charge identification (ID) number of the charge to be modified	90082099
Type of charge	Book debts Floating charge
Particular of charge holder	Canara Bank, Jain Market, Sadar Market, Chaibasa – 833201, Jharkhand, India. E-mail: cb0247@canarabank.com
Nature of instrument creating charge	Supplemental Common Hypothecation Agreement NF 457 - Agreement for CDB/SDB/BE/ADVANCES NF 480 - Pronote
Date of instrument Creating the charge	11.01.2012
Amount secured by the charge	Rs.2375.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest PC/FDB - 10.75% (Floating) PCFC/BRD - LIBOR + 350 bps (Floating) BULC upto 90 days - Base Rate BULC above 90 days and upto 180 days - Base Rate + 0.75% Terms of Repayment Period of PCFC 90 days Margin PC/PCFC - 20% FLC - 20% FDB/BRD/BULC - NIL Extent and Operation of the charge PC/PCFC - Hypothecation of stock valued Rs.833.400 Millions (variable) as per stock statement of August, 2011. FDB/BRD - Hypothecation of receivables. FLC - Hypothecation of goods received under Foreign letter of credit.
Short particulars of the property or asset(s) charged (including complete address and location of the property)	PC/PCFC-Hypothecation of stock valued Rs.833.400 Millions (variable) as per stock statement of August, 2011. FDB/BRD-Hypothecation of receivables. FLC-Hypothecation of goods received under FLC.
Date of instrument modifying the charge	09.10.2010
Particulars of the present modification	Existing charge of Rs.1575.000 Millions comprising of PC/PCFC/FDB/BRD Limit of Rs.1000.000 Millions and FLC Limit of Rs.100.000 Millions and Term Loan of Rs.475.000 Millions now enhanced to Rs.2375.000 Millions comprising of PC/PCFC/FDB/BRD Limit of Rs.1500.000 Millions, FLC Limit of Rs.100.000 Millions, Term Loan of Rs.475.000 Millions and BULC Limit of Rs.300.000 Millions Present modification bring Rs.800.000 Millions

PERFORMANCE:

The year was a turnaround year. The Company achieved total sales turnover of Rs.14156.900 Millions a robust increase of 207% over previous year. Favorable economic conditions along with the Companys strategic decision to operate across domestic as well as foreign markets have yielded excellent results. Profit before Tax stood at Rs.6279.893 Millions for the year under review as compared to Rs.2047.098 Millions for the previous year representing an increase of 207%. Profit after Tax stood at Rs.4173.213 Millions for the financial year 2010-11 as compared to Rs.1346.102 Millions for the financial year 2009-10 representing an increase of 210%.

FIXED ASSETS:

• Land
• Building and Others
• Building and Others
• Computers and Printers
• Crusher and Screening Plant
• Electric and Pipe Line Fittings
• Labour Quarter and Hutting
• Lorries and Buses
• Magazine and Rest House
• Motor Cars and Vans
• Motor Cycle and Scooter
• Office Equipments
• Plant and Machinery
• Tele Communication Equipments
• Tractor
• Railway Rakes
• Washing Plant
• Furniture and Fixture

PRESS RELEASE:

Bonai Industrial Company Limited vs Commissioner Of Income-Tax, ... on 4 January, 1956

Equivalent citations: 1956 30 ITR 222 Orissa

JUDGMENT

MOHAPATRA, J. - This is a reference under section 66(1) of the Indian Income-tax Act, 1922, made by the Income-tax Appellate Tribunal, Madras Bench, in their order dated 16th July, 1954, referring the point of law which runs as follows :

"Whether in the facts and circumstances of the case, the assessee is entitled to the determination of the loss incurred in 1948-49 assessment year and to its set-off against the profits of the assessment year 1949-50."

2. The assessee is Bonai Industrial Company Limited, a public limited company incorporated in 1939, with its registered officer at Bonaigarh in the former Indian State of Bonai. The assessee-company was constituted with the main object of exploring and prospecting the mineral and forest resources of Bonai State. It is to be noted here that the company had only one source of income, that is to say, by carrying on business in the mineral and the forest resources. There were no mining operations in the account years ending on 31st March, 1947, and 31st March, 1948. The Income-tax Act of 1922 was adopted however by the Bonai State with effect from 1st April, 1944, by a notification of the Durbar of Bonai. In respect of the assessment year 1948-49, the State Income-tax Authorities issued a notice under section 22(2) of the Act, and the assessee-company filed a nil return with a covering letter stating that it suffered a gross loss of Rs.2,985-3-0 during the previous year. The Bonai State Income-tax Officer however passed the following order:

"On examining the books of account produced by him in support of the return filed by him, it is found that no profit was accrued to the Bonai Industrial Co., Ltd. in 1947-48. Hence, filed."

