MIRA INFORM REPORT

Report Date :

10.10.2014

IDENTIFICATION DETAILS

Name :	HARMAN INTERNATIONAL (INDIA) PRIVATE LIMITED
Registered Office :	Prestige Technology Park, Jupiter (2A) Block, Sarjapur, Marathahalli Ring Road, Kadubeesanahalli Village, Bangalore – 560 103, Karnataka
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	05.01.2009
Com. Reg. No.:	08-048794
Capital Investment / Paid-up Capital :	Rs.495.572 millions
CIN No.: [Company Identification No.]	U72200KA2009PTC048794
TAN No.: [Tax Deduction & Collection Account No.]	BLRH04664C
PAN No.: [Permanent Account No.]	AACCH1585J
Legal Form :	Private Limited Liability Company
Line of Business :	Subject is in the business of providing software development and related professional services and also engaged in manufacturing and trading of Audio, Infotainment and Other Electronic Products.
No. of Employees :	300 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (26)

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

Maximum Credit Limit :	USD 1902000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track record. The company has incurred a loss from its operations during 2013. However, trade relations are reported to be fair. Business is active. Payment terms are reported to be slow but correct. The company can be considered for business dealing with some caution.

NOTES :

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

ECGC Country Risk Classification List – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
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

N E W S

Verdict Implications : Apex court order may alter coal import dynamics. Traders go slow on talks over coal supply contracts, uncertainty over cancellation of blocks weigh on stocks.

Recent arrest of the Chennai head of the Registrar of Companies, the ministry of corporate affairs arm that ensures that companies file all the information required by the Companies Act is the latest manifestation of a messy fight between a father and his adopted son for the control of Rs 40000 mn business empire. The Central Bureau of Investigation arrested Manumeethi Cholan after he accepted Rs 10 lakhs as bribe from M A M Ramaswamy, a CBI official said.

Central Bureau of Investigation books Electrotherm for cheating Central Bank of Rs 4360 mn.

Infosys maintains revenue guidance. COO Rao says attrition still an area of concern and it would take a few more quarters to bring down levels to 13-15 %.

DHL  to invest Euro 100 mn in India over next 2 years. The firm has chosen India to pilot its e-commerce business model for the Asia-Pacific region.

Blackstone may buy stake in BlueRidge SEZ in line with the fund’s real estate strategy in India.

Kingfisher Airlines Ltd grounded in October 2012 under the weight of heavy debt and accumulated losses, recently approached the Delhi high court for relief in two separate cases. The airline challenged a notice by Punjab & National Bank alleging that It had wilfully defaulted on Rs 7700 mn of loans and sought more time to comply with the requirements under the listing agreements with the Stock Exchanges.

OnMobile likely to sack another 300 employees. The lay-offs follow a spate of senior-level exits over the past two years, starting with of its founder. The overall lay-offs could number around 600 and are driven by the need to cut costs, says a former employee.

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 31-03-2014.

INFORMATION PARTED BY (GENERAL DETAILS)

Name :	Mr. Chandrashekhar
Designation :	Accounts Department
Contact No.:	91-20-30810000
Date:	09.10.2014

LOCATIONS

Registered Office :	Prestige Technology Park, Jupiter (2A) Block, Sarjapur, Marathahalli Ring Road, Kadubeesanahalli Village, Bangalore – 560 103, Karnataka, India
Tel. No.:	91-80-43306451/ 43306000
Mobile No.:	91-9972811445 (Mr. T R Narayan)
Fax No.:	91-80-40976808
E-Mail :	financeindia@harman.com info@harman.com Rekha.Fogla@harman.com
Website :	http://www.harman.in
Factory/ Branch Office 1 :	ICC Devi Gaurav Technology Park, Site No.191 to 195, Old Bombay-Pune Road, Pimpri-Waghere, Pimpri, Pune – 411 018, Maharashtra, India
Tel. No.:	91-20-30810000
Warehouse:	G T No. 339/1/1B, Village Malunge, Khed, Pune – 410501, Maharashtra, India
Branch Office:	Old Bombay, Pune Road, Nasik Phata, Survey No 191, to 411018 Pimpri Waghere, Pune , Maharashtra, India
Branch Office :	Also located at: · Bangalore · Delhi · Mumbai

DIRECTORS

AS ON 30.09.2013

Name :	Mr. Muthuswami Lakshminarayan
Designation :	Managing Director
Address :	No.389 and 390, II Cross, 16^th Main, III Block, Koramangala, Bangalore – 560 034, Karnataka, India
Date of Birth/Age :	07.09.1946
Date of Appointment :	08.04.2013
DIN No.:	00064750
Name :	Mr. Balasubramanian Somaskandan Iyer
Designation :	Alternate Director
Address :	No.475, 8^th Main, NGEF Layout, Sadananda Nagar, Bangalore – 560 038, Karnataka, India
Date of Birth/Age :	13.10.1949
Date of Appointment :	04.03.2014
DIN No.:	00138425
PAN No.:	BBBBB1234C
Name :	Mr. Sachin Surendra Lawande
Designation :	Director
Address :	6804, Didrikson LN, Woodridge, United States of America 60517
Date of Birth/Age :	27.04.1967
Date of Appointment :	16.02.2009
DIN No.:	02250161

