MIRA INFORM REPORT

Report Date :

01.07.2014

IDENTIFICATION DETAILS

Name :	FINOLEX CABLES LIMITED
Registered Office :	26/27, Mumbai-Pune Road, Pimpri, Pune – 411 018, Maharashtra
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	05.06.1967
Com. Reg. No.:	11-016531
Capital Investment / Paid-up Capital :	Rs.305.900 millions
CIN No.: [Company Identification No.]	L31300MH1967PLC016531
TAN No.: [Tax Deduction & Collection Account No.]	PNEF00515E
Legal Form :	Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer of electrical and telecommunication cables.
No. of Employees :	1611 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (67)

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Status :	Good
Payment Behaviour :	Regular
Litigation :	Exist
Comments :	Subject is a well-established and reputed company having a fine track record. Financial position of the company seems to be sound. Trade relations are reported as fair. Business is active. Payment terms are reported to be regular. The company can be considered good for business dealings at usual trade terms and conditions.

NOTES :

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

INDIAN ECONOMIC OVERVIEW

NEWS

The economy grew 4.7 %in 2013/14, marking a second straight year of sub-5 % growth – the worst slowdown in more than a quarter of a century. The data was below an official estimate of 4.9 % annual growth and compared with 4.5 % in the last fiscal year. However, the current account deficit narrowed sharply to $ 32.4 billion at 1.7 % of gross domestic product, in 2013/14 from a record high of $ 98.8 billion or 4.7 %, the year before. A sharp fall in gold imports due to restrictions on overseas purchases and muted import of capital goods helped shrink the current account deficit.

Online retailer Flipkart has acquired fashion portal Myntra as it prepares to battle with the rapidly expanding India arm of the global e-commerce giant Amazon. The company raised $ 210 million from Russian Investment firm DST Global which has also invested in companies like Facebook, Twitter and Alibaba Group.

General Motors will start exporting vehicles from its Talegaon plant near Pune in the second half of 2014. GM was one of the few global carmakers that was using its India plant only for the domestic market.

Google has overtaken Apple as the world’s top brand in terms of value, according to global market research agency Millward Brown. Google’s brand value shot up 40 % in a year to $ 158.84 billion. The top 10 of the 100 slots were dominated by US companies.

Infosys lost another heavy weight when B G Srinivas, a board member put in his papers. He is the third CEO-hopeful to quit after Chairman N R Narayana Murthy’s return to the company – Ashok Vemuri and V Balakrishnan being the other two.While Vemuri went on to lead IGate, Balakrishnan joined politics.

Naresh Goyal – promoted Jet Airways posted biggest quarterly loss – Rs.2153.37 crore – in the three months ended March 31, mainly because it has been offering discounts to passengers to fill planes.

William S Pinckney – Chairman and CEO of Amway India was arrested by the Andhra Pradesh Police in connection with a complaint against the direct selling firm. This is the second time that he has been taken into custody. A year, ago the Kerala Police had arrested Pinckney and two company directors on charges of financial irregularities.

China has told its state-owned enterprises to sever links with American consulting firms after the United States charged five Chinese military officers with hacking US companies. China’s action which targets consultancies like McKinsey & Co. and the Boston Consulting Group, sterns from fears that the first are providing trade secrets to the US governments.

India has emerged as a country with some of the highest unregistered businesses in the world. Indonesia has the maximum number of shadow businesses, says a study of 68 countries by Imperial College Business School in London.

Pfizer has abandoned its attempt to buy AstraZeneca for nearly $ 118 billion after the latter refused an offer of 55 pounds a share.

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long Term Rating: AA+
Rating Explanation	High degree of safety and very low credit risk.
Date	October 16, 2013

Rating Agency Name	CRISIL
Rating	Short Term Rating: A1+
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	October 16, 2013

RBI DEFAILTERS’ LIST STATUS

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

EPF (Employee Provident Fund) DEFAILTERS’ 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 DECLINED BY

Name :	Mr. Pravin Kulkarni
Designation :	Senior Finance Officer
Date :	30.06.2014

LOCATIONS

Registered Office/ Corporate Office/ Factory 1 (Electrical Cables) :	26/27, Mumbai-Pune Road, Pimpri, Pune – 411 018, Maharashtra, India
Tel. No.:	91-20-27475963 (15 lines)/ 27506200
Fax No.:	91-20-27472239/ 27470344/ 27472224
E-Mail :	info@finolex.com sales@finolex.com dsilva_rg@finolex.com pudlik@finolex.com sv_joshi@finolex.com pravin_kulkarni@finolex.com
Website :	http://www.finolex.com
Factory 2 :	Optic Fibre Division Urse Taluka Maval, District Pune – 410 506, Maharashtra, India
Tel. No.:	91-2114-237003/ 4/ 5/ 6/ 7
Fax No.:	91-2114-237009
E-Mail :	sunil@finolex.com
Factory 3 :	Switches Division Gat No.344, Village Urse, Taluka Maval, District Pune – 410 506, Maharashtra, India
Tel. No.:	91-2114- 237021-2-3
Fax No.:	91-2114-237006
E-Mail :	MV_Rangwani@finolex.com
Factory 4 :	Goa (Electrical and Communication Cables) 117/L118, Verna Industrial Estate, Verna Salcette, Goa – 403 722, India
Tel. No.:	91-832-278202/ 3/ 4
Fax No.:	91-832-2783909
E-Mail :	ratnakar_barve@finolex.com
Factory 5 :	Goa (CCC Rod) S263/2A, Panjim - Belgaum Road, Usgaon -Tisk, Ponda Goa – 403 406, India
Tel. No.:	91-832-2344376/ 8/ 9
Fax No.:	91-832-2344140
E-Mail :	knarayanan@finolex.com
Factory 6 :	Urse (Electrical and Communication Cables) Taluka Maval, District Pune – 410 506, Maharashtra, India
Tel. No.:	91-2114-237026/ 27
Fax No.:	91-2114-237025
E-Mail :	pm_deshpande@finolex.com
Factory 7 :	Lighting Division (CFL) / Sheets Division Plot No.399, Village - Urse, Taluka - Maval, District Pune – 410 506, Maharashtra, India
Tel. No.:	91-2114-237035/ 237024
Fax No.:	91-2114-237025
E-Mail :	br_kambale@finolex.com svdeshpande@finolex.com
Factory 8 :	HVPC Urse, Pune Gat No.343, Village Urse, Taluka Maval, District Pune – 410 506, Maharashtra, India
Tel. No.:	91-2114-237001-5
Fax No.:	91-2114-237006
E-Mail :	amit_bakhle@finolex.com
Factory 9 :	Goa (Communication Cables) Plot No. L123/9A, Verna Industrial Estate, Verna Salcette, South Goa, India
Tel. No.:	91-832-2782002/ 3/ 4
Fax No.:	91-832-2783909
E-Mail :	YKG@finolex.com
Factory 10 :	Roorkee Plot Nos. K-1 and K-2, AIS Industrial Estate, Jatherdeva Hoond, Manglaur, Roorkee, Taluka Haridwar – 247 667, Uttarakhand, India
Tel. No.:	91-1332-224069
Tele Fax No.:	91-1332-224068
E-Mail :	yyredkar@finolex.com
Branch Office :	Located at: · Ahmadabad · Bangalore · Bhubaneshwar · Chandigarh · Chennai · Coimbatore · Goa · Guwahati · Indore · Jaipur · Kochi · Kolkata · Mumbai · New Delhi · Raipur · Secunderabad · Lucknow · Dharwad

DIRECTORS

AS ON 31.03.2013

Name :	Mr. P.P Chhabria
Designation :	Chairman
Address :	9, ICS Colony, Ganeshkhind Road, Pune – 411 007, Maharashtra, India
Name :	Dr. D.K. Chhabria
Designation :	Managing Director
Name :	Dr. H.S. Vachha
Designation :	Director
Name :	Mr. Atul C. Choksey
Designation :	Director
Name :	Mr. Sanjay K. Asher
Designation :	Director
Name :	Mr. P.G. Pawar
Designation :	Director
Name :	Mr. S.B Ravi (Pandit)
Designation :	Director
Name :	Mr. Pradeep R. Rathi
Designation :	Director
Name :	Mr. Adi. J. Engineer
Designation :	Director
Name :	Dr. V.G. Pai
Designation :	Director
Name :	Mr. M. Viswanathan
Designation :	Director Finance and Chief Financial Officer