3. It is to be mentioned here that the present assessment year is 1949-50, the accounting year ending on 31st March, 1949. The Bonai State merged in the present State of Orissa under the States Merger (Governors Provinces) Order, 1949. By virtue of the Taxation Laws (Extension to Merged States and Amendment) Act, 1949 (Act No. LXVII of 1949) the Indian Income-tax Act, 1922, was made applicable to all the merged territories with effect from 1st April, 1949. The Income-tax Officer, Jharsuguda, who had jurisdiction over the area formerly known as Bonai State, issued a notice under section 22(2) of the Act on the assessee. The assessee filed a return declaring a loss of Rs.0.048 Million for the "previous year" ending on 31st March, 1949. The authorities however found as a matter of fact that the loss was never proved. The contention on behalf of the assessee before the Tribunal that the Income-tax authorities should set off against the profits of the previous year the loss of earlier years under the provisions of section 24(2) of the Act was therefore negatived.

4. The simple question therefore which arises for determination in the present case and is referred to us is "whether under section 24(2) of the Indian Income-tax Act, the assessee is entitled to set-off of the loss of the previous years as against the income of the year in question." The point seems to have been completely set at rest by a decision of their Lordships of the Supreme Court in the case of Anglo-French Textile Co. Ltd. v. Commissioner of Income-tax, Madras. Interpretation of the provisions of sub-sections (1) and (2) of section 24 of the Act arose very pertinently and directly before their Lordships of the Supreme Court who finally decided the point. It is the definite view of their Lordships that sub-section (2) must be read subject to the provisions of sub-section (1):

"Sub-section (1) provides that where an assessee sustains a loss of profits or gains in any year under any of the heads mentioned in section 6 he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year. Therefore, before any question of set off can arise, there must be (1) a loss under one or more of the heads mentioned in section 6, and (2) an income, profit or gain under some other head."

Their Lordships further observed:

"Next, a set-off under section 24(1) can only be claimed when the loss arises under one head and the profit against which it is sought to be set off arises under a different head. When the two arise under the same head, of course the loss can be deducted but that is done under section 10 and not under section 24(1). See the decision of the Privy Council in Rm. Ar. Ar. Rm. Arunachalam Chettiar v. Commissioner of Income-tax, Madras. In the present case, the loss is computed by striking a balance in the profit and loss account of just the one business and consequently no question of different heads arises. On both these grounds, therefore, the assessees contention must fail because unless the loss can be set off under sub-section (1) of section 24, it cannot be carried forward under sub-section (2) and if it cannot be carried forward the question of its determination and computation becomes irrelevant."

Section 6 enumerates the following heads of income:

(i) Salaries.

(ii) Interest on securities.

(iii) Income from property.

(iv) Profits and gains of business, profession or vocation.

(v) Income from other sources.

In the present case before us, the assessee has only one source of income, that is, profits and gains of business. The alleged loss also is in respect of the same business, and, as such, the decision of their Lordships of the Supreme Court fully answers the point which arises in the present case, that is to say, that the assessee is not entitled to a set-off of the loss, if any, in the previous years against the profits of the assessment year. Indeed, the provisions of section 24(2) has been subsequently amended by the Parliament to counteract the aforesaid decision of their Lordships of the Supreme Court; but it is conceded by the counsel of both parties that the said amendment is not retrospective and the present case is governed by the provisions of section 24 of the Act which were for interpretation by their Lordships of the Supreme Court.

5. I will further add that in view of the consistent finding of the Income-tax authorities and the Tribunal that the assessee has not been able to prove any loss during the previous years even thought sufficient opportunities were given to him, the determination of the question becomes were given to him, the question becomes academic. But as we have discussed above relying on the decision of their Lordships of the Supreme Court which is absolutely binding on us, we would answer the question in the negative, that is,

"The assessee is not entitled to the determination of the loss incurred in 1948-49 assessment year and to its set-off against the profits of the assessment year 1949-50."

6. The reference is accordingly answered. Hearing fee is assessed at Rs.100 (rupees one hundred).

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.55.93
UK Pound	1	Rs.88.15
Euro	1	Rs.70.88

INFORMATION DETAILS

Report Prepared by :

VRN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--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		63

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.