MIRA INFORM REPORT

Report Date :

01.02.2013

IDENTIFICATION DETAILS

Name :	KALLAM SPINNING MILLS LIMITED (w.e.f. 22.09.1994)

Formerly Known As :	KALLAM AGROS LIMITED

Registered Office :	N.H.-5, Chowadavaram, Guntur – 522 019, Andhra Pradesh

Country :	India

Financials (as on) :	31.03.2012

Date of Incorporation :	18.02.1992

Com. Reg. No.:	01-013860

Capital Investment / Paid-up Capital :	Rs. 68.511 millions

CIN No.: [Company Identification No.]	L18100AP1992PLC013860

TAN No.: [Tax Deduction & Collection Account No.]	HYDK01467E HYDK01653B

PAN No.: [Permanent Account No.]	AAACK9363M

Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchange.

Line of Business :	Manufacturer and Seller of Cotton Yarn.

No. of Employees :	337 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (36)

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

Maximum Credit Limit :	USD 1594000

Status :	Moderate

Payment Behaviour :	Slow but Correct

Litigation :	Clear

Comments :	Subject is an established company having a moderate track record. There appears drastic fall in its profitability during the current year. The external borrowing of the company appears to be huge which may impact the liquidity position of the company. However, trade relations are reported to be fair. Business is active. Payments are 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 – June 30, 2012

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

India

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	BB (long Term Rating)
Rating Explanation	Having moderate risk of default regarding timely servicing of financial obligation.
Date	March 2012

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office/ Factory 1 (Spinning Unit) :	N.H.-5, Chowadavaram, Guntur – 522 019, Andhra Pradesh, India
Tel. No.:	91-863-2344010/ 2344017/ 2344015/ 2512004/ 2512005/ 2512006
Fax No.:	91-863-2344000
E-Mail :	kallamsp@sancharnet.in kallamsp@gmail.com admin@ksml.in
Website :	http://www.ksml.in

Factory 2 (Power Plant) :	Kotha Kothur Village, Nelakondapalli Mandal, Khammam District Andhra Pradesh, India

DIRECTORS

As on 22.09.2012

Name :	Mr. Venkateswara Reddy Poluri
Designation :	Managing director
Address :	4^th Floor, Flot No.401, Lakshmi Grand Apartments, Syamalanagar, Guntur – 522006, Andhra Pradesh, India
Date of Birth/Age :	16.04.195
Date of Appointment :	28.09.2002
DIN No.:	00018677

Name :	Mr. Venkata Krishna Reddy Gurram
Designation :	Managing director
Address :	4^lh Floor, Flot No.405, Krishal County, 12^th Line, Syamalanagar, Guntur – 522006, Andhra Pradesh, India
Date of Birth/Age :	11.09.1957
Date of Appointment :	28.09.2002
DIN No.:	00018713

Name :	Mr. Haranadha Reddy Kallam
Designation :	Director
Address :	D.No-2-14-133, 2^nd Line, Syamalanagar, Guntur – 522006, Andhra Pradesh, India
Date of Birth/Age :	01.11.1936
Date of Appointment :	25.05.2005
DIN No.:	00018666

Name :	Mr. Venkata Subba Reddy Movva
Designation :	Whole-time director
Address :	2^nd Floor, Lakshmi Grand Apartments, Syamalanagar, Guntur – 522006, Andhra Pradesh, India
Date of Birth/Age :	09.08.1957
Date of Appointment :	25.09.1999
DIN No.:	00018719

Name :	Ms. Krishna Murthy Araveti
Designation :	Director
Address :	2^nd Line, Devapuram, Guntur – 522002, Andhra Pradesh, India
Date of Birth/Age :	01.07.1941
Date of Appointment :	29.10.2005
DIN No.:	00018725

Name :	Mr. Surya Narayana Murthy Vaddadi
Designation :	Director
Address :	D.No-1-1, Essar Apartments West Maredpally, Secunderabad Ranga Reddy, Guntur – 500026, , Andhra Pradesh, India
Date of Birth/Age :	30.11.1939
Date of Appointment :	27.10.2001
DIN No.:	00021952

