MIRA INFORM REPORT

Report Date :

24.05.2013

IDENTIFICATION DETAILS

Name :	JOTINDRA STEEL AND TUBES LIMITED
Registered Office :	14/3, Mathura Road, Near Mewla Maharajpur Village, Sector 45,  Faridabad - 121003, Haryana
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	16.03.1970
Com. Reg. No.:	05-005240
Capital Investment / Paid-up Capital :	Rs. 53.538 Millions
CIN No.: [Company Identification No.]	L27104HR1970PLC005240
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer and Exporter of Electric Resistance Welded (ERW) Steel Tubes and Pipes.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (34)

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

Maximum Credit Limit :	USD 1000000
Status :	Moderate
Payment Behaviour :	Slow but Correct
Litigation :	Clear
Comments :	Subject is an established company having a moderate track record. The profitability of the company appears to be low. The external borrowing seems to be increasing over year’s However, trade relations are reported to be 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 – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

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

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	Has suspended its rating: B+ (Due to lack of information.)
Date	April, 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 :	14/3, Mathura Road, Near Mewla Maharajpur Village, Sector 45,  Faridabad - 121003, Haryana, India
Tel. No.:	91-129-2275721/ 2272416/ 2252356
Fax No.:	91-129-2275689
E-Mail :	jotindra@jotindra.com
Website :	http://jstltd.com/
Marketing Office :	204, Nilgiri Apartments, Barakhamba Road, New Delhi - 110001, India
Tel. No.:	91-11-45765500
E-Mail :	marketing@jstltd.com

DIRECTORS

As on : 31.03.2012

Name :	Mr. Vishnu Kumar Sureka
Designation :	Non Executive Director
Date of Birth/Age :	23.09.1950
Qualification :	Graduate
Name :	Mr. O. P. Bhardwaj
Designation :	Executive Director
Qualification :	B. Com
Name :	Mr. Akhil Kumar Sureka
Designation :	Executive Director
Date of Birth/Age :	08.10.1978
Name :	Mr. Deepak Kumar Garg
Designation :	Non Executive Director
Date of Birth/Age :	25.06.1977
Name :	Mr. S. J. S. Kamra
Designation :	Non Executive Director
Qualification :	B. Com
Name :	Mr. Kubolay Choudhary
Designation :	Non Executive Director
Date of Birth/Age :	08.03.1957
Qualification :	Mechanical Engineer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 31.03.2012

Category	No. of Shares	Percentage
Promoters	1824446	60.78
Persons acting in conceit	-	-
Mutual Funds and UTI	-	-
Banks, Financial Institution and Insurance Companies	950	0.03
FIFs	-	-
Private Corporate Bodies	820	0.03
Indian Public	1175700	39.16
NRIs/OBCs	-	-
Total	3001916	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Electric Resistance Welded (ERW) Steel Tubes and Pipes.

PRODUCTION STATUS (As on 31.03.2012)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Steel Pipes and Tubes	Tones	125000	125000	32068
Rings	Tones	NA	Not yet assessed	25606
M.S. Ingot	Tones	NA	Not yet assessed	1017

Note: Installed capacity shown above is determined by the company's technical officials on three shifts basis.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

• Standard Chartered Bank
• ICICI Bank Limited
• HDFC Bank Limited
• State Bank of Patiala
• Union Bank of India
• Indian Overseas Bank Limited

