MIRA INFORM REPORT

Report Date :

22.02.2014

IDENTIFICATION DETAILS

Name :	MOHANA COTTON GINNING PRIVATE LIMITED
Registered Office :	D.No.3-153, Garapadu (Post), Vatticherukuru (Mandal), Guntur District, Guntur- 522017, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	26.03.2013
Com. Reg. No.:	01-086614
Capital Investment / Paid-up Capital :	Rs. 51.100 Millions
CIN No.: [Company Identification No.]	U17291AP2013PTC086614
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer and Exporter of Raw Cotton
No. of Employees :	65 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (30)

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

Maximum Credit Limit :	USD 280000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is a successor of partnership concern established in the year October, 2010 as “Mohana Cotton Ginning”. Later on March 26, 2013 it got converted into private limited company. Mr. Vinayak, Chief executive officer provided complete information and confirmed about the conversion of legal status. As per previous, the subject has performed on an average basis and has achieved a decent profitability during 2012. However, trade relations are fair. Business is active. Payment terms are reported as 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 – December 1, 2013

Country Name	Previous Rating (30.09.2013)	Current Rating (01.12.2013)
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

The worst is over for India’s economy with gross domestic product likely to expand 5 %to 5.5 % this year and more than 6 % in 2015, according to Moody’s Analytics. Concerns over the rupee and current account deficit are under control, said the agency. Ratings firm Crisil has forecast 6 % growth for 2014/15 up from the estimated 4.8 % for 2013/14.  Total economic growth, infrastructure bottlenecks and lack of transparency and consistency in foreign direct investment policies seem to have taken a toll on India’s attractiveness as an investment destination, says an Ernst & Young survey.  Projects with FDI component fell 16.4 % across the globe in 2012 from the previous year.  The drop in India was steeper at 21 %. State run carrier Air India is doling out free tickets to its 24000 employees, even as it expects to incur a loss of Rs 39000 mn this financial year and has a debt of Rs 350000 mn. 550000 number of jobs generated across India in 2013, a fall of 0.4 % as compared to with a year earlier. The National Capital Region has a one-fourth share in total jobs created, according to a study by industry lobby group Assochem, Banks, real estate, automobile and telecommunications sectors are showing a rise of job creation. $ 805 mn investments by venture capital firms in India during 2013, registering a drop of about 18 % over the previous year. The Information Technology and IT-Enabled Services Industry retained its status as the favourable venture capital investors in 2013. Pakistan has temporarily banned gold imports for the second time in six months, as it tries to stem smuggling into India. India’s import duty on gold is 10 % and curbs on purchases have dried up legal imports into what used to be the world’s biggest bullion buyers. The World Gold Council puts the amount smuggled into India at upto 200 tonnes in 2013. The Reserve Bank of India has proposed that unclaimed bank deposits estimated to be about Rs 35000 mn be used for education and awareness among depositors.  According to the plan, deposits that have not been claimed for at least 10 years will be transferred to the scheme.

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long Term rating = B
Rating Explanation	High risk of default regarding timely servicing of financial obligations.
Date	05.03.2013

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.

INFORMATION PARTED BY

Name :	Mr. Manmohan
Designation :	Export Department
Contact No.:	91-08790911151
Date :	18.02.2014
Name :	Mr. Vinayak
Designation :	Chief Executive Officer

LOCATIONS

Registered Office / Factory / Admin / Warehouse :	D.No.3-153, Garapadu (Post), Vatticherukuru (Mandal), Guntur District, Guntur- 522017, Andhra Pradesh, India
Tel. No.:	91-863-2287516
Mobile No.:	91-08790911151 (Mr. Vinayak)
Fax No.:	91-863-2287518
E-Mail :	vinay@mohanaginning.com
Website :	www.mohanaginning.com
Area :	4 Acres
Location :	Owned

DIRECTORS

As on 26.03.2013

Name :	Mrs. Banda Shobha
Designation :	Director
Address :	D.No. 3-318, Vijayalakshmipuram, Bapatla - 522101, Andhra Pradesh, India
Date of Birth/Age :	19.071979
Qualification :	MBA
Date of Appointment :	05.04.2013
DIN No.:	06475958
Name :	Mr. Subrahamanyam Amuendi
Designation :	Managing Director
Address :	House No. 1-28-8, Abbaraju Vari Street, Nazar Peta, Ward No. 9, Tenali -523001, Andhra Pradesh India
Date of Birth/Age :	01.06.1950
Date of Appointment :	05.04.2013
DIN No.:	06423240
Name :	Mr. Naga Manjulatha Bhargavi Pitchoonoori
Designation :	Whole-Time Director
Address :	D. No. 2-81, 82, Flat. No. 507, Adarsh Grand Residency, Chaitanyapuri, Hyderabad – 500060, Andhra Pradesh, India
Date of Birth/Age :	23.08.1983
Date of Appointment :	05.04.2013
DIN No.:	06475964