KEY EXECUTIVES

Name :	Mr. Chandrashekhar
Designation :	Accounts Department

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2013

Names of Shareholders	No. of Shares
Harman Industries Holding Mauritius Limited, Mauritius	49557213
Herman Financial Group LLC, USA	1
Total	49557214

AS ON 30.09.2013

Equity Share Breakup	Percentage of Holding
Category
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	100.00

BUSINESS DETAILS

Line of Business :

Subject is in the business of providing software development and related professional services and also engaged in manufacturing and trading of Audio, Infotainment and Other Electronic Products.

Products/ Services :

Item Code No. (ITC Code)	8518
Product Description	Loudspeakers
Item Code No. (ITC Code)	8543
Product Description	Processors
Item Code No. (ITC Code)	8523
Product Description	Software development and support services
Item Code No. (ITC Code)	8518
Product Description	Car Aftermarket
Item Code No. (ITC Code)	8518
Product Description	Headphones
Item Code No. (ITC Code)	8527
Product Description	Home Audio
Item Code No. (ITC Code)	8518
Product Description	Multimedia

Terms :

Selling :

Cash and Credit

Purchasing :

Cash and Credit

GENERAL INFORMATION

No. of Employees :	3000 (Approximately)
Bankers :	HDFC Bank Limited, Bangalore, Karnataka, India

Banking Relations :	--
Auditors :
Name :	BSR and Company Chartered Accountants
Address :	B-152, Dayanand Colony, Lajpat Nagar-IV , New Delhi, India
PAN No.:	AAKFB1884H
Holdings Company:	· Harman Industries Holding Mauritius Limited (w.e.f 15^th December, 2011) · Harman International Industries Inc, (till 14^th December, 2011)
Ultimate holding company:	Harman International Industries Inc.
Fellow Subsidiaries:	· Harman Becker Automotive Systems Inc. · Harman Becker Automotive Systems GmbH · Harman Professional Inc. (Harman Music Group) · AKG Acoustics GmbH · Studer Professional Audio GmbH · Harman Professional Inc. (Crown International) · Harman Consumer Inc. · Harman International Industries Inc. (AHA) · Harman International Industries Limited (Soundcraft) · Harman International S'pore Pte Limited (Harman Consumer Asia) · Harman International (China) Holdings Co. Limited (Harman Consumer China) · Harman International Industries Inc. (Harman Consumer Americas) · Harman International Industries Inc. Netherlands (Hci-Jbl International) · Harman Professional Inc. (Loudspeaker) · Harman International japan Co Limited (Lifestyle - Japan)

CAPITAL STRUCTURE

AS ON 30.09.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
50000000	Equity Shares	Rs.10/- each	Rs.500.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
49557214	Equity Shares	Rs.10/- each	Rs.495.572 millions

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	495.572	9.476	9.476
(b) Reserves & Surplus	(20.048)	(14.183)	(16.815)
(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)	475.524	(4.707)	(7.339)
(3) Non-Current Liabilities
(a) Long-term borrowings	0.000	0.000	0.000
(b) Deferred tax liabilities (Net)	0.000	0.000	0.000
(c) Other long term liabilities	0.000	0.000	0.000
(d) Long-term provisions	12.420	6.784	6.864
Total Non-current Liabilities (3)	12.420	6.784	6.864
(4) Current Liabilities
(a) Short term borrowings	0.000	0.000	0.000
(b) Trade payables	1010.177	0.000	3.756
(c) Other current liabilities	492.187	165.487	107.173
(d) Short-term provisions	15.553	6.084	2.679
Total Current Liabilities (4)	1517.917	171.571	113.608
TOTAL	2005.861	173.648	113.133
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	101.913	42.356	42.719
(ii) Intangible Assets	61.002	0.673	0.875
(iii) Capital work-in-progress	0.000	0.000	0.197
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.000	0.000	0.000
(c) Deferred tax assets (net)	6.219	5.033	0.000
(d) Long-term Loan and Advances	117.701	25.827	16.170
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	286.835	73.889	59.961
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	1007.032	0.125	0.217
(c) Trade receivables	530.568	20.984	28.243
(d) Cash and cash equivalents	76.870	19.146	7.543
(e) Short-term loans and advances	63.205	18.494	1.321
(f) Other current assets	41.351	41.010	15.848
Total Current Assets	1719.026	99.759	53.172
TOTAL	2005.861	173.648	113.133