KEY EXECUTIVES

Name :	Mr. R.G. D’Silva
Designation :	Company Secretary and Vice President (Legal)
Name :	Mr. Pravin Kulkarni
Designation :	Senior Finance Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.03.2014

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	7875300	5.36
Bodies Corporate	46966170	31.98
Sub Total	54841470	37.34
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	54841470	37.34
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	13258720	9.03
Financial Institutions / Banks	2963851	2.02
Foreign Institutional Investors	8419318	5.73
Sub Total	24641889	16.78
(2) Non-Institutions
Bodies Corporate	27083047	18.44
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	25980564	17.69
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	14305950	9.74
Sub Total	67369561	45.88
Total Public shareholding (B)	92011450	62.66
Total (A)+(B)	146852920	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	6086425	0.00
Sub Total	6086425	0.00
Total (A)+(B)+(C)	152939345	0.00

Shareholding of securities (including shares, warrants, convertible securities) of persons belonging to the category Promoter and Promoter Group

Sl. No.	Name of the Shareholder	Details of Shares held
		No. of Shares held	As a % of grand total
1	Pralhad Parsram Chhabria	1760400	1.15
2	Sunita Kishan Chhabria	1163400	0.76
3	Aruna Katara	1052850	0.69
4	Kishan Parsram Chhabria	950750	0.62
5	Deepak Kishan Chhabria	936750	0.61
6	Prakash Pralhad Chhabria	831850	0.54
7	Vijay Kishan Chhabria	539250	0.35
8	Hansika Hiya Prakash Chhabria	105000	0.07
9	Gayatri Prakash Chhabria	105000	0.07
10	Ritu Prakash Chhabria	95000	0.06
11	Amit Katara	87400	0.06
12	Amrita Katara	85400	0.06
13	Vini Deepak Chhabria	33750	0.02
14	Katara Mukesh Dolumal	31000	0.02
15	Radhika Deepak Chhabria	30000	0.02
16	Karan Vijay Chhabria	22500	0.01
17	Priya Vijay Chhabria	22500	0.01
18	Rishi Vijay Chhabria	22500	0.01
19	Orbit Electricals Private Limited	46956120	30.70
20	Katara Dental Private Limited	10050	0.01
	Total	54841470	35.86

Shareholding of securities (including shares, warrants, convertible securities) of persons belonging to the category Public and holding more than 1% of the total number of shares

Sl. No.	Name of the Shareholder	No. of Shares held	Shares as % of Total No. of Shares
1	Finolex Industries Limited	22187075	14.51
2	Anil R Chhabria	5146060	3.36
3	Franklin Templeton Mutual Fund A/c Franklin India	4236345	2.77
4	Life Insurance Corporation of India	2824234	1.85
5	Franklin India Smaller Companies Fund	1838484	1.20
6	Leela Ramchand Chhabria	1779600	1.16
7	Reliance Capital Trustee Co Limited A/c Reliance Div	1690873	1.11
8	Integrated Core Strategies Asia Pte Limited	1547014	1.01
	Total	41249685	26.97

Shareholding of securities (including shares, warrants, convertible securities) of persons (together with PAC) belonging to the category “Public” and holding more than 5% of the total number of shares of the company

Sl. No.	Name(s) of the shareholder(s) and the Persons Acting in Concert (PAC) with them	No. of Shares	Shares as % of Total No. of Shares
1	Finolex Industries Limited	22187075	14.51
	Total	22187075	14.51

Details of Depository Receipts (DRs)

Sl. No.	Type of Outstanding DR (ADRs, GDRs, SDRs, etc.)	No. of Outstanding DRs	No. of Shares Underlying Outstanding DRs	Shares Underlying Outstanding DRs as % of Total No. of Shares
1	Global Depository	6086425	6086425	3.98
	Total	6086425	6086425	3.98

BUSINESS DETAILS

Line of Business :

Manufacturer of electrical and telecommunication cables.

Products :

Item Code No. (ITC Code)	Product Description
85444919	Jelly Filled Telephone Cables
8544	Electrical Cables – Light Duty
8544	Electrical Cables – Heavy Duty
900110	Fibre Optic Cable
854420	Co-Axial Cables
854459	LAN Cables
3920	PVC Sheets
7407.10	Continuous Cast Copper Rods

PRODUCTION STATUS [AS ON 31.03.2011]

Particulars	Unit	Installed Capacity	Actual Production
Electrical Cables	TCKM	2467.97	1241.83 #
Communication Cables Optic Fibre Cables	KM	58000.00	37116.78
Other Communication Cables	TCKM	5648.00	634.61
PVC Sheets and Accessories	MT	2100.00	1331.70
Fibre	KM	150000.00	779736.33 *
Poly coated FRP Rod	KM	24000.00	19268.48
Continuous Cast Copper Rods	MT	60000.00	33419.75 @

Notes:

Installed capacities are certified by the Managing Director and relied upon by the Auditors

• # Equivalent tonnage 32,297 MT
• * Includes captive consumption of 668,730 Kms
• @ captive consumption of 21,906,538MT and Job Work done 0.00

5,000 TCKM of JFTC Capacity is interchangeable with 332 TCKM of Electrical Cable capacity.

GENERAL INFORMATION

No. of Employees :

1611 (Approximately)

Bankers :

• Central Bank of India
• Bank of Baroda
• BNP Paribas
• Citibank N.A.
• Corporation Bank
• HDFC Bank Limited
• ICICI Bank Limited.
• Standard Chartered Grindlays Bank
• State Bank of India
• The Bank of Nova Scotia
• Bank of India
• Standard Chartered Bank

Facilities :

Secured Loan	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Bonds / Debentures 9.10% 'M' Series Non-Convertible Debentures (500 Debentures of Rs.1.000 million each)	500.000	500.000
Term Loans from Banks
Indian Rupee Loan from bank	750.000	300.000
Foreign Currency Loan	180.900	339.100
SHORT - TERM BORROWINGS
From Banks in Foreign Currency
Packing credit (Cash Credit and Packing Credit from banks is secured by hypothecation of inventories and book debts. The Cash Credit is repayable on demand. Packing Credit and Buyers’ Credit are generally repayable within 180 days. As at the year end, there are no utilisation of Cash Credit and Packing Credit limits.)	0.000	203.500
Total	1430.900	1342.600

Notes:

LONG TERM BORROWINGS

Particulars	Tenor	Amount (Rs. in Million)	Repayment schedule
a) Debentures–M Series	5 years	500.000	Lumpsum on 24^th August, 2015
b) Rupee Term Loan from Bank	6 years	750.000	3 equal installments of Rs.250.000 millions each on 31^st December 2015, 31^st December 2016, 31^st December 2017
c) Foreign Currency Loan from Bank	5 years	361.000	2 equal installments of Rs.185.950 millions each on 6^th January 2014 and 6^th January 2015
d) Deferred Sales Tax Loan		23.100	Repayable in installments, last such installment being on 26^th April 2020

Security
a) Debentures–M Series	First pari-passu charge on the immovable properties of JFTC Goa Division and premises situated at Ahmedabad and Hyderabad.
b) Rupee Term Loan from Bank	Second / Subservient charge on the block of assets of the plant at Roorkee.
c) Foreign Currency Loan from Bank	Hypothecation of movable fixed assets located at CFL, HVPC plant.

Banking Relations :	--
Auditors :
Name :	B.K. Khare and Company Chartered Accountants
Address :	706/707, Sharda Chambers, 7^th Floor, New Marine Lines, Mumbai – 400 020, Maharashtra, India
Tel. No.:	91-22-22000607/7318/6360 91-22-66315835/36
Fax No.:	91-22-22003476
E-Mail :	info@bkkhareco.com
Cost Auditor :
Name :	Joshi Apte and Associates Cost Accountants
Solicitors :	Crawford Bayley and Company
Associates :	Finolex Industries Limited Finprop Advisory Services Limited Finolex Plasson Industries Limited
Joint Venture :	· Finolex J-Power System Private Limited · Corning Finolex Optical Fibre Private Limited
Enterprises over which Key Management Personnel and their Relatives exercise significance influence :	· Orbit Electricals Private Limited · Finolex Infrastructure Limited · Magnum Machines Limited

CAPITAL STRUCTURE

AS ON 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
235000000	Equity Shares	Rs.2/- each	Rs.470.000 millions
15000000	Unclassified Shares	Rs.2/- each	Rs.30.000 millions
	Total		Rs.500.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
152939345	Equity Shares	Rs.2/- each	Rs.305.900 millions

Reconciliation of the shares outstanding at the beginning and at the end of the reporting period

Equity Shares	As on 31.03.2013
	Number	Amount (Rs in Millions)
Balance at the beginning of the period	152939345	305.900
Issued during the year	--	--
Outstanding at the end of the year	152939345	305.900

Terms / rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs.2 per share. Each holder of Equity Shares is entitled to one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of Interim dividend.