KEY EXECUTIVES

Name :	Mr. Manmohan
Designation :	Export Department
Name :	Mr. Vinayak
Designation :	Chief Executive Officer

MAJOR SHAREHOLDERS

As on 26.03.2013

Names of Shareholders	No. of Shares	% of Holding
Banda Shoda	284100	55.60
Manda Vijaya Prasad	27850	5.45
Pathan Khadar	38420	7.52
Komaravolu Naga Manju Lalitha	32280	6.32
Pitchoonoori Naga Indira Priyadarsini	33890	6.63
Ammundi Subrahamanyam	16200	3.17
Mopidevi Aruna	28820	5.64
Y.V. Ramana Rao	27890	5.46
Kola Syam Badu	21550	4.22
Total	511000	100.00

As on 30.03.2013

Names of Allottee	No. of Shares Allotted
Banda Shoda	45000
Komaravolu Naga Manju Lalitha	35000
Mopidevi Aruna	6600
Ammundi Subrahamanyam	40000
Kola Syam Badu	5600
Manda Vijaya Prasad	6600
Pitchoonoori Naga Indira Priyadarsini	36000
Pathan Khadar Khan	7500
Y. venkata Ramana Rao	6500
Shakunthala Maniyar	100
I. Basavaiah	100
Total	189000

BUSINESS DETAILS

Line of Business :	Manufacturer and Exporter of Raw Cotton
Exports :
Products :	Finished Cotton
Countries :	Bangladesh Pakistan China
Terms :
Selling :	L/C / Cash / Credit (10 to 15 Days)
Purchasing :	Cash / Credit (10 to 15 Days)

GENERAL INFORMATION

Customers :	End Users
No. of Employees :	65 (Approximately)
Bankers :	Axis Bank, New Center Branch, Guntur, Andhra Pradesh, India State Bank of India, Commercial Bank, Gunter, Andhra Pradesh, India
Facilities :	Total Facility Rs.115.000 Millions (From State Bank of India)

Banking Relations :	---
Auditors :
Name :	CTI Veera Baba And Company Chartered Accountants

CAPITAL STRUCTURE

As on 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
750000	Equity Shares	Rs.100/- each	Rs.75.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
700000	Equity Shares	Rs.100/- each	Rs.70.000 Millions

MOHANA COTTON GINNING (Partnership Firm)

Partner’s Fixed Capital

Particular	Rs. In Millions
Banda Shoda	28.410
Manda Vijaya Prasad	2.785
Pathan Khadar	3.842
Komaravolu Naga Manju Lalitha	3.228
Pitchoonoori Naga Indira Priyadarsini	3.389
Ammundi Subrahamanyam	1.620
Mopidevi Aruna	2.882
Y.V. Ramana Rao	2.789
Kola Syam Badu	2.155
Total	51.100

Partner’s Current Capital

Particular	Rs. In Millions
Banda Shoda	5.165
Komaravolu Naga Manju Lalitha	3.958
Mopidevi Aruna	0.598
Ammundi Subrahamanyam	4.304
Kola Syam Badu	0.518
Manda Vijaya Prasad	0.587
Pitchoonoori Naga Indira Priyadarsini	4.244
Pathan Khadar Khan	0.702
Y.V. Ramana Rao	0.587
Total	20.663

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

MOHANA COTTON GINNING (Partnership Firm)

SOURCES OF FUNDS		31.03.2013
SHAREHOLDERS FUNDS
1] Partner’s Fixed Capital		51.100
2] Partner’s Current Capital		20.663
3] Reserves & Surplus		0.000
4] (Accumulated Losses)		0.000
NETWORTH		71.763
LOAN FUNDS
1] Secured Loans		134.280
2] Unsecured Loans		28.400
TOTAL BORROWING		162.680
DEFERRED TAX LIABILITIES		0.000
TOTAL		234.443
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		102.836
Capital work-in-progress		0.000
INVESTMENT		0.000
DEFERREX TAX ASSETS		0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	63.830
	Sundry Debtors	88.713
	Cash & Bank Balances	19.991
	Other Current Assets	9.585
	Loans & Advances	0.804
Total Current Assets		182.923
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	49.721
	Other Current Liabilities	1.206
	Provisions	0.389
Total Current Liabilities		51.316
Net Current Assets		131.607
MISCELLANEOUS EXPENSES		0.000
TOTAL		234.443

