MIRA INFORM REPORT

Report Date :

20.09.2013

IDENTIFICATION DETAILS

Name :	SUNDARAM BRAKE LININGS LIMITED
Registered Office :	180, Anna Salai, Chennai – 600006, Tamilnadu
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	05.09.1974
Com. Reg. No.:	18-006703
Capital Investment / Paid-up Capital :	Rs.39.346 Millions
CIN No.: [Company Identification No.]	L34300TN1974PLC006703
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturing of Automotive, Non-automotive, Railway and Industrial Friction Materials.
No. of Employees :	1568 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (44)

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

Maximum Credit Limit :	USD 3672000
Status :	Satisfactory
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having a satisfactory track record. There appear some losses recorded by the company during 2013. However, general financial position seems to be good. 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 at usual trade terms and condition.

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 – March 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
India	A1	A1

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

INDIAN ECONOMIC OVERVIEW

We are living in a world where volatility and uncertainty have become the New Normal. We saw a change of government in countries like Tunisia, Egypt, Libya and Vietnam. Once powerful countries in Europe are now fighting for bankruptcy. We have taken growth in the developing part of the world for granted but economic growth in China and India has begun to slow. Companies that were synonymous with their product categories just a few years ago are now no longer in existence. Kodak, the inventor of the digital camera had to wind up its operations, HMV, the British entertainment retailing company and Borders, once the second largest bookstore have shut down due to their inability to evolve their business models with the changing time. Readers’ Digest, Thomson Register are no more !

There is another megatrend happening. The World order is changing as economic power shifts from West to East. According to McKinsey study, it took Britain more than 100 years to double its economic output per person during its industrial revolution and the US later took more than 50 years to do the same. More than a century later, China and India have doubled their GDP per capital in 12 and 18 years respectively. By 2020, emerging Asia will become the world’s largest consuming block, overtaking North America.

The years after the outbreak of the global financial crisis, the world economy continues to remain fragile. The Indian economy demonstrated remarkable resilience in the initial years of the contagion but finally lost ground last year. GDP growth slowed down. Currency has been weakening. There is a marked deceleration in agriculture, industry and services. Dampening sentiment led to a cut-back in investment as well as private consumption expenditure.  Inflation remained at high levels fuelled by the pressure from the food and fuel sectors. The large fiscal and current account deficit s continued to cause grave concern. It is imperative that India regains its growth trajectory of 8-9 % sooner than later. This is crucially important given the need to create gainful livelihood opportunities for the millions living in poverty as also the large contingent of young people joining the job market every year.

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	Non – fund based A-
Rating Explanation	Having strong degree of safety regarding timely payment of financial obligation. it carry lowest credit risk
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 :	180, Anna Salai, Chennai – 600006, Tamilnadu, India
Tel. No.:	Not Available
Fax No.:	Not Available
Website :	www.tvsbrakelinings.com
Factory 1 :	Padi, Chennai 600 050, Tamilnadu, India
Tel. No.:	91-44-42205300, 42205407
Fax No.:	91-44-42205572
E-Mail :	bl@tvssbl.com
Factory 2 :	TSK Puram - Plant I and II, Mustakurichi Post, Kamarajar District - 626 106, Tamilnadu, India
Tel. No.:	91-4566-250290 to 250295
Factory 3 :	Plant 4 and 5 - Mahindra World City (SEZ) Natham Sub-Post, Chengalpet Kancheepuram District - 603 002, Tamilnadu, India
Tel. No.:	91-44-47490005

DIRECTORS

As on: 31.03.2013

Name :	R Ramasubramanian
Designation :	President
Name :	Mr. K Mahesh
Designation :	Chairman and Managing Director
Name :	Mr. K Ramesh
Designation :	Director
Name :	Mr. T Kannan
Designation :	Director
Name :	Mr. P S Raman
Designation :	Director
Name :	Mr. Ashok V Chowgule
Designation :	Director
Name :	Mr. K S Ranganathan -
Designation :	Director
Name :	Mr. K S D Sambasivam
Designation :	Director
Name :	Mr. Krishna Mahesh
Designation :	Joint Managing Director