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2012	As on 31.03.2011
Term Loan
Standard Chartered Bank	17.904	32.482
ICICI Home Finance Limited	22.746	23.656
Intec Capital Limited	17.251	0.000
Equipment Loan
ICICI Bank Limited	6.197	0.000
HDFC Bank Limited	32.290	0.000
Auto Loans
HDFC Bank Limited	1.377	0.000
ICICI Bank Limited	1.068	0.951
Tata Capital Limited	0.199	0.000
Working Capital Loans
State Bank of Patiala	332.665	290.082
Union Bank of India	159.967	173.656
Total	591.664	520.827
a Term Loan from Standard Chartered Bank is secured against mortgage of Land and Building at 8, Boganvilla Avenue, West and Green, Rajokari, New Delhi (owned by M/s Vaishnodevi Properties Private Limited) and guaranteed by Directors of the Company. b Term Loan from ICICI Bank is secured against booking advance for Residential Flats and guaranteed by Directors of the Company. The loan is completely paid off during the year, c. (i)Term Loan from ICICI Home Finance (Balance as on 31.03.2012 of Rs. 11.989 Millions (previous year Rs. 12.377 Millions) is a joint loan in the name of M/s. Quality Synthetic Industries Limited and Shri Vishnu Kumar Sureka, where Jotindra Steel and Tubes Limited, is a Co-applicant. The loan is secured by way of equitable mortgage of Property at First Floor, Pramukh Plaza, Wing "A" Chakala Road, Chakala, Andheri (East), Mumbai owned by M/s. Quality Synthetic Industries Limited, and also personal guarantee of Mr.Akhil Kumar Sureka, Managing Director and Mr. Vishnu Kumar Sureka, Authorised Signatory of the said Company. (i) Term Loan from ICICI Home Finance (Balance as on 31.03.2012 of Rs.11.667 Millions (previous year 12.107 Millions) is a joint loan in the name of M/s. Bihariji Ispat Udyog Limitedand Shri Navneet Kumar Sureka, where Jotindra Steel and Tubes Limited, is a Co-applicant. The loan is secured by way of equitable mortgage of Property at First Floor, 2nd Portion, Pramukh Plaza, Wing "A" Chakala Road, Chakala, Andheri (East), Mumbai owned by M/s. Bihariji Ispat Udyog Limited., and also personal guarantee of Mr. Navneet Kumar Sureka, Managing Director and Mr.Vishnu Kumar Sureka, Authorised Signatory of the said Company. d The loan from Intec Capital Limited is secured against Exclusive lien hypothecation mark on the performa and invoices for purchase of Scaffolding and the personal guarantiee of Mr. Vishnu Kumar Sureka (Director) and Mr. Akhil Kumar Sureka (Managing Director).The Scaffolding purchased have been shown as Stock in Trade, for which exclussion from the banks having first charge on entire working Capital is pending. e The Auto Loans and Equipment Loans from HDFC Bank and ICICI Bank are secured against the hypothecation of the vehicles/Equipments financed by the said banks. a Working capital loans are secured by way of hypothecation of entire Current Assets of the Pipe Division (Faridabad and Hardwar Units) of the Company both present and future and first pari passu charge among State Bank of Patiala .Indian Overseas Bank and Union bank of India over the fixed assets of the company (excluding specific assets charged to other lenders) including A. Securities held with State Bank of Patiala (charge sharing on Pari-passu basis) (i) Equitable mortgage of a part of factory land and building at Plot No.14/3 Mathura Road, Faridabad measuring 24k 13m Approximately (ii) Plot no. C-152 situated at Prakash Industrial estate G.T. Road Ghaziabad in the name of M/S Sri Narayan Rajkumar Merchants Limited (iii) Three residential plot (a) F-203, F-204, (b) F-205 and (c) F-206 At Lakshay Deep building at Sant Nagar, New Delhi. In the name of M/S Chakra Exports Private Limited (iv) *Plot no.231 .Block B Okhala Ind. Area, New Delhi in the name of the company. (v) Equitable mortgage of factory land and building at plot no. 14/3 Mathura Road, Faridabad measuring 13Kanal and 19Marla in the name of the company B. Securities hand with UBI (charge sharing on Pari-passu basis) (i) Equitable mortgage of a part of factory land and building at plot no. 14/3 Mathura Road, Faridabad measuring 70K 9M. (ii) Equitable mortgage of land measuring 4060sq meters situated at Plot No.10, sec-3, SIDCUL, lndustrial Area, Haridwar in the name of company (iii) Pledge of 55193 shares of the company in the name of Promoter Directors of the company The above loan is also secured by the corporate guarantee of M/s Chakra Exports Private Limited and M/s Sri Narayan Raj Kumar Merchants Limited and also personal guarantee of Shri Navneet Kumar Sureka, Authorised Signatory and Shri Akhil Kumar Sureka, Shri Vishnu Kumar Sureka both directors of the Company. C. Securities hand with Indian Overseas Bank (charge sharing on Pari-passu basis) (i) Hypothecation of all the goods purchases/acquired under Letter of Credits (ii) Equitable mortgage of land measuring 4963.09 sq meters situated at Plot No. 200, Bulandshar Road, Industrial area, Site I , B.S. Road, Ghaziabad, Uttar Pradesh.