PROFIT & LOSS ACCOUNT

MOHANA COTTON GINNING (Partnership Firm)

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income	608.131	770.197	317.359
		Other Income	43.568	9.857	5.422
		TOTAL	651.699	780.054	322.781
Less	EXPENSES
		Cost of Goods Sold	565.140	758.764	301.846
		AMC Paid	1.114	0.000	0.000
		Commission and Brokerage	2.977	2.225	1.051
		Debit Note	4.584	0.822	2.826
		Freight	8.601	0.000	0.000
		Salaries and Other Benefits	2.615	0.028	0.373
		Power and Fuel	15.612	0.000	0.000
		VAT Paid	17.329	0.000	0.000
		Other Expenses	19.150	15.399	15.530
		TOTAL	637.122	777.238	321.626
	PROFIT BEFORE DEPRECIATION AND AMORTISATION		14.577	2.816	1.155
Less	DEPRECIATION/ AMORTISATION		10.831	0.403	0.138
	NET PROFIT		3.746	2.413	1.017

Expected Sales (2013-14): Rs. 750.000 Millions

The above information has been parted by Mr. Vinayak

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	0.62	0.31	0.32
Net Profit Margin (PBT/Sales)	(%)	0.62	0.31	0.32
Return on Total Assets (PBT/Total Assets}	(%)	1.31	NA	NA
Return on Investment (ROI) (PBT/Networth)		0.05	NA	NA
Debt Equity Ratio (Total Debt /Networth)		2.27	NA	NA
Current Ratio (Current Asset/Current Liability)		3.56	NA	NA

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	Rs. In Millions	Rs. In Millions	Rs. In Millions
Sales	317.359	770.197	608.131
		142.690	(21.042)

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	Rs. In Millions	Rs. In Millions	Rs. In Millions
Sales	317.359	770.197	608.131
Profit	1.017	2.413	3.746
	0.32%	0.31%	0.62%

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	Yes
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	Yes
10]	Designation of contact person	Yes
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	No
17]	Major suppliers	Yes
18]	Major customers	Yes
19]	Payments terms	Yes
20]	Export / Import details (if applicable)	Yes
21]	Market information	----------------------
22]	Litigations that the firm / promoter involved in	----------------------
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	----------------------
26]	Buyer visit details	----------------------
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
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

INDEX OF CHARGES: NO CHARGES EXIST FOR THE COMPANY

TRADE REFERENCES

• Sri Sai Vijay Laxmi Catton Mills
• Kohinoor Trxtile Mill, Pakistan

PRESS RELEASE:

COTTON PRICING BEST LEFT TO THE MARKET

The Government should not intervene at the behest of textile mills.

Prices of popular cotton varieties in India have spiked by 7-8 per cent in February-March 2013 due to bullishness of the domestic and overseas market. Textile mills are crying, “wolf” and seeking Government intervention to rein in this escalation. There are many stakeholders in cotton business — farmers, aggregators, ginners, traders, government trading entities such as Cotton Corporation of India (CCI) and NAFED, merchant exporters, mills, skilled and unskilled labour.

The supply-demand matrix and market volatility are inherently interwoven. High demand benefits producers when prices go up, and signals them to produce more. But it discounts interests of consumers in the short run. When demand diminishes, lower values discourage higher production by producers; they are eventually losers and consumers the beneficiaries - again in the short term.

Finally, the market finds its equilibrium, if allowed to operate freely. That is the way a commodity cycle runs. Therefore, any ad hoc Government intervention in its own policies can hamper the functioning of markets, which may not be fair to all stakeholders.

Higher MSP for farmers

The CACP’s (Commission for Agriculture Costs and Prices) kharif report of 2012-13 noted that “Despite record production, exports are booming and country has low stocks of cotton; akin to an excess demand situation. Market price during October 2011-February 2012 was Rs. 4362/quintal. So a high MSP will not have an inflationary impact”.