KEY EXECUTIVES

Name :	G R Chandramouli
Designation :	President (Marketing and Market Development)
Name :	S Ramabadran
Designation :	Financial Controller and Secretary and Compliance Officer
Audit Committee :	Ø T Kannan Ø P S Raman Ø Ashok V Chowgule Ø K S Ranganathan Ø K S D Sambasivam
	Ø
Shareholders' / Investors' Grievance Committee :	Ø P S Raman Ø K Mahesh Ø T Kannan Ø K S D Sambasivam

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 01.08.2013

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	880864	22.39
Bodies Corporate	1680873	42.72
Sub Total	2561737	65.11
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	2561737	65.11
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	110	0.00
Financial Institutions / Banks	50	0.00
Insurance Companies	22184	0.56
Sub Total	22344	0.57
(2) Non-Institutions
Bodies Corporate	78015	1.98
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	1123124	28.54
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	138602	3.52
Any Others (Specify)	10753	0.27
Clearing Members	10753	0.27
Sub Total	1350494	34.32
Total Public shareholding (B)	1372838	34.89
Total (A)+(B)	3934575	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)	3934575	0.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Automotive, Non-automotive, Railway and Industrial Friction Materials.

GENERAL INFORMATION

No. of Employees :

1568 (Approximately)

Bankers :

Ø State Bank of India, Industrial Finance Branch, Chennai 600 002, Tamilnadu, India

Ø Export-Import Bank of India UTI House, 29, Rajaji Salai Chennai - 600 001, Tamilnadu, India

Ø HDFC Bank Limited, ITC Centre, Anna Salai Chennai - 600 002, Tamilnadu, India

Facilities :

Secured Loan	31.03.2013 [Rs. in Millions]	31.03.2012 [Rs. in Millions]
Long Term Borrowing
Term Loan from Banks
From Export-Import Bank of India secured by exclusive charge on the movable and immovable fixed assets financed out of the Term Loan and a first charge on the land situated at Mahindra World City, SEZ, Kancheepuram District near Chennai and repayable in 20 quarterly instalments ending during 2016-17.	82.855	107.559
From State Bank of India, Industrial Finance Branch, Chennai secured by first charge on fixed assets created out of the Corporate Loan repayable in 16 quarterly instalments ending during March 2018.	45.000	0.000
Short Term Borrowing
Loans and Advances from a Bank: Cash Credit and Export Packing Credit from State Bank of India secured by first charge on present and future current assets and extension by way of second charge on other fixed assets – present and future (excluding vehicles)	253.641	271.491
Total	381.496	379.050

Banking Relations :	--
Statutory Auditors :
Name :	Sundaram and Srinivasan Chartered Accountants
Address :	No. 23, C.P. Ramaswamy Road, Alwarpet, Chennai 600 018, Tamilnadu, India
Cost Auditors :
Name :	Raman and Associates Cost Accountants
Address :	10, Muthukumaraswami Salai Off. 1 st Main Road, Baby Nagar Velachery, Chennai 600 042, Tamilnadu, India
Associates :	T V Sundram Iyengar and Sons Limited
Enterprise in which relatives of Key Management Personnel have significant interest :	Ø Alagar Farms Private Limited Ø Alagar Resins Private Limited

CAPITAL STRUCTURE

As on: 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares	Rs.10/- each	Rs.50.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
3934575	Equity Shares	Rs.10/- each	Rs.39.346 Millions

a) The Company has issued only one class of shares referred to as equity shares having a par value of Rs. 10/-.

b) Each holder of equity shares is entitled to one vote per share.

c) The Company declares and pays dividends in Indian Rupees.

d) Except interim dividend which is declared and paid based on the decision of the Board of Directors, all other dividends are proposed by the Board of Directors and paid on approval of the shareholders at the Annual General Meeting.

e) In the event of liquidation of the Company, the holders of equity shares will be entitled to receive any of the remaining assets of the company, after distribution of all preferential amounts. However, no such preferential amounts exist currently. The distribution will be in proportion to the number of equity shares held by the shareholders.

f) During the last five years immediately preceding the date of the Balance Sheet, the Company has not issued any shares as bonus shares or without payment being received in cash nor has bought back any shares

g) Following are the shareholders holding more than 5% equity shares and the number of equity shares held by each of them:

Name of the Shareholder	31.03.2013
	No. of shares held	% of total shares
T V Sundram Iyengar and Sons Limited	552955	14.05
Southern Roadways Limited	478500	12.16
Mahesh K	395842	10.06
Sundaram Industries Limited	253835	6.45