Banking Relations :	--
Auditors :
Name :	Salarpuria and Partners Chartered Accountants
Related Party where control exists :	Mauria Udyog Limited Sri Narayan Raj Kumar Merchants Limited Bihariji Ispat Udyog Limited Quality Synthetic Industries Limited Saroj Metal Works Private Limited Ram Forgings Private Limited Sri Narayan Steel Industries Private Limited Sureka Tubes Industries Private Limited Veshnoudevi Properties Private Limited V.K. Flats Private Limited Bihariji Fancy Fiber and Fabrics Limited JST Engineering Services Limited V L Estates Private Limited Akshi Exports' Private Limited Bhama Properties Private Limited P.D.Metal Industries Private Limited Udayanchal Leasing and Exports Limited Vee Em info centre Private Limited Chakra Exports Private Limited JST Solar Energy Private Limited JST Solar Vidyut Private Limited Bihariji infortech Private Limited S.K.D. Estates Private Limited Deepak Hotels Private Limited VL Land and Housing Private Limited G L Estates Private Limited Vee Kay Surgical Private Limited Magnum Products Private Limited

CAPITAL STRUCTURE

As on: 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
5500000	Equity Shares	Rs.10/- each	Rs. 55.000 Millions
3000000	Redeemable Preferential Shares	Rs.10/- each	Rs. 30.000 Millions
1500000	Convertible Preferential Shares	Rs.10/- each	Rs. 15.000 Millions
	Total		Rs. 100.000 Millions

Issued Capital :

No. of Shares	Type	Value	Amount
3005341	Equity Shares	Rs.10/- each	Rs. 30.053 Millions
3000000	Non-Cumulative Redeemable Preferential Shares	Rs.10/- each	Rs. 30.000 Millions
	Total		Rs. 60.053 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
3001916	Equity Shares	Rs.10/- each	Rs. 30.019 Millions
1000000	Non-Cumulative Redeemable Preferential Shares	Rs.10/- each	Rs. 10.000 Millions
1350000	Non-Cumulative Compulsorily Convertible Preference Shares	Rs.10/- each	Rs. 13.500 Millions
	Add: Amount paid on 3425 Equity Shares forfeited.		Rs. 0.019 Million
	Total		Rs. 53.538 Millions

Shareholders holding 5% or more of share hold

Particular	No. of Shares	% held
Vishnu Kumar Sureka	868593	28.93
Akhil Kumar Sureka	758626	25.27

Out of these 1350000 Preference Shares are redeemable at the option of the company at any time before expiry of 20 years from the date of allotment. These shares are redeemable at a premium of Rs.50/- per share.

On 26th October 2010 on 100% conscent of NRI allottes for alteration of Class of Preference shares from Non Cummulative Redeemable Preference Shares to Non- Cummulative Compulsorily Convertible Preference Shares.

On 29th November, 2010 the company at an Extra Ordinery Genera! Meeting as paased a Special Resolution to the above effect of alteration in Class of Shareholders

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011
SHAREHOLDERS FUNDS
1] Share Capital		53.538	53.538
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		248.175	232.991
4] (Accumulated Losses)		0.000	0.000
NETWORTH		301.713	286.529
LOAN FUNDS
1] Secured Loans		591.664	520.827
2] Unsecured Loans		258.833	165.440
TOTAL BORROWING		850.497	686.267
DEFERRED TAX LIABILITIES		26.999	22.228
TOTAL		1179.209	995.024
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		308.251	184.543
Capital work-in-progress		78.233	101.350
INVESTMENT		0.225	0.225
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	373.049	442.041
	Sundry Debtors	2275.647	1211.860
	Cash & Bank Balances	103.569	96.729
	Other Current Assets	52.705	36.249
	Loans & Advances	373.849	522.054
Total Current Assets		3178.819	2308.933
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1398.147	747.214
	Other Current Liabilities	948.125	818.188
	Provisions	40.047	34.625
Total Current Liabilities		2386.319	1600.027
Net Current Assets		792.500	708.906
MISCELLANEOUS EXPENSES		0.000	0.000
TOTAL		1179.209	995.024