It, therefore, recommended and Government agreed to fix an MSP of Rs. 3600/quintal for medium staple (MS) and Rs. 3900/quintal for long staple which were 28.5 per cent (Rs 2800) and 18 per cent (Rs 3300/quintal) above last year’s MSP.

Ginned cotton output in 2012-13 was 33 million bales (of 170 kg each) against last year’s 35.3 million bales. Despite this price incentive, overall production dropped by two million bales, partly due to poor monsoons in Gujarat and Maharashtra. The textile industry accepted 18-28 per cent higher MSP (due to costlier fertiliser and farm labour) without a whimper but is now threatened by 7-8 per cent demand driven inflation!

A November 2, 2012, press release of the Ministry of Textiles stated “The Cotton Advisory Board has estimated consumption at 260 lakh bales and an exportable surplus at 70 lakh bales (on January 23, 2013, it estimated exportable surplus at 80 lakh bales). Although domestic consumption is showing increasing trends, the sharp decline in global trade and increase in world stocks have imposed a downward stress on cotton prices, which is reflected in Indian cotton markets also”. (emphasis added.)

Price stabilisation

The local market remained bearish and below MSP in October-November 2012. Mills stayed away anticipating further price decline for speculative profits; then, traders/exporters came to the rescue of falling prices and CCI/NAFED stepped in to cover 2.2 million bales at MSP.

The November 2 press statement also said “that price stabilisation operations would be taken up to alleviate farmer distress (emphasis added) both by Cotton Corporation of India and NAFED in coming months”. With progressive consumption, price stabilisation operations and exports on track, surpluses are now squeezed and market has logically ascended in February 2013.

Private industry and trade generally sermonise that Government should not be in the business of business. But at the drop of a hat, they see “God” in government and seek its intermediation for survival, citing local labour and its employment. Industry has now pleaded that stocks accumulated by CCI/NAFED be destocked at subsidised rates to cool the market.

Disposal by CCI

Going by the very concept of MSP, it is designed to help farmers rather than the industry. Cereals are bought at MSP by the Food Corporation of India to alleviate the risk of farmers. These cereals are then sold to the domestic trade and for export through domestic or international tenders or at Open Market Sale Scheme (OMSS) price at the absolute discretion of the Government for best price realisation.

Subsidised schemes for APL/BPL beneficiaries cannot be applied in the case of textile mills. For cotton, the same principle of disposal may be the guiding factor. CCI/NAFED may sell cotton domestically or for export through a tendered mechanism to industry and trade at a time when it can realise the best value. They also have the option of undertaking exports directly. Assuming that acquisition cost of Sankar 6 “ginned” variety by CCI is about Rs. 35000/candy (1candy=356 kg each) and is disposed at Rs. 39000/candy, the profitability is 11 per cent less its carrying cost.

If the market is poised for a bullish view due to likely tightness in US cotton crop for 2013-14, the profitability of CCI can be further augmented in coming months. After all, Sankar 6 variety had seen a high of Rs. 61000/candy in February/March 2011. An informed decision is needed to liquidate CCI inventory in a phased manner for optimising value realisation, rather than to destock all fibre en masse. Should policymakers succumb to the pressure of the mills and depress market prices suddenly, not only will CCI/NAFED nurse losses but farmers (still holding 7-8 million bales), ginners, stockists, and exporters will be wiped out. Lower production of Kapas may be seen in 2013-14 with elevated prices. If cotton market crashes, CCI could be left with contracted but un-lifted stocks by its buyers, compounding losses as in 2011-12.

Mills might have erred, but can cover their immediate requirements from the domestic market or through imports from African countries (Tanzania, Zambia, Zimbabwe, etc.). Imports will be foreign-exchange neutral due to higher export intensity of both cotton and yarn. The Government cannot underwrite potential losses of mills by underselling cotton cheaper.

Assistance to mills

In September 2012, the Ministries of Textiles and Finance gave a Rs. 35000-crore restructuring loan to mills to help them overcome their cash starvation; this was in the wake of the financial crisis in 2011 when world market plunged from $2/lb. to 88c/lb.

The RBI is reviewing the NPAs of some of these mills for financial accommodation extended in 2008-09. The Textile Upgradation Fund Scheme (TUFS) is already in place. The Government has attempted to bail out textile mills twice in the last five years.

The solution to the textile industry's woes is to usher in labour sector reforms, ensure constant availability of power, and do value addition towards fabrics/ garments. If China and Bangladesh can have a thriving garments industry by importing raw cotton from India, why can't India? Gujarat has announced a mantra of ‘farm to fibre to fabric to fashion to foreign’. The Rest of India needs to learn from that vision.