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	39.346	39.346	39.346
(b) Reserves & Surplus	878.735	922.815	930.888
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	918.081	962.161	970.234
(3) Non-Current Liabilities
(a) long-term borrowings	127.855	107.559	104.095
(b) Deferred tax liabilities (Net)	115.637	117.237	134.476
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	7.415	6.234	5.076
Total Non-current Liabilities (3)	250.907	231.030	243.647
(4) Current Liabilities
(a) Short term borrowings	253.641	271.491	233.179
(b) Trade payables	230.162	192.235	168.105
(c) Other current liabilities	31.264	36.109	36.758
(d) Short-term provisions	69.241	72.504	102.951
Total Current Liabilities (4)	584.308	572.339	540.993
TOTAL	1753.296	1765.530	1754.874
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	860.323	879.844	852.214
(ii) Intangible Assets	0.000	0.000	0.000
(iii) Capital work-in-progress	0.480	0.480	0.000
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.001	0.001	5.251
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	32.044	29.541	34.937
(e) Other Non-current assets	0.000	0.809	3.101
Total Non-Current Assets	892.848	910.675	895.503
(2) Current assets
(a) Current investments	0.000	5.250	0.000
(b) Inventories	247.421	178.544	130.316
(c) Trade receivables	511.192	522.353	483.863
(d) Cash and cash equivalents	36.535	93.633	123.873
(e) Short-term loans and advances	65.300	55.075	121.319
(f) Other current assets	0.000	0.000	0.000
Total Current Assets	860.448	854.855	859.371
TOTAL	1753.296	1765.530	1754.874

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income	2321.822	2557.082	2375.150
		Other Income	5.282	6.735	13.400
		TOTAL	2327.104	2563.817	2388.550
Less	EXPENSES
		Cost of materials consumed	1207.990	1317.928	1232.783
		Changes in inventories of finished goods & work-in-progress	(77.064)	(18.535)	(0.712)
		Employee benefit expenses	343.287	333.758	280.023
		Other expenses	786.002	704.222	633.330
		TOTAL	2260.215	2337.373	2145.423
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		66.889	226.444	243.127
Less	FINANCIAL EXPENSES		29.981	38.639	27.059
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		36.908	187.805	216.068
Less/ Add	DEPRECIATION/ AMORTISATION		77.977	76.250	63.257
	PROFIT/(LOSS) bBEFORE EXTRA-ORDINARY ITEMS AND TAX		(41.069)	111.555	152.811
	EXTRA-ORDINARY ITEMS		0.000	123.123	70.000
	PROFIT/(LOSS) BEFORE TAX		(41.069)	(11.568)	82.811
Less	TAX		3.011	(17.214)	19.800
	PROFIT/(LOSS) AFTER TAX		(44.080)	5.646	63.011
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		56.453	65.091	66.672
Less	APPROPRIATIONS
		General Reserve – I	0.000	0.565	6.301
		General Reserve - II	0.000	0.000	40.000
		Dividend	0.000	11.804	15.738
		Tax on Dividend	0.000	1.915	2.553
	BALANCE CARRIED TO THE B/S		12.373	56.453	65.091
	EARNINGS IN FOREIGN CURRENCY
		FOB value of goods exported	834.203	834.120	808.504
		Exchange fluctuation on foreign currency A/c	5.138	17.089	13.879
	TOTAL EARNINGS		839.341	851.209	822.383
	IMPORTS
		Raw Materials	217.994	277.654	185.976
		Components, Spares Parts	4.464	0.480	--
		Capital Goods	0.000	4.850	--
	TOTAL IMPORTS		222.458	282.984	185.976
	Earnings/ (Loss) Per Share (Rs.)		(11.20)	1.44	16.01

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	(1.89)	0.22	2.64
Net Profit Margin (PBT/Sales)	(%)	(1.77)	(0.45)	3.49
Return on Total Assets (PBT/Total Assets}	(%)	(2.34)	(0.65)	(4.73)
Return on Investment (ROI) (PBT/Networth)		(0.04)	(0.01)	0.08
Debt Equity Ratio (Total Debt /Networth)		0.41	0.39	0.35
Current Ratio (Current Asset/Current Liability)		1.47	1.49	1.59

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	No
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	No
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

INDEX CHARGES:

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10205703	04/12/2010 *	175,000,000.00	EXPORT-IMPORT BANK OF INDIA	CENTRE ONE BUILDING, FLOOR 21, WORLD TRADE CENTRE, CUFFE PARADE, MUMBAI, MAHARASHTRA - 400005, INDIA	B04578183
2	10050009	18/08/2011 *	540,700,000.00	STATE BANK OF INDIA	NO.155, ANNA SALAI, CHENNAI, CHENNAI, TAMILNADU- 600002, INDIA	B73892754
3	90301978	26/03/1996	7,500,000.00	STATE BANK OF INDIA	INDUSTRIAL FINANCE BRANCH ANNA SALAI, MADRAS, TAMIL NADU - 600002, INDIA	-
4	90301766	26/03/1991	2,400,000.00	STATE BANK OF INDIA	INDUSTRIAL FINANCE BRANCH ANNA SALAI, MADRAS, TAMIL NADU - 600002, INDIA	-

* Date of charge modification

OPERATIONS:

The net sales for the year were lower at Rs 2325.200 millions as against Rs. 2557.100 millions in the previous year.

Main Challenges faced in the year:

1) The domestic market witnessed the decrease in the sales due to significant declines in vehicle sales especially in Heavy and Medium Commercial Vehicles Segment. Consequently the domestic turnover in 2012-13 was Rs.1429.700 millions as compared to Rs.1698.800 millions in 2011-12. Significant economic difficulty in Europe limited export growth potential to these markets

2) The limited flexibility of existing plant and machinery means that the 16% fall in Domestic turnover due to OE slowdown had a disproportionate effect on margins due to under recovery of Fixed Overheads.

3) The increase in spend for Power and Fuel was significantly higher @ 15.9% in 2012-13 when compared to 12.4% in 2011-12. This continued increase was caused by escalating scheduled and unscheduled interruptions in power supply, increase in power tariff, and increased diesel prices.

OUTLOOK FOR 2013-14

The Directors are cautiously optimistic about the outlook for 2013-14. With inflation showing signs of cooling and expectation of interest rates softening , the Automobile sector especially, commercial vehicles segment may perform better which may in turn contribute for better performance of the Company. The reopening of mines and the Governmental support for increased bus purchases are also expected to contribute to this performance.

MANAGEMENT DISCUSSION AND ANALYSIS

Industry and Company Trend:

Automobile industry's annual production volumes were 208.66 lakh units for the year 2012-13 as compared to 207.47 lakh units for the year 2011-12 indicating a growth of just 1 % in volumes and annual sales volumes were at 209.24 lakh units for year 2012-13 as compared to 206.61 lakh units for the year 2011-12 indicating a meager overall growth of 1 %.

During the year 2012-13 the Heavy commercial segment saw huge drop of 28 % in production volumes and 26% in sales volumes as compared to the previous year 2011-12 and the Light commercial segment also significantly dropped by 18 % in production volume and drop in sales volume by 14 % in 2012-13 as compared to the previous year 2011-12.

Passenger car segment had a marginal growth of 3% in production volumes and 2 % in sales volumes as compared to 2011 12. Two wheeler segments showed marginal increase in production volumes by 2% and sales volumes by 3% as compared to 2011-12.

The Automobile sector for the year 2012-13 had exports registering a growth of 10 % in passenger vehicles segment and registering a drop in sales of 2 % in two wheeler segment, 32 % in heavy commercial vehicle segment and 12 % in light commercial vehicles segment. Overall Export sales were down by 2% for the year 2012-13 as compared to the previous year 2011-12.

The company showed significant drop in sales during the year 2012-13 in the domestic OE segment by 23 % and aftermarket sales grew marginally by 1 % and exports grew by 4 % as compared to year 2011-12. The company also introduced a wider range of Disc pads for Passenger car market in the aftermarket segment and was able to have a wider range to cater to the disc brake pad business.

FIXED ASSETS:

Ø Land

Ø Building

Ø Plant and Equipment

Ø Furniture and Fixture

Ø Office Equipments

Ø Computers

Ø Vehicles

Ø Fees for Windows

Ø Software Application

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.61.75
UK Pound	1	Rs.99.56
Euro	1	Rs.83.55

INFORMATION DETAILS

Report Prepared by :

ANK

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	4
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	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	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		44

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

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.