Name :	Mr. Ramchand Naik Mudhavath
Designation :	Director
Address :	Flat-no. 303, D.No. 12/13/483/29, Acropollnest Apartment, Opposite Mahalakshmi Supermarket, Taranaka, Secunderabad Ranga Reddy, Guntur – 500017, Andhra Pradesh, India
Date of Birth/Age :	01.08.1939
Date of Appointment :	25.09.1999
DIN No.:	01628537

Name :	Mr. Pulla Rao Swargam
Designation :	Director
Address :	D.No.29-14-67, FlatNo-002, Saiprem Residency, Prakasham Road, Vijayawada – 520002, Krishna, Andhra Pradesh
Date of Birth/Age :	10.06.1945
Date of Appointment :	28.06.2008
DIN No.:	02360239

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2012

Names of Shareholders	No. of Shares	Percentage of Holding

(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	2617291	38.20
Any Others (Specify)	873982	12.76
Group Companies	873982	12.76
Sub Total	3491273	50.96
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	3491273	50.96
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	10000	0.15
Sub Total	10000	0.15
(2) Non-Institutions
Bodies Corporate	294198	4.29
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 millions	1564902	22.84
Individual shareholders holding nominal share capital in excess of Rs. 0.100 millions	1308736	19.10
Any Others (Specify)	181991	2.66
Non Resident Indians	180315	2.63
Clearing Members	1676	0.02
Sub Total	3349827	48.89
Total Public shareholding (B)	3359827	49.04
Total (A)+(B)	6851100	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	6851100	0.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Seller of Cotton Yarn.

Products :

Item Code No. (ITC Code)	520511
Product Description	Cotton Yarn
Item Code No. (ITC Code)	NIL
Product Description	Energy

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	As at 31.03.2011
a) Licenced Capacity :
(i) Spindles (Nos.)	52,000
(ii) Rotors	2,496
(iii) Power	4MW
(iv) Cotton Raw (Kappas) Ginned and Pressed	9,000Ton per year

b) Installed Capacity
(i) Spindles (Nos.)	52,000
(ii) Rotors	2,080
(ii) Power	4 MW
(iv) Cotton Raw (Kappas) Ginned and Pressed	7,600Ton

c) Production :
(i) Yarn (kgs.)	45,58,881
(ii) OE Yarn	30,21,607
(ii) Power Generation (KWH)	91,27,959

Notes:

1. Power Generation includes captive use of 56,59,226 KWH and 1,27,791 KWH surrendered to APTRANSCO towards Wheeling charges and 19,557 KWH surrendered to APTRANSCO towards Banking charges.

2. The installed capacities are as per certificate given by the managing Director on which the Auditors have relied.

GENERAL INFORMATION

No. of Employees :

337 (Approximately)

Bankers :

Axis Bank, Guntur Branch, 1^st Floor, PR Raju Plaza, 11-1-1, Guntur – 522 001, Andhra Pradesh, India
Bank of Baroda, Guntur Branch, Rajiv Gandhi Bhavan, Guntur – 522 004, Andhra Pradesh, India
Andhra Bank, Main Branch, Kolhapet, Guntur – 522 001, Andhra Pradesh, India
Indian Bank, Main Branch, Naaz Centre, Guntur – 522 001, Andhra Pradesh, India

Facilities :

Secured Loans	31.03.2012 Rs. In Millions	31.03.2011 Rs. In Millions
I. Long Term Loans:
(i) From Financial Institutions:
(a) Rupee Loan		22.900
(ii) From Banks:
a) Rupee Loan		919.642
Interest accrued and due on above (of the above Rs.65.792 millions falls due for payment in next year)		8.873
II. Short Term Loans :
a) Working Capital Loan from banks		330.672
Total	1323.600	1282.087


Banking Relations :	--

Auditors :
Name :	Brahmayya and Company Chartered Accountants
Address :	10-3-21, Sambasivapet, Guntur – 522 001, Andhra Pradesh, India

Cost Auditors :
Name :	P. Srinivas Cost Accountant
Address :	97/2rt, Vijaya Nagar Colony, Besides Masab Tank, Hyderabad – 500 057, Andhra Pradesh, India