During the year ended 31^st March 2013, the amount of per share dividend recognised as distributions to the equity shareholders is Rs.1.20 per share.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of Equity Shares held by the shareholders.

Shares held by holding/ultimate holding company and/or their subsidiaries/associates

There are no shares held by holding/ultimate holding company and/or their subsidiaries/associates.

Details of shareholders holding more than 5% shares in the Company

	As on 31.03.2013
Equity Shares	Number of shares	%
Finolex Industries Limited	22187075	14.50
Life Insurance Corporation of India	7749398	5.10
Orbit Electricals Private Limited	46843120	30.60

Aggregate number of Bonus Shares issued, Shares issued for consideration other than cash and Shares bought back during the period of five years immediately preceding the reporting date.

There are no Bonus Shares issued, Shares issued for consideration other than cash and Shares bought back during the period of five years immediately preceding the reporting date.

Terms of securities issued with conversion option into Equity / Preference Shares

There are no securities issued with conversion option into Equity/Preference Shares

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	305.900	305.900	305.900
(b) Reserves & Surplus	8937.300	7698.400	6868.900
(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)	9243.200	8004.300	7174.800
(3) Non-Current Liabilities
(a) Long-term borrowings	1451.500	1162.200	970.400
(b) Deferred tax liabilities (Net)	344.700	326.100	310.400
(c) Other long term liabilities	13.600	1.800	0.000
(d) Long-term provisions	528.300	342.100	536.000
Total Non-current Liabilities (3)	2338.100	1832.200	1816.800
(4) Current Liabilities
(a) Short term borrowings	171.100	383.200	291.900
(b) Trade payables	632.900	563.800	306.900
(c) Other current liabilities	1391.200	1189.900	2443.400
(d) Short-term provisions	264.900	187.100	162.400
Total Current Liabilities (4)	2460.100	2324.000	3204.600
TOTAL	14041.400	12160.500	12196.200
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	4120.700	4291.900	4032.900
(ii) Intangible Assets	0.400	0.400	0.400
(iii) Capital work-in-progress	357.300	120.200	187.600
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	2173.900	2188.800	2090.300
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	166.500	40.200	142.900
(e) Other Non-current assets	190.800	121.000	0.000
Total Non-Current Assets	7009.600	6762.500	6454.100
(2) Current assets
(a) Current investments	1067.000	183.300	361.200
(b) Inventories	3296.300	2811.400	2808.400
(c) Trade receivables	1496.500	1140.900	1302.400
(d) Cash and cash equivalents	398.100	490.000	212.900
(e) Short-term loans and advances	771.800	772.400	1051.600
(f) Other current assets	2.100	0.000	5.600
Total Current Assets	7031.800	5398.000	5742.100
TOTAL	14041.400	12160.500	12196.200

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Revenue from Operations (Net)	22706.800	20641.600	20357.500
		Other Income	241.700	319.900	260.900
		TOTAL (A)	22948.500	20961.500	20618.400
Less	EXPENSES
		Cost of Materials Consumed	17129.200	15769.500	16365.900
		Purchase of Stock-in-Trade	60.400	24.000	23.800
		(Increase) / Decrease in Inventories of Finished Goods, Work in Progress and Stock-in-Trade	(296.800)	126.900	(640.600)
		Employee Benefit Expense	845.900	694.800	647.400
		Other Expenses	2671.500	2234.600	2226.700
		Exceptional Items - Income / (Expenses)	23.100	363.600	344.400
		TOTAL (B)	20640.300	19213.400	18967.600
Less	PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		2308.200	1748.100	1650.800
Less	FINANCIAL EXPENSES (D)		133.800	260.700	191.200
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		2174.400	1487.400	1459.600
Less/ Add	DEPRECIATION/ AMORTISATION (F)		466.300	394.700	387.800
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)		1708.100	1092.700	1071.800
Less	TAX (H)		255.400	110.800	203.700
	PROFIT / (LOSS) AFTER TAX (G-H) (I)		1452.700	981.900	868.100
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1534.900	795.200	401.600
Less	APPROPRIATIONS
		Proposed dividend on the Equity Shares	183.500	122.400	107.100
		Dividend distribution tax on proposed dividend on Equity Shares	30.300	19.800	17.400
		Transferred to Debenture Redemption Reserve	0.000	0.000	250.000
		Transfer to General Reserve	150.000	100.000	100.000
	BALANCE CARRIED TO THE B/S		2623.800	1534.900	795.200
	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Exports	486.900	483.900	393.700
	TOTAL EARNINGS		486.900	483.900	393.700
	IMPORTS
		Raw Materials	1263.000	731.900	895.500
		Spares and Components	21.000	19.600	22.000
		Capital Goods	93.700	215.400	32.300
	TOTAL IMPORTS		1377.700	966.900	949.800
	Earnings Per Share (Rs.)		9.50	6.40	5.70

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	6.33	4.68	4.21
Net Profit Margin (PBT/Sales)	(%)	7.52	5.29	5.26
Return on Total Assets (PBT/Total Assets}	(%)	14.84	11.09	10.81
Return on Investment (ROI) (PBT/Networth)		0.18	0.14	0.15
Debt Equity Ratio (Total Debt/Networth)		0.18	0.19	0.18
Current Ratio (Current Asset/Current Liability)		2.86	2.32	1.79

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns.)	(INR in Mlns.)	(INR in Mlns.)
Share Capital	305.900	305.900	305.900
Reserves & Surplus	6868.900	7698.400	8937.300
Net worth	7174.800	8004.300	9243.200
Long-term borrowings	970.400	1162.200	1451.500
Short term borrowings	291.900	383.200	171.100
Total borrowings	1262.300	1545.400	1622.600
Debt/Equity ratio	0.176	0.193	0.176

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Revenue from Operations (Net)	20357.500	20641.600	22706.800
		1.396	10.005

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Revenue from Operations (Net)	20357.500	20641.600	22706.800
Profit	868.100	981.900	1452.700
	4.26%	4.76%	6.40%

LOCAL AGENCY FURTHER INFORMATION

Details of Current maturities of long-term borrowing:

Particulars	31.03.2013 (Rs. in millions)	31.03.2012 (Rs. in millions)	31.03.2011 (Rs. in millions)
Current maturities of long-term borrowing	183.500	170.900	1338.200

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	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	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	Yes
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

LITIGATION DETAILS:

Case Details

Bench:-Bombay

Lodging No.:- ITXAL/20/2012

Filing Date:- 06.01.2012

Reg. No.:- ITXA/730/2012

Reg. Date:- 24.07.2012

Petitioner:- The Commissioner of Income Tax – (Central)

Respondent:- Finolex Cables Limited

Petn. Adv.:- Vipul Arun Bajpayee (I4135)

District:- PUNE

Bench:- DIVISION

Status:- Admitted (Unready)

Category:- TAX APPEALS

Last Date:- 12.02.2013

Stage:- FOR DIRECTION

Last Coram:- HON'BLE SHRI JUSTICE J.P. DEVADHAR

HON'BLE SHRI JUSTICE M.S. SANKLECHA

Act :- Income Tax Act, 1961

Under Section:- 260A

INDEX OF CHARGES:

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10353872	27/03/2012	750,000,000.00	AXIS TRUSTEE SERVICES LIMITED	AXIS HOUSE, 2ND FLOOR, BOMBAY DYEING MILLS COMPOUND, PANDURANG BUDHKAR MARG, WORLI, MUMBAI, MAHARASHTRA - 400025, INDIA	B39004361
2	10270460	23/02/2011 *	500,000,000.00	AXIS TRUSTEE SERVICES LIMITED	AXIS HOUSE, 2ND FLOOR, BOMBAY DYEING MILLS COMPOUND, PANDURANG BUDHKAR MARG, WORLI, MUMBAI, MAHARASHTRA - 400025, INDIA	B08437824
3	10192895	21/12/2009	470,000,000.00	STANDARD CHARTERED BANK	90 M G ROAD, MUMBAI, MAHARASHTRA - 400001, INDIA	A75573964
4	90090849	30/12/1998	500,000,000.00	BANK OF BARODA	CORPORATE BANKING BRANCH, MANTRI COURT; 1ST FLOOR; 39; DR. AMBEDKAR ROAD, PUNE, MAHARASHTRA - 411001, INDIA	-
5	90084770	11/06/2001 *	285,500,000.00	CORPORATION BANK	INDUSTRIAL FINANCE BRANCH, PUNE, MAHARASHTRA - 411003, INDIA	-
6	90090621	24/06/2005 *	1,361,500,000.00	BANK OF MAHARASHTRA	INDUSTRIAL FINANCE BRANCH, PUNE, MAHARASHTRA, INDIA	-
7	90090594	13/02/1998 *	550,000,000.00	BANQUE NATIONALE DE PARIS	C G-3 KONARK ESTATES, 9 CONNAUGHT ROAD, PUNE, MAHARASHTRA - 411001, INDIA	-
8	90088034	27/04/1998 *	500,000,000.00	THE INDUSTRIAL CREDIT AND INVESTMENT CORP. OF INDIA LIMITED	163; BACKBAY RECLAMATION, MUMBAI, MAHARASHTRA - 400020, INDIA	-
9	90087982	04/07/1996 *	130,000,000.00	THE INDUSTRIAL CREDIT AND INVESTMENT CORP. OF INDIA LIMITED	163; BACKBAY RECLAMATION, BOMBAY, MAHARASHTRA - 400020, INDIA	-
10	90087939	07/10/1995 *	150,000,000.00	THE INDUSTRIAL CREDIT AND INVESTMENT CORP. OF BANK L IMITED	163; BACKBAY RECLAMATION, BOMBAY, MAHARASHTRA - 400020, INDIA	-
11	90089875	17/09/1993	50,000,000.00	THE INDUSTRIAL CREDIT AND INVESTMENT CORP. OF INDIA LIMITED	163; BACKBAY RECLAMATION, BOMBAY, MAHARASHTRA - 400020, INDIA	-
12	90093410	01/09/1993	14,000,000.00	CITIBANK N. A.	293; D. N. ROAD, BOMBAY, MAHARASHTRA - 400001, INDIA	-
13	90082377	26/05/1993	60,000,000.00	BARCLAYS BANK PLC	21/23; MAKER CHAMBERS VI, NARIMAN POINT, BOMBAY, MAHARASHTRA - 400021, INDIA	-
14	90089777	25/09/1992	180,000,000.00	THE INDUSTRIAL CREDIT AND INVESTMENT CORP. OF INDIA LIMITED	163; BACKBAY RECLAMATION, BOMBAY, MAHARASHTRA - 400020, INDIA	-
15	90087747	26/05/1993 *	85,000,000.00	THE INDUSTRIAL CREDIT AND INVESTMENT CORPORATION OF INDIA LIMITED	163; BACKBAY RECLAMATION, BOMBAY, MAHARASHTRA - 400020, INDIA	-
16	90089725	26/02/1993 *	16,000,000.00	CORPORATION BANK	ADITI COMMERCE CENTRE, H-2406; GEN. THIMAYYA ROAD; PUNE CAMP, PUNE, MAHARASHTRA - 411001, INDIA	-
17	90089718	17/02/1992	10,500,000.00	ANZ GRINDLAYS BANK	90; MAHATMA GANDHI ROAD, P. O. BOX 141, BOMBAY, MAHARASHTRA - 400001, INDIA	-
18	90093581	27/08/1991	40,500,000.00	ANZ GRINDLAYS BANK	90; MAHATMA GANDHI ROAD, P. O. BOX 141, BOMBAY, MAHARASHTRA - 400001, INDIA	-
19	90089285	27/08/1991 *	5,000,000.00	AMERICAN EXPRESS BANK LIMITED	ORIENTAL BUILDING; 364, DR. D.N. ROAD, BOMBAY, MAHARASHTRA - 400001, INDIA	-
20	90089284	10/11/1993 *	2,500,000.00	THE SARASWAT COOPERATIVE BANK LIMITED	HOTEL SURAKIRAN; MIDC INDUSTRIAL ESTATE, BOMBAY-P UNE ROAD; PIMPRI, PUNE, MAHARASHTRA - 411018, INDIA	-
21	90089118	29/05/2010 *	4,500,000,000.00	CENTRAL BANK OF INDIA LIMITED	BRANCH OFFICE AT- JEWEL OF PIMPRI, 'B' WING, 1ST, FLOOR, KAMLA CROSS ROAD, OPPOSITE PCMC BHAVAN, PIMPRI, PUNE, MAHARASHTRA - 411018, INDIA	A87731485
22	90083158	26/05/1993 *	5,500,000.00	CENTRAL BANK OF INDIA	PIMPRI BRANCH; SR. NO. 22/1, POONAM CHAMBERS; PIMPRI, PUNE, MAHARASHTRA - 411018, INDIA	-

* Date of charge modification

Unsecured Loan	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Deferred Sales Tax Loan	20.600	23.100
SHORT - TERM BORROWINGS
From Banks in Foreign Currency
Buyers’ Credit	171.100	179.700
Total	191.700	202.800

BACKGROUND

Economic recovery that was expected at the beginning of the year has not materialized. Global economic growth was lower than in the previous year with all the stars of the past few years (China/India/Other BRIC nations) clocking very moderate growth. Most of the large economies which were affected by the crisis of 2008 were still resorting to quantitative easing in some form or the other, hoping to stimulate investment and economic activity; however clear signs of recovery are still to emerge.

On the domestic front, a few issues continue to defy solutions - inflation has been ruling high for well over two years now leading to a period of relatively high interest rates and its negative impact on the economy; GDP growth of 5%,which is far lower than the 6.5% reported in the previous year and way below the 8% average that was achieved in the years leading upto 2010; the high level of government’s fiscal deficit at 5.4% continues to trouble the economy; and a continuously depreciating Rupee – from a level of Rs.50.88 in March, 2012 to the US Dollar, the Rupee in March, 2013 closed at Rs.54.285.

The Government expects the economy to pick up after faltering last year – GDP is expected to grow at around 6.5% in the coming financial year; fiscal deficit is expected to be contained to under 5% of GDP, and inflation is expected to be around 6.5%. However, this will depend on how some elements of the economy play out – such as oil and commodity prices, availability of adequate finances and the ability of the manufacturing sector to pull itself out of the current situation.

OPERATIONS

Overall sales grew by 10% in value terms in 2012-13 when compared to the previous year. In volume terms the growth was higher at 14%. Higher volumes were achieved in both Electrical as well as Communication Cable segments. Star performances came in from product offerings to the following customer sectors – automotive, agriculture and construction in the Electrical Cables segment and Coaxial and Optic Fibre Cables in the Communication Cable segment. Towards the end of the period, however, it was clear that both the Auto and Infrastructure (Power) sectors were under strain. On the other hand recent developments within the Telecom sector viz. announcement of the intention by the Government to create a nationwide Optic Fibre Network to provide connectivity to village panchayats, roll out of 4G services by some Telecom service providers etc will substantially improve growth possibilities in the coming financial year. Outlook on orders from this segment looks promising.

Income for the year was higher at Rs.22948.500 millions (previous year Rs.20961.500 millions) representing a growth of 10% over the previous year. The Company has recorded a Net Profit after Tax of Rs.1452.700 millions as against a Net Profit of Rs.981.900 millions in the previous year. The improved profitability comes from a better product mix, higher capacity utilization, growth in sales volumes across the product lines mentioned above, tight monitoring of working capital requirement and improved purchasing efficiencies.

EXPANSION AND CONSOLIDATION

Consolidation of the Pune manufacturing operations is underway as planned. Most operations would be consolidated at the Urse site by end 2013, with limited activity remaining at Pimpri. This will help further improve the cost competitiveness in the Low Duty Electrical Cables offered by the Company.