As for the macro policy environment, trading policies have made India the world’s second largest exporter of cotton (next to US) because all stakeholders are active participants.

There is no need to tinker with pre-defined policy, neither is it feasible to bend and mend with daily market volatility which shall remain in all commodities.

COTTON EXPORT REGISTRATIONS RISE ON HOPES OF CHINESE DEMAND

Chennai, Feb. 15:  

Cotton exports are showing signs of recovery with registrations for shipments jumping 20 lakh bales since the beginning of the year.

According to sources, registration for cotton exports has increased to 58 lakh bales from 38 lakh bales. However, cotton trade and analysts say that it may be less than 50 lakh bales only.

Sources said that exporters are now buying half of the two lakh bales (of 170 kg) that are arriving daily in the market. While the Cotton Corporation of India is procuring some 40,000 bales, domestic textile mills are buying 60,000 bales.

However, views of cotton prices looking are unanimous. Currently, the Shankar-6 variety that is in demand for exports is quoting at Rs. 35,000 for a candy of 356 kg.

“Till January end, 42-43 lakh bales had been registered for exports. Maybe, it could have touched 50 lakh bales,” said A. Ramani, a cotton trade analyst.

“We are not sure if so much would have been registered because if that is a case, we would be seeing unusual movement. That doesn’t seem to be happening,” said Anand Poppat, Secretary of Saurashtra Ginners Association.

Chinese import

Ramani said exporters could be buying ahead of the annual import quota that China would release soon after the Chinese New Year.

“China will be releasing an import quota of 682,000 tonnes under the tariff rate quota and Indian cotton could get a sizeable chunk of it,” Ramani said.

China has to compulsorily release the tariff quota under which cotton imports would be imposed with 1 per cent Customs duty.

“Otherwise in the normal course, China imposes 40 per cent duty,” said Poppat.

“Still Indian cotton is cheaper compared with the prices in the domestic market there,” he said.

Currently, cotton in Chinese domestic market costs around 19,000-20,000 yuan a tonne. In comparison, the landed cost of Indian cotton after paying the Customs duty is 17,000 yuan. “Besides, Pakistan and Bangladesh are seeking some 35 lakh bales. This is something that can keep prices firm,” Poppat said. Ramani said exporters to China are taking a calculated risk by buying stocks and moving it to bonded warehouses in China. “Some Chinese buyers with deep pockets have bought Indian cotton and moved them closer to their shores,” he said.

On the other hand, a sizeable quantity of cotton from the US has also been moved close to the Chinese shores.

“Export buying is keeping the market firm though there is no flare-up in prices,” Ramani said.

Chinese trick helps Indian spinners

There is also a shift in strategy by Chinese textile industry that has begun buying cotton yarn.

“This is because it is advantageous to import cotton yarn rather than raw cotton. The industry has to pay 13 per cent value-added tax in China for buying raw cotton. They need not pay for importing yarn,” said Ramani.

According to sources, spinning units here are making a margin of at least $1 a kg. “It may not be true in the case of all units. China is good at negotiating deals. They are buying 30s count yarn for $3.20 a kg against $5.60 a kg a few days ago,” Ramani said.

“Also, there is no duty on yarn imports in China,” said Poppat. The Chinese order is mainly helping only units to the north of the peninsula. “Power crisis in the South is affecting spinners,” Ramani said.

A spinning unit having captive power unit has to spend Rs. 20-30 a kg for a kg of yarn. Otherwise, it costs Rs. 4-5 a kg only.

“Mills in North India are definitely gaining from the yarn export,” Ramani said, adding, “exports are fantastic and volumes are excellent.”

Sources said that yarn exports could be a record one billion kg. Already, over 800 million kg have been exported. This is far higher than the 720 million kg in 2011 when the Centre imposed a ban on cotton yarn exports.

Besides, domestic support is helping spinning mills to run at 85-90 per cent capacity.

“In view of the brisk activity, consumption estimate of cotton may be raised by the Cotton Advisory Board,” said Ramani.

There is, however, one spot of bother. “The cloth market is yet to pick up,” said Ramani.

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] 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.62.16
UK Pound	1	Rs.103.44
Euro	1	Rs.85.27

INFORMATION DETAILS

Information Gathered by :	SVA
Report Prepared by :	NKT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		30

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.