Companies Controlled by Key Management Personnel/Relatives of Key Management Personnel :	v Kallam Agro Products and Oils Private Limited, Guntur v Kallam Brothers Cottons Private Limited, Guntur

CAPITAL STRUCTURE

As on 22.09.2012

Authorized Capital:

No. of Shares	Type	Value	Amount

10000000	Equity Shares	Rs. 10/- each	Rs. 100.000 millions

Issued, Subscribed & Paid-up Capital:

No. of Shares	Type	Value	Amount

6851100	Equity Shares	Rs. 10/- each	Rs. 68.511 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		68.500	68.511	68.511
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		329.900	323.946	198.308
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		398.500	392.457	266.819
LOAN FUNDS
1] Secured Loans		1323.600	1282.086	994.606
2] Unsecured Loans		21.200	21.904	22.472
TOTAL BORROWING		1344.800	1303.990	1017.078
DEFERRED TAX LIABILITIES		0.000	111.975	96.689
DEFERRED GOVERNMENT GRANTS		0.000	0.000	0.203

TOTAL		1743.300	1808.422	1380.789

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		1254.400	1130.743	868.870
Capital work-in-progress		57.800	11.503	89.086
Advance for capital works		0.000	0.000	29.256

INVESTMENT		0.000	0.003	0.003
DEFERRED TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	488.200	486.656	287.592
	Sundry Debtors	89.400	129.529	54.955
	Cash & Bank Balances	7.400	11.493	8.430
	Other Current Assets	0.000	0.896	0.582
	Loans & Advances	194.500	159.179	94.189
Total Current Assets		779.500	787.753	445.748
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	287.500	38.818	21.013
	Other Current Liabilities		9.590	3.569
	Provisions	60.900	73.172	27.592
Total Current Liabilities		348.400	121.580	52.174
Net Current Assets		431.100	666.173	393.574

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		1743.300	1808.422	1380.789

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	1519.710	1357.470	816.367
		Other Income	39.502	16.853	10.311
		TOTAL (A)	1559.212	1374.323	826.678

Less	EXPENSES
		Cost of Materials Consumed	1157.934	852.663
		Purchase of stock-in-trade	0.000	2.765
		Changes in inventories of finished goods, work-in-progress and stock-in-trade	(71.046)	(44.274)
		Employee benefit expenses	35.972	34.027
		Other expenses	242.196	197.840
		TOTAL (B)	1365.056	1043.021	638.883

Less	PROFIT/(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		194.156	331.302	187.795

Less	FINANCIAL EXPENSES (D)		123.801	74.823	60.175

	PROFIT/(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		70.355	256.479	127.620

Less/ Add	DEPRECIATION/ AMORTISATION (F)		69.240	56.690	48.656

	PROFIT/(LOSS) BEFORE TAX (E-F) (G)		1.115	199.789	78.964

Less	TAX (H)		(4.914)	59.992	18.318

	PROFIT/(LOSS) AFTER TAX (G-H) (I)		6.029	139.797	60.646

Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		NA	192.108	145.747

Less	APPROPRIATIONS
		Transfer to General Reserve	NA	NA	3.100
		Dividend	NA	NA	9.592
		Tax on Dividend	NA	NA	1.593
	BALANCE CARRIED TO THE B/S		NA	NA	192.108

	EARNINGS IN FOREIGN CURRENCY
		Sales (FOB Value )	NA	NA	91.977
	TOTAL EARNINGS		NA	NA	91.977

	IMPORTS
		Stores & Spares	NA	NA	1.248
		Capital Goods	NA	NA	55.429
		Raw Materials	NA	NA	0.000
	TOTAL IMPORTS		NA	NA	56.677

	Earnings/(Loss) Per Share (Rs.)		0.88	20.41	8.85

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2012	30.09.2012	31.12.2012
	1^st Quarter	2^nd Quarter	3^rd Quarter
Net Sales	447.300	377.500	489.100
Total Expenditure	369.900	303.900	397.400
PBIDT (Excl OI)	77.400	73.600	91.700
Other Income	2.100	24.800	1.200
Operating Profit	79.600	98.300	92.900
Interest	38.200	30.400	32.800
Exceptional Items	0.000	0.000	0.000
PBDT	41.300	67.900	60.100
Depreciation	20.200	17.300	18.900
Profit Before Tax	21.200	50.600	41.200
Tax	11.100	11.300	13.400
Provisions and contingencies	0.000	0.000	0.000
Profit After Tax	10.100	39.300	27.800
Extraordinary Items	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000
Net Profit	10.100	39.300	27.800