As announced in February 2013, the Company will set up a 5MW solar power plant at its Urse site, which has ample land, a part of which will be used to set up this facility. The facility will cost approximately Rs.400.000 millions to build and it is expected to be operational by January 2014. The power generated will be entirely consumed within the Urse site leading to cost efficiencies.

The Roorkee facility expansion is also well under way. Construction of a new factory shed is almost complete and new machinery has started arriving at the site. Commissioning of equipment is expected to be complete by end 2013. The expansion is expected to be within the budget of Rs.1000.000 millions and will be completed within the timeframe initially set.

In view of the opportunities now visible in the Telecom sector, the Company is investing in additional cable making equipment at the Optical Fibre Cable facility at Goa. Over the next year an investment of around Rs. 500 million is envisaged.

JOINT VENTURES

Finolex J-Power Systems Private Limited, Shirval near Pune

As mentioned in the previous year’s report the JV is now fully operational and has been participating in tenders both locally as well as overseas. The JV has secured its first large order (valued at Rs.380.000 millions) to supply 132 Kv power cables to the Maharashtra State Electricity Transmission Co. Limited Thus far, the JV has supplied cables at the 66Kv and 110Kv range to its customers.

As members will be aware, in respect of the products offered by the JV, pre-qualification requirements are very stringent and no effort is being spared in ensuring that the JV obtains all the requisite certifications. Members will be happy to note that the JV’s 220Kv range of power cables have already passed the Type Test requirements and that the JV has secured certification from the Central Power Research Institute (CPRI) – this will enable the JV to bid and compete in these range of cables as well.

Corning Finolex Optical Fibre Private Limited

Business operations commenced during the last quarter of 2012-13. As mentioned earlier, recent announcements by the government augur well for the Telecom sector and it is expected that fiber sales will be robust in the current fiscal. It is expected that 2013-14 will be a promising year for Optic Fibre business and the JV expects to benefit from the same.

NEW PRODUCTS

The Company is continuously looking at developing new products to expand its portfolio as well as adapt to changing needs of the market. In the current fiscal, the Company has already launched new lamp models including LED based lighting systems meant for home use, street lighting and other commercial spaces. The Company has also plans of entering the switchgear product segment and will launch a series of products within the MCB, ELCB and MCCB range during 2013-14.

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESS OF THE COMPANY:

The Company operates in two main segments - Electrical Cables and Communication Cables.

To support its requirement of Copper Rods for both type of cables, the Company manufactures Continuous Cast Copper Rods (CCC rods), at its Rod Plant at Goa. A small part of this production of CCC rods is, however, sold to third party customers. The result from this operation is declared under the Copper Segment.

The Company’s foray into the Lamps and Electrical Switches businesses is still in its early years and account for less than 5% of the Company’s turnover and are hence reported as “Others” in the Segment Results.

Main Segments:

The Company is the leading domestic manufacturer of electrical and communication cables with a wide product range. The Company offers a ‘Total Cable Solution’. The broad segmentation of the products manufactured by the Company is as follows:

Group	Products Covered	Application
Electrical Cables	1100 V PVC insulated cables	Electrification of industrial establishments, electrical panel wiring and consumer electrical goods.
	Motor winding PVC insulated cables and 3 core flat cables	Submersible pumps and electrical motors.
	Automotive/battery cables	Wiring harness for automobile industry and battery cables for various applications
	UPS cables	For providing power from the UPS to the computer/ appliances in the networking environment.
	Heavy duty, underground, low voltage, power and control cables	Connection to the user point from main supply of power.
	Heavy duty, underground, high voltage, power cables	Intra-city power distribution network
Communication Cables	Jelly filled telephone cables (JFTCs)	Telephone line connections to exchanges and users.
	Local area network (LAN) cables	Indoor and outdoor networking, voice and data transmission, broadband usage.
	PE insulated telephone cables (Switchboard cables)	Telephone instrument connections to EPABX.
	Coaxial cables	Cable TV network solutions, microwave communications, mobile towers.
	Speaker Cables	Meant for broadcasting applications in buildings.
	Optic fibre	Principal raw material for optic fibre cables.
	Optic fibre cables	For use in networks requiring high speed transfer of large bandwidth due to voice, image and data transmission.
	V-SAT cables	For connecting V-SAT dish to base station.
Copper Rods	CCC rods of 8 mm diameter	Raw material for manufacture of copper based cables.
Electrical Switches	Premium and classic switches, sockets, regulators, etc.	Domestic lighting, hotels, shops, offices, corridors.
Lamps	Retrofit and non-retrofit CFL lamps as well as T5 Tube Lights and Fittings.	Domestic lighting, hotels, shops, offices, corridors.

The Company’s product application range is thus for electrical usage, transmission of voice, data and images (contents) for domestic, commercial and industrial applications to electrical products, touching every person in his daily life.

REVIEW OF OPERATIONS:

· Production:

- Electrical Cables at 50,445 MT as compared to 45,348 MT in the previous year.

- Metal based Communication Cables at 4,678 MT as compared to 4,276 MT in the previous year.

- Optical Fibre Cables at 49,080 KM as compared to 30,211 KM in the previous year.

- Optic Fibre at 959,270 fibre kilometers as compared to 273,130 fibre kilometers in the previous year.

· Sales:

- Electrical Cables (including Excise Duty) at Rs.20858.000 millions as compared to Rs.17705.000 millions in the previous year.

- Communication cables (including Excise Duty) at Rs.1991.000 millions as compared to Rs.1420.000 millions in the previous year.

- Copper Rods (net of interdivisional transfers and including Excise Duty) at Rs.836.000 millions as compared to Rs.2051.000 millions in the previous year.

· Exports were marginally higher at Rs.496.000 millions as against Rs.489.000 millions of the earlier year.

· The income from operations (including Excise Duty) was Rs.24235.000 millions for the year as compared to Rs.21826.000 millions for the earlier year.

· The Joint Venture with J-Power Systems Corp of Japan, Finolex J-Power Systems Private Limited, continues on its journey to become the leading player in the country in the Extra High Voltage Cable business. Product certifications were obtained during the year for its 66Kv, 132Kv and 220Kv offerings. The JV also secured its first large order worth Rs. 380 million recently. Supplies of this prestigious order from Maharashtra State Electricity Transmission Company will commence from October 2013. During the year the JV supplied small quantities of 66Kv and 110Kv cables to its customers including a breakthrough export order from Singapore for its power utility. All these orders, though for small quantities will go a long way in establishing the JV as a quality supplier in the region.

· The Joint Venture with Corning SAS, Corning Finolex Optical Fibre Private Limited commenced operations during the last quarter of 2012-13. Small quantities of Optical Fibre were sold to other merchant cablers within India.

BUSINESS ENVIRONMENT:

The segment-wise discussion on the markets which are served by the Company is as follows:

Electrical Cables:

Electrical cables can be further categorised into light duty electrical cables, power and control cables.

(i) Light duty electrical cables include electrical wires used extensively for electrification of industrial establishments, electrical panel wiring in industrial establishments and major equipments, consumer durable goods, automobiles, agricultural pump sets, small generator applications besides general lighting purposes.

(ii) In power cable category, the Company has the ability to manufacture such cables within the range 1.1 kV to 66 kV. These cables are high voltage cables designed in various contructions depending upon their applications; however, always meant for underground usage. Power and control cables upto 3.3 kV rating are used for connecting user point to the main supply of power. Power cables above 3.3 kV rating are meant for use in underground application for intra-city electricity distribution network. The Company manufactures insulated power cables only. These cables meet the requirements of international standards.

Performance:

For the year, this segment cables registered sales (including Excise Duty) of Rs.20858.000 millions against Rs.17705.000 millions of the previous year. It accounted for 87% of total sales for the year. Growth during the year was driven by automobile, construction and agricultural applications. While the infrastructure area remained very subdued (with the poor financial position of the various power utilities as well as constraints faced by them in terms of fuel availability), during the last quarter the automobile sector was also under strain.

Outlook:

Electrical cables are the main focus area of business for the Company. In the near term the outlook is somewhat mixed – construction sector appears positive with development seeming more broad based and consumption being reported from interior areas of the Country rather than being limited to the larger cities; agricultural applications also appear positive and poised to continue on the growth shown in the previous years; automobile and infrastructure (power), however seem to be going through a slower growth path at this moment. In the long term, however, the outlook for the entire segment is positive, given the fact that sustained economic growth of the country depends on a robust and stable infrastructure.