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011
	SALES
		Revenue from operation	4559.619	4788.211
		Other Income	243.518	130.587
		TOTAL (A)	4803.137	4918.798
Less	EXPENSES
		Cost of Materials Consumed	2186.616	2654.990
		Purchase of Stock in Trade	2132.761	1794.874
		Changes in inventories of finished goods, Work in Process and Stock in Trade	(73.866)	7.786
		Employee Benefits Expenses	33.499	24.474
		Other Expenses	379.650	290.127
		TOTAL (B)	4658.660	4772.251
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		144.477	146.547
Less	FINANCIAL EXPENSES (D)		102.797	94.658
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		41.680	51.889
Less/ Add	DEPRECIATION/ AMORTISATION (F)		15.223	10.022
	PROFIT BEFORE TAX (E-F) (G)		26.457	41.867
Less	TAX (H)		11.272	19.681
	PROFIT AFTER TAX (G-H) (I)		15.185	22.186
	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		121.095	100.027
	BALANCE CARRIED TO THE B/S		135.105	121.095
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	693.248	464.833
	TOTAL EARNINGS		693.248	464.833
	IMPORTS
		Raw Materials	161.559	512.168
		Capital Goods	30.886	0.000
	TOTAL IMPORTS		192.445	512.168
	Earnings Per Share (Rs.)		5.06	7.39

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011
PAT / Total Income	(%)	0.32	0.45
Net Profit Margin (PBT/Sales)	(%)	0.58	0.87
Return on Total Assets (PBT/Total Assets}	(%)	0.76	1.68
Return on Investment (ROI) (PBT/Networth)		0.08	0.15
Debt Equity Ratio (Total Debt /Networth)		2.82	2.39
Current Ratio (Current Asset/Current Liability)		1.33	1.44

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	No
9]	Name of person contacted	No
10]	Designation of contact person	No
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)	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

PERFORMANCE OF THE COMPANY

Despite recessionary trend world over in steel industry in general and steel tubes and pipes in particular, the company has managed to sell, of course, at a lower margin the higher volume of product mix of steel items which compelled the company to reduce sale prices resulting reduction in the value of sales. Because of competition both in domestic as well as international market, the profit of the company remained at a lower level apart from adverse effect due to higher input costs such as increased rate of interest, increased cost of employees and rise in incidence of depreciation.

The above stated unfavourable factors being beyond the control of the company over-shadowed the efficiency of the management both at production as well as at marketing fronts. However, the company was able to avoid the losses due to constant revision in its policies both short term and long term for undertaking production as well as sale of product mix and selling price of export orders of API and large dia pipes. However, it may further be added that in spite of all efforts, the profitability of the company could not be improved on account of the unfavourable marketing and other external factors beyond the control of the company.

MANAGEMENT DISCUSSION AND ANALYSIS

Due to the downward revision in estimates of current year's growth in Indian economy having been made by the various Government agencies as well as the rating agency, the demand of steel items in general and steel tubes and pipes in particular both in domestic and international markets has decreased sharply since there has been slow down of economic activities particularly in infrastructure sector including housing which is the main consumer of steel products and steel tubes and pipes.

Keeping in view the above unfavourable conditions to be faced by the company in the days to come, the company has initiated various steps to maintain the existing sales level and also to improve the profitability of the company both by reducing cost (controllable) and improving production efficiency as well as sales realization.

UNSECURED LOAN

(Rs in Millions)

Particular	As on 31.03.2012	As on 31.03.2011
From Companies- Related Party	1.712	1.570
From Companies- Others- Interest Free	249.621	163.870
From Directors- Interest Free	7.500	0.000
Total	258.833	165.440

CONTINGENT LIABILITIES NOT PROVIDED FOR

(Rs in Millions)

Particular	31.03.2012	31.03.2011
(1) Letters of Guarantee issued by Banks	36.817	270.977
(ii) Letters of Credit issued by Banks	681.700	0.443
(iv) Sales Tax Demand Pending appeals	5.608	NIL
(v) Proportionate value of duty saved in terms of Letter of Undertaking given to Jt. Director General of Foreign Trade under EPCG Scheme, where export obligation can be completed in future years	NIL	NIL
(vi) Corporate Guarantee given for Body Corporate	3496.000	496.000
(vii) Claims against the Company not acknowledged as debts.	Amount unascertained	Amount unascertained

FIXED ASSETS

• Land (Freehold and Leasehold)
• Buildings
• Residential Flats
• Plant and Machinery
• Electrical Installations
• Furniture and Fixtures
• Refrigeration and Air Conditioners
• Office Equipments
• Laboratory Equipments
• Pollution Control Equipments
• Dies and Jigs
• Vehicles
• Commercial Vehicle

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 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] 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. 55.99
UK Pound	1	Rs. 84.19
Euro	1	Rs. 71.86

INFORMATION DETAILS

Report Prepared by :

UDS

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
--DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		34

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.