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	0.38	10.17	7.34

Net Profit Margin (PBT/Sales)	(%)	0.07	14.72	9.55

Return on Total Assets (PBT/Total Assets}	(%)	0.05	10.41	6.01

Return on Investment (ROI) (PBT/Networth)		0.00	0.51	0.30

Debt Equity Ratio (Total Debt/Networth)		3.37	3.32	3.81

Current Ratio (Current Asset/Current Liability)		2.23	6.47	8.54

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	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	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	Yes
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 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
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

Note:

The registered office of the company has been shifted from 2-14-133, 2^nd Linesyamala nagar, Guntur, Andhra Pradesh, India to the present address w.e.f. 29.01.2011

Unsecured Loans	31.03.2012 Rs. In Millions	31.03.2011 Rs. In Millions
Long Term Loans :
a) Sales Tax Deferment under Sales Tax Deferral Scheme from Andhra Pradesh State Government (of the above Rs.2.545 millions due for repayment in next year)		13.529
b) Teak Plantation Deposits		0.081
c) Loans from Promoters and their relatives (interest free)		2.909
d) Fixed Deposits from Directors (Interest free)		5.385
Total	21.200	21.904

CONTINGENT LIABILITIES NOT PROVIDED FOR

Particulars	31.03.2011 (Rs. in millions)	31.03.2010 (Rs. in millions)
i) Counter guarantees given to bank in respect of Bank guarantees and letter of credit issued in favour of various constituents.	70.568	14.202
ii) Estimated amounts of contracts remaining to be executed on Capital accounts, and not provided for.	36.695	51.372
iii) State levies on Electricity	3.738	3.734

BANKERS CHARGES REPORT AS PER REGISTRY

Corporate identity number of the company	L18100AP1992PLC013860
Name of the company	KALLAM SPINNING MILLS LTD
Address of the registered office or of the principal place of business in India of the company	N.H.5, Chowdavaram, Guntur – 522019, Andhra Pradesh, India e-mail : kallamsp@sancharnet.in
This form is for	Creation of charge
Type of charge	Immovable property Any interest in immovable property Movable property (not being pledge)
Particular of charge holder	BANK OF BARODA, Guntur Branch, Rajiv Gandhi Bhavan, Guntur - 522004, Andhra Pradesh, India e-mail: guntur@bankofbaroda.com
Nature of description of the instrument creating or modifying the charge	1. Sanction Letter 2. Term Loan Agreement 3. Memorandum of deposit of title deeds 4. Board Resolution
Date of instrument Creating the charge	09.03.2012
Amount secured by the charge	Rs. 99.000 millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest @2.50% above BR i.e. 13.25% p.a. with monthly rests Terms of Repayment Repayable in 32 graded quarterly installments as mentioned in the loan documents Margin 21.80% for the entire project Extent and Operation of the charge The charge operates as first charge on fixed assets of the Company's dyeing division (present and future) situated at S.No. 198/2, Kumkumbadu Village, Addanki Mandal, Prakasam Dt.
Short particulars of the property charged	EM of land admeasuring Ac. 1.50 cents situated at S.No. 198/2, Kumkumbadu V, Addanki Mandal, Prakasam Dt including buildings constructed thereon and plant and machinery erected therein

FIXED ASSETS:

Land
Factory Buildings
Non - Factory Buildings
Plant and Machinery
Electrical and Electronic Equipments
Borewelles and Water Pumps
Office and Other Equipment
Furniture and Fittings
Vehicles

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 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 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.84.22
Euro	1	Rs.72.23

INFORMATION DETAILS

Report Prepared by :

NID

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	4
--CREDIT LINES	1~10	4
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		36

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.

MIRA INFORM REPORT

0.38

0.07

0.05

0.00

3.37

2.23

Unit