The Company faces two principal risks in this business – firstly competition from a large unorganized sector which produces products of inferior quality but at cheap prices and secondly a highly volatile commodity market where price movements can be very sharp. The Company has been handling the risk of the competitive forces through its organized business approach by the strength of its reach, superior quality products, safe products and maintaining high standards of service levels with its customers. The Company enjoys the advantages of economies of scale and backward integration. As and when GST is rolled out in the country, the Company believes the threat of a competitive force that relies on cheap quality and unfair trade practices will reduce further. As regards the risk of sharp raw material price movements, though the Company endeavors to pass on the price effect to the customers, there has always been a time lag between the price movement and the passing thereof. The Company negotiates price variation contracts with bulk buyers. The Company has been fair in dealing with its customers and accordingly enjoys customer confidence in pricing decisions.

Communication Cables:

The communication cables comprise of state of art, new generation communication cables and traditional telephone cables.

(i) The state of art communication cables are either copper based or glass based. The copper based cables include LAN cables, coaxial cables, PE insulated switchboard cables and V-SAT cables. These cables are used for last mile connectivity. LAN cables are used in high speed networks, Coaxial cables are used to provide content input to TV receiving sets and in microwave communications and mobile towers, PE insulated switchboard cables are used to connect telephone instruments to an EPABX system and V-SAT cables find their application in V-SAT towers to connect the dish to the base station.

Optic fibre cables are glass based cables and they have the maximum bandwidth and speed. Certain cable designs are used as trunk cables in long distance networks while other designs are used in distribution, whether by telecom companies, multi-service organisations or other service providers.

Communication cables which carry, voice data or images is the backbone of an economic activity. The speed and bandwidth determine the capabilities of a communication network.

(ii) Traditional telephone cables include JFTCs which are laid underground and are used for connecting land line telephones to exchanges. These are copper based cables. With introduction of mobile telephones in India and due to substitution by optic fibre cables, JFTC business has lost its value. Nevertheless, JFTC continues to remain a preferred option for last mile connectivity in fixed line telephones. The demand for JFTCs will continue to remain modest. The Company would continue to manufacture JFTCs especially with broadband features for public sector and private sector telecom companies and to meet the export demand. The Company has the capability to make JFTCs as per customer’s needs.

Performance:

The communication cables segment (including optic fibre) recorded sales of Rs.1991.000 millions for the year against Rs.1420.000 millions for the earlier year. The year has been a change from the past three years during which period the telecom sector had been plagued by uncertainties. Some private service providers commenced roll out of their 4G services which brought in business opportunities. Also, the changeover to digital transmission in several cities across the country resulted in additional demand for Coaxial cables. With attractive price offerings and the past experience of better customer service, this segment has showed an improved performance in the year. Capacity utilisation at all plants have shown improvement leading to better margins and profitability.

Outlook:

With the impetus from the Government in providing better and faster internet access to rural India, the Company believes that demand for communication products will be robust for the foreseeable future. The economic development requires inter-alia, a strong, dependable and sustainable communication network. Besides the programs being implemented by the Government, roll out of 4G services by private service providers will entail additional capital expenditure in the form of an optic fibre network. The Company’s communication cables meet with the requirement of local as well as international standards and therefore, find ready acceptance with domestic customers as well as in the exports market. The outlook here, is positive, both in the near as well as long term.

The risks of competition and copper price movements similar to the electrical cables business are also applicable to the business of communication cables. The varying global demand-supply equation of optic fibre and resultant price movement thereof; availability of preforms and price thereof and delay/slow-down in investment into networks by telecom companies/service provider and other relevant entities due to global slow-down pose risk to the business of communication cables. The Company’s association with Corning Inc of USA, inventor of glass fibre, one of the world’s leading glass and fibre manufacturer and having the largest market share in the world, would be beneficial in meeting technological and market based challenges.

Copper Rods:

Copper rod is the feed stock for copper based electrical and communications cables. The Company manufactures its own copper rods. The base material for producing copper rods is copper cathodes, the bulk of which are procured from local manufacturers under long term supply agreements. A smaller portion of the requirement of copper cathodes is imported as and when needed. After meeting the in-house requirement of copper rods, the balance capacity to produce copper rods is allocated for third party sale.

Performance:

The sales were Rs.7,075 million (previous year Rs.9,504 million) of which Rs.836 million were sales to third parties (previous year Rs.2,051 million) and balance was inter-divisional transfers. With continued uncertainties in the global business environment, commodity markets remained volatile through the year – prices ranged from USD 8,300 at the beginning of the year before dropping to USD 7,000 levels by the end of the year. Within the domestic market, the threat of imported copper led to the domestic majors sharply dropping the premium on copper rods from earlier levels, while increasing the premium levels on copper cathode. This put severe pressure on margins related to sale of copper rods to third party – consequently the Company restricted its sale of copper rods to already committed contracts or contracts where the margin levels were acceptable. Overall, therefore, there was a reduction in the throughput at the copper rod segment.

Outlook:

The copper rod production is mainly for in-house consumption. The Company’s steps to set up new plants for cables as well as to expand the cable capacity at the existing plants will boost up the captive consumption of copper rods. Further, since the joint venture with J-Power Systems Corp. of Japan has commenced its operations, the venture’s copper requirements would be met by the Company’s copper rod plant. Accordingly the utilization of capacity at copper rod plant is expected to improve in coming years.

Electrical Switches and CFLs:

The manufacture and sale of these electrical products act as a logical extension of the cables business of the Company. They have the backing of Finolex name, assuring the customer of quality, safety and performance standards. These electrical and lighting products are sold through the existing well-spread distribution network of cables. Other distribution avenues are also being explored to penetrate further in the market. Products have been well accepted by the market.

On its part to contain the effects of global warming, the Government is promoting use of CFLs. Keeping in mind the expected growth in CFL demand the Company has built capacity in T3 and T4 type CFLs and has also launched the latest T5 tube lights and fittings in the market.

Both the above products fared well during the year and grew by more than 100% in volume and value terms. With improved distribution coverage, additions to product range including LED applications for the home, business, commercial and industrial usage being planned in the current fiscal, outlook in this area is very positive.

CONTINGENT LIABILITIES AND PROVISIONS (AS ON 31.03.2013):

a) Disputed demands in appeal towards Excise Rs.201.500 millions (Previous year Rs.156.400 millions), Customs Rs.13.400 millions (Previous year Rs.13.400 millions) and Sales Tax Rs.946.900 millions (Previous year Rs.599.000 millions).

b) i) Disputed Income Tax demands and matters in Appellate proceedings Rs.497.900 millions (Previous year Rs.424.900 millions).

ii) Appeals preferred by Income Tax Department against Appellate decisions in favour of the Company, wherein, should the ultimate decision be unfavourable to the Company, the liability is estimated to be Rs.524.400 millions (Previous year Rs.485.600 millions).

c) Guarantees given by Company’s Bankers on behalf of the Company, towards performance and other matters, amounting to Rs.573.800 millions (Previous year Rs.474.300 millions), are secured by hypothecation of Stock in trade, Book Debts, Stores and Spares etc. The Company has also given margin deposits of Rs.75.000 millions (Previous year Rs.75.000 millions) against above guarantee.

d) The Company has imported capital goods under the Export Promotion Capital Goods (EPCG) scheme, of the Government of India, at concessional rates of duty on an understanding to fulfill quantified exports against which future obligation aggregates to Rs.1474.000 millions (Previous year Rs.1381.400 millions) over a period of six / eight years from the date of license.

e) Amounts claimed by Banks in respect of derivative transactions which are under dispute not acknowledged as debts Rs.170.900 millions (Previous year Rs.170.900 millions).

f) Provision for derivatives transactions:

Provision for derivatives as at the year end is Rs.525.200 millions (Previous year Rs.342.100 millions) including provided during the year of Rs.233.900 millions (Previous year Rs.92.600 millions) and is net of payments of Rs. NIL million (Previous year Rs.312.200 millions).

AUDITED FINANCIAL RESULTS FOR THE QUARTER AND THE YEAR ENDED 31^ST MARCH, 2014

(Rs in millions)

Particulars	Quarter ended		Current year ended
	31.03.2014	31.12.2013	31.03.2014
	(Audited)#	(Unaudited)	(Audited)
1. Income from Operations
a) Net Sales / Income from Operations (Net of excise duty)	6424.900	5575.500	23366.700
b) Other Operating Income	65.600	55.500	223.700
Total income from Operations (Net)	6490.500	5631.000	23590.400
2. Expenses
a) Cost of Materials Consumed	4830.900	3783.900	17759.300
b) Purchases of Stock in Trade	38.600	33.600	112.100
c) Change in Inventories of finished goods, WIP & Stock in trade (increase)	(117.900)	640.100	(215.300)
d) (Increase) / Decrease In Excise Duty On Closing Stock of Finished Goods	(22.300)	(58.500)	(13.100)
e) Employee Benefit Expenses	205.100	213.300	848.300
f) Depreciation, Amortisation & Impairment	122.400	126.700	484.300
g) Other Expenses	355.100	116.300	813.700
h) Power & Fuel	96.000	78.300	370.700
i) Sales & Distribution Expenses	354.400	381.000	1443.600
Total Expenses	5862.300	5314.700	21603.600
3. Profit from Operations before other income, finance costs, prior period adjustments and exceptional items (1-2)	628.200	316.300	1986.800
4. Other Income	60.500	34.700	483.500
5. Profit from ordinary activities before finance costs, prior period adjustments and exceptional items (3+4)	688.700	351.000	2470.300
6. Finance costs	30.800	34.900	134.000
7. Profit from ordinary activities after finance costs but before prior period adjustments and exceptional items (5-6)	657.900	316.100	2336.300
8. Exceptional Items – Income/ (Expenses)	--	0.000	103.800
9. Profit from ordinary activities before Tax (7+8)	657.900	316.100	2440.100
10. Tax Expenses	(35.200)	71.400	363.300
11. Net Profit from ordinary activities after tax (9-10)	693.100	244.700	2076.800
12. Extraordinary Items (net of tax expenses)	--	--	--
13. Net Profit for the period (11-12)	693.100	244.700	2076.800
14. Paid up Equity Share Capital	305.900	305.900	305.900
15. Paid up Debt Capital	500.000	500.000	500.000
16. Reserves excluding Revaluation Reserve as per balance sheet of previous accounting year	10727.800	10076.300	10727.800
17. Debenture Redemption Reserve	--	--	250.000
18. Earnings per share (before and after extraordinary items) (of Rs.2/- each) (not annuaiised):
(a) Basic	4.50	1.60	13.60
(b) Diluted	4.50	1.60	13.60
19. Debt Equity Ratio*	--	--	0.13
20. Debt Service Coverage Ratio**	--	--	7.63
21. Interest Service Coverage Ratio***	--	--	19.21
* Debt Equity Ratio : Long Term Borrowing + Short Term Borrowing + Current maturity of Long Term Borrowing/ Shareholders Fund ** Debt Service Coverage Ratio : PBIT/ Finance Cost + Current maturity of Long Term Borrowing *** Interest Service Coverage Ratio : PBIT/ Finance Cost
PART II
A. PARTICULARS OF SHAREHOLDING
1. Public Shareholding*
- Number of shares	98097875	98210875	98097875
- Percentage of shareholding	64.14%	64.22%	64.14%
2. Promoters and Promoter Group Shareholding
(a) Pledged/ Encumbered
- Number of Shares	Nil	Nil	Nil
- Percentage of shares (as % of the total shareholding of promoter and promoter group)	NA	NA	NA
- Percentage of shares (as % of the total share capital of the company)	NA	NA	NA
(b) Non-encumbered
- Number of Shares	54841470	54728470	54841470
- Percentage of shares (as% of the total shareholding of promoter and promoter group)	100.00%	100.00%	100.00%
- Percentage of shares (as % of the total share capital of the company)	35.86%	35.78%	35.86%

* Includes 22187075 shares (14.51%) held by Associate Company - Finolex Industries Limited

Particulars		Quarter ended 31.03.2014
B	INVESTOR COMPLAINTS
	Pending at the beginning of the quarter	Nil
	Received during the quarter	2
	Disposed of during the quarter	2
	Remaining unresolved at the end of the quarter	Nil

SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED, AS PER CLAUSE 41 OF THE LISTING AGREEMENT

(Rs in millions)

Particulars	Quarter ended		Current year ended
	31.03.2014	31.12.2013	31.03.2014
	(Audited)#	(Unaudited)	(Audited)
1. Segment Revenue including Other income
a. Electric Cables	5633.100	4699.500	20160.100
b. Communication Cables	670.200	398.400	2073.400
c. Copper Rods	1420.600	1668.000	6884.600
d. Others	986.800	453.900	2758.600
Total	8710.700	7219.800	31876.700
Less: Inter Segment Revenue	2220.200	1588.800	8286.300
Net sales/income from Operations	6490.500	5631.000	23590.400
2. Segment Results
Profit Before Interest and Tax
Profit (+) / Loss (-):
a. Electric Cables	843.300	444.800	2576.300
b. Communication Cables	113.100	31.900	285.400
c. Copper Rods	(1.600)	13.000	22.000
d. Others	(14.300)	(18.700)	(65.000)
Total Profit Before Interest and Tax	940.500	471.000	2818.700
Less :
interest	30.800	34.900	134.000
Other unallocated expenditure net of unallocated income	251.800	120.000	244.600
Total Profit before Tax	657.900	316.100	2440.100
3. Capital Employed (Segment Assets - Segment Liabilities)
a. Electric Cables	5379.200	5494.400	5379.200
b. Communication Cables	2015.900	1981.800	2015.900
c. Copper Rods	275.800	348.000	275.800
d. Others	860.600	566.000	860.600
e. Other than Segments	7108.200	6547.900	7108.200
Total Capital Employed	15639.700	14938.100	15639.700

STANDALONE / CONSOLIDATED STATEMENT OF ASSETS AND LIABILITIES

(Rs in millions)

SOURCES OF FUNDS	31.03.2014 (Audited)
I. EQUITY AND LIABILITIES
(1) Shareholders' Funds
(a) Share Capital	305.900
(b) Reserves & Surplus	10727.800
Total Shareholders’ Funds	11033.700
(2) Non-Current Liabilities
(a) Long-term borrowings	1266.900
(b) Deferred tax liabilities (Net)	295.200
(c) Other long term liabilities	17.900
(d) Long-term provisions	35.300
Total Non-current Liabilities	1615.300
(3) Current Liabilities
(a) Short term borrowings	0.000
(b) Trade payables	526.800
(c) Other current liabilities	1590.400
(d) Short-term provisions	873.500
Total Current Liabilities	2990.700
TOTAL	15639.700
II. ASSETS
(1) Non-current assets
(a) Fixed Assets	5065.400
(b) Non-current Investments	2260.800
(c) Long-term Loan and Advances	47.700
(d) Other Non-current assets	264.900
Total Non-Current Assets	7638.800
(2) Current assets
(a) Current investments	1770.600
(b) Inventories	3524.000
(c) Trade receivables	1451.700
(d) Cash and cash equivalents	648.600
(e) Short-term loans and advances	605.100
(f) Other current assets	0.900
Total Current Assets	8000.900
TOTAL	15639.700

1. Exceptional items for the year ended March 31, 2014 represent gains on account of settlement of claims in respect of foreign exchange derivative transactions of the earlier years.

(Exceptional items for previous periods indicate losses on account of foreign exchange derivative transactions.)

2. In line with the provisions of AS11 read with circulars and clarifications issued by Ministry of Corporate Affairs, the Company has adjusted foreign exchange gain of Rs.5.800 millions for the quarter and foreign exchange loss of Rs.46.100 millions for the year ended March 31, 2014 (foreign exchange gain of Rs.4.700 millions for the quarter and foreign exchange loss of Rs.35.200 millions for the year ended March 31, 2013) on revaluation of foreign currency loan against the value of fixed assets purchased out of such loan.

3. The operations of the Company's long term and strategic investment in a joint venture, Finolex J-Power Systems Limited ("the JV) have been impacted by economic slow-down and the JVs net worth is partially eroded. Management along with the JV partner, continues to support the JVs operations and expects improvement in JVs operations upon revival of the economic environment. Having regard to the uncertainty in timing of economic revival, a provision of Rs.73.700 millions has been made on prudent basis towards diminution in the value of investments for the quarter and year ended March 31, 2014.

4. The above financial results have been audited by the Company's Statutory Auditors, reviewed by the Audit Committee and taken on record by the Board of Directors at its meeting held on May 08, 2014.

5. The Board of Directors have recommended a dividend of Rs.1.60 Per Equity Share of Face value of Rs.2 each.

6. # The figures of the last quarters of the year ended March 14 and March 13 are the balancing figures between the audited figures in respect of the full financial year and the published year to date figures of the third quarter of the respective financial year.

7. Previous period's figures have been regrouped wherever necessary to conform to the current period's classification.

FIXED ASSETS:

Tangible Assets

· Land

· Lease Hold Land

· Buildings

· Plant and Machinery

· Furniture, Fittings

· Office Equipments

· Computer Peripherals

· Vehicles

· Dies and Moulds

Intangible Assets

· Software and Others

WEBSITE DETAILS:

NEWS:

FINOLEX CABLES LTD RESULTS

· Sales up 4% in the year as compared to the previous year.

· PBT up 43% in the year as compared to the previous year.

· PAT up by 43% in the year as compared to the previous year.

Pune, May 8th, 2014

Finolex Cables Limited, (FCL) at the meeting of its Board of Directors held today approved results for the fourth quarter and year ended March 31^st, 2014.

Net Sales for the quarter ended March 31^st 2014 were Rs.6424.900 millions as against Rs.6254.400 millions for the corresponding period in year 2012-13. Net Sales in the current quarter shows an increase of 3% compared to the corresponding period of the previous year. Profit for the quarter, before taxes, increased to Rs.657.900 millions from Rs.461.700 millions in the previous year - an increase of 43%.

Net sales for the year 2013-14 stood at Rs.23366.700 millions as against Rs.22438.400 millions for the year 2012-13, registering an increase of 4% over previous year. Profit for the year 2013-14 after taxes, increased to Rs.2076.800 millions as compared to Rs.1452.700 millions for the year 2012-2013 registering a growth of 43%.

As planned, the captive solar power plant of 5MW capacity was commissioned in March 2014. The plant was constructed at a cost of Rs.385.000 millions.

The Board of Directors has recommended a dividend of 80% for the year 2013-14.

ABOUT FCL

Finolex Cables Limited is India's largest and leading manufacturer of Electrical and Communication cables. Finolex offers a wide range of Electrical and Communication cables. Its wire and cable products are used in applications such as automobile, lighting, cable TV, telephone and computers to industrial applications touching every person in his daily life. Finolex has added Electrical Switches and Compact Flourescent Lamps (CFL) to its range of products.

FINANCIAL HIGHLIGHTS:

(Rs. in millions)

	Quarter Ended 31.03.2014	Quarter Ended 31.03.2013	Year Ended 31.03.2014	Year Ended 31.03.2013
Net Sales/ Income from Operations	6490.500	6321.300	23590.400	22706.800
Other Income	60.500	66.100	483.500	241.700
Profit before Exceptional item, Interest, Depreciation and Tax	811.100	730.800	2954.600	2529.100
Deductions for:
· Exceptional Item	--	80.200	(103.800)	230.100
· Interest	30.800	42.000	134.000	124.600
· Depreciation	122.400	146.900	484.300	466.300
Profit before Taxation	657.900	461.700	2440.100	1708.100
Tax Expenses	35.200	(74.200)	(363.300)	(255.400)
Profit After Tax	693.100	387.500	2076.800	1452.700

FINOLEX CABLES TO SET UP SOLAR POWER PLANT NEAR PUNE

February 14, 2013

PUNE: A captive 5 MW solar power plant will soon be set up by Finolex Cables Limited at its manufacturing facility at Urse near Pune with an estimated investment of Rs.400.000 millions.

The proposed plant, expected to be commissioned within six months, will provide electricity for the internal consumption of the Urse facility, which would be pooled with additional State Electricity Board (MSEDCL) supply for night time operations.

"With this in-house experience (setting up of captive solar power plant) we can go ahead and set up larger projects in future," company's Managing Director Deepak Chhabria told PTI, after the Finolex Cables' Board meeting which approved the third quarter results yesterday.

Referring to the company's future plans, Chhabria said there was good scope for growth in the fibre optic business as the new government initiated projects were expected to spur the demand in the sector.

"There are bright prospects for the segment growth in view of the government projects which envisage laying down of total underground network to be installed and handed over to the Defence services with an estimated investment of Rs.80000.000 millions to 100000.000 millions," he said.

"Tenders are already floated for these projects," Chhabria added.

While noting that the fibre optic sector was poised for significant growth, he said that as a country "we need to spend more on infrastructure to expand the industry."

Articulating the company philosophy, he said, "We are reinventing ourselves in large product portfolio in various segments. If you are diversified, you are better equipped."

He said the company aimed at being "one-stop-shop" for any cabling need with concentration of quality.

In reply to a question, Chhabria said if the government introduced uniform Goods and Service Tax ( GST), it will help the industry with improved sales.

Finolex Cables Limited is considered India's largest and leading manufacturer of electrical and communication cables who have also added electrical switches and Compact Fluorescent Lamps (CFL) to its range of products.

MULTIBAGGER: IFCI SEES 60% UPSIDE IN FINOLEX CABLES, EXPECTS RE-RATING

October 1, 2012

NEW DELHI: Finolex Cables Limited (FCL), the manufacturer of electrical and telecommunication cables, is set to report $1bn revenue by FY15 on account of robust balance sheet as well as backward and steady improvement in other business segments, IFCI said in a report on Monday

.

IFCI Financial Services, a subsidiary of IFCI Limited, initiated coverage on the stock with a 'buy' rating and a target price of Rs 68 per share, translating into an upside of about 60% from the current levels.

IFCI expects the stock to get re-rated supported by robust fundamental factors and capital expenditure plans. "The stage is set for FCL to meet the incremental demand for the next four years, with the capex of Rs3.9 billion incurred at ten manufacturing facilities in the last five years," IFCI said in a report.

"Also, the company is realigning capacities and is likely to incur a capex of Rs800mn in FY13 and FY14, which will decrease tax expense and improve production efficiency," the report added.

The government's impetus towards infrastructure sector, growth visibility for the next couple of years remains buoyant. IFCI expects the throughput for electrical cables (82% of total revenue in FY12) to increase from 35,000MT to 45,000MT by FY15 and expects the company to report $1bn topline by FY15.

Another reason why IFCI thinks that Finolex scores above its peers is owning to its 'Superbrand' status, strong distribution network, and over 20,000 dealers spread across the country.

Improvement in other business segment:

FCL has invested Rs480.2 million and has 49 per cent share in JV with J-Power systems of Japan. The JV is operational since September 2011 and is likely to generate Rs5-6 billion of revenue for the JV company in the next five years, according to IFCI analysis.

In another marketing JV with Cornings of USA in which FCL has invested Rs0.5mn will market optic fiber to cable manufacturers in India. Normally, FCL sells only 10-20 per cent of copper produced and the balance being used for in house consumption.

IFCI expects steady improvement for communication cable and other segments (CFL and electrical switches segments) and estimates a growth of 2-10 per cent in FY13.

Key downside risks to the rally

IFCI is of the view that a spike in copper price, which accounts for nearly 65 per cent of the product price, likely to weigh on margins. However, Finolex Cables is buying raw materials in local currency without exposure to derivative contracts.

However, the company generally passes on increase in the product price to customers. Also, to mitigate the risk of time lag, FCL purchases copper on monthly average price.

HEARD ON THE STREET: FINOLEX SURGES ON HITACHI CABLES STAKE-BUY BUZZ

June 19, 2012

Finolex Cables shares surged 4.4% on Monday on buzz that Japan-based Hitachi Cables was planning to purchase a stake in the company.

Market sources said Hitachi was planning to buy around 15% stake in the Pune-based electrical products maker. An email query to Finolex did not elicit a response till the time of going to print.

Amid high volumes, Finolex shares climbed to a month's high to Rs.43.95 on BSE, before closing at Rs.42.5. Over 5 lakh shares were traded on the bourse against a two-week average volume of 35,000 shares.

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.60.09
UK Pound	1	Rs.102.33
Euro	1	Rs.82.01

INFORMATION DETAILS

Information Gathered by :	HNA
Analysis Done by :	RAS
Report Prepared by :	SMN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--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		67

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.