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Revenue from operation	1544.866	450.842	296.697
		Other Income	0.166
		TOTAL (A)	1545.032	450.842	296.697
Less	EXPENSES
		Purchases of stock in trade	1543.879	448.678	285.969
		Changes in inventory of stock in trade	(1006.907)
		Employee benefits expense	486.877
		Other expenses	526.590
		TOTAL (B)	1550.439	448.678 (including financial expenses and depreciation)	285.969 (including financial expenses and depreciation)
Less	PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		(5.407)
Less	FINANCIAL EXPENSES (D)		0.000
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(5.407)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		44.194
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)		(49.601)	2.164	10.728
Less	TAX (H)		4.873	(0.468)	1.944
	PROFIT / (LOSS) AFTER TAX (G-H) (I)		(54.474)	2.632	8.784
	EARNINGS IN FOREIGN CURRENCY
		Revenue from software development services	669.338	449.174	238.254
		Revenue from support services			58.167
	TOTAL EARNINGS		669.338	449.174	296.421
	IMPORTS
		Stores & Spares	NA	NA	1.995
		Capital Goods	NA	NA	26.284
	TOTAL IMPORTS		NA	NA	28.279
	Earnings / (Loss) Per Share (Rs.)		(1.10)	2.78	9.27

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	(3.53)	0.58	2.96
Net Profit Margin (PBT/Sales)	(%)	(3.21)	NA	NA
Return on Total Assets (PBT/Total Assets}	(%)	(2.48)	1.28	9.50
Return on Investment (ROI) (PBT/Networth)		(0.10)	(0.46)	(1.46)
Debt Equity Ratio (Total Debt/Networth)		0.00	0.00	0.00
Current Ratio (Current Asset/Current Liability)		1.13	0.58	0.47

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	9.476	9.476	495.572
Reserves & Surplus	(16.815)	(14.183)	(20.048)
Net worth	(7.339)	(4.707)	475.524
Long-term borrowings	0.000	0.000	0.000
Short term borrowings	0.000	0.000	0.000
Total borrowings	0.000	0.000	0.000
Debt/Equity ratio	0.000	0.000	0.000

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)
Total Income	296.697	450.842	1545.032
		51.954	242.699

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Total Income	296.697	450.842	1545.032
Profit	8.784	2.632	(54.474)
	2.96%	0.58%	(3.53%)

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1) Year of Establishment	Yes
2) Locality of the firm	Yes
3) Constitutions of the firm	Yes
4) Premises details	No
5) Type of Business	Yes
6) Line of Business	Yes
7) Promoter’s background	Yes
8) No. of employees	Yes
9) Name of person contacted	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	Yes
20) Export / Import details (if applicable)	No
21) Market information	--
22) Litigations that the firm / promoter involved in	--
23) Banking Details	Yes
24) Banking facility details	No
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	Yes
33) Voter ID No of Proprietor/Partner/Director, if available	No
34) External Agency Rating, if available	No

Notes:

· The registered office of the company has been shifted from Unit No.301, 3^rd Floor, Campus 3B of The Project, Ecospace, Outer Ring Road, Bangalore – 560 037, Karnataka to the present address w.e.f. 19.12.2013.

· No Charges Exist for Company.

BACKGROUND

The Company is a private limited company incorporated under the provisions of the Companies Act, 1956 on January 5, 2009. The Company is in the business of providing software development and related professional services to its group companies. It also renders marketing and after sales support services for the products sold by the distributors of the group companies. During the current year, the Company has commenced trading operations in India, whereby the Company has now made available the professional and lifestyle related products to dealers.

The Company is a subsidiary of Harman Industries Holding Mauritius Limited (‘the holding company’). It derives its service revenue primarily from software development and marketing support services rendered Harman International Industries Inc., USA (‘the ultimate holding company’) and fellow subsidiaries. Revenue from sale of products is primarily generated from trading operations with various third party customers.

During the previous year, there had been a transfer of shares from Harman International Industries Inc., to Harman Industries Holding Mauritius Limited in two tranches and hence there had been a change in holding company with effect from 15^th December 2011.

OPERATIONS

The Company started its trading business in both the Professional and Life Style Business from 1^st October, 2013 and continued to invest in the Infotainment division in India by expanding the presence to Pune and inaugurating the construction of the Manufacturing Plant in Pune. A detailed explanation on financials are given below in the segmental analysis

Headcount

The net additions during the year was 237 and exit headcount as of 31^st March, 2013 was 458 which is 111% growth compared to previous year.

The Headcount growth was for both the IDC services (Software R&D and Marketing Services) and India business) Pro, LS and Infotainment). The exit headcount comprised of 18% women and 82% men with an average age of 30 years and 6.5 years of experience in the industry.

OUTLOOK

The Indian economy showed further signs of slowing down with the quarterly GDP growth slower at 4.4% against 4.8% from last quarter.

This has been attributed primarily to the lack of growth in key industry sectors such as infrastructure, mining, manufacturing and services.

The Indian rupee depreciated alarmingly over the course of last 6 months making it a very tough market place. The company has cross functional team in place to ensure both Growth and EBIT targets are met.

The company expects to continue to invest and incur engineering expenses for the Infotainment projects in India which should yield revenue in 2015 onwards.

IDC: The IDC (R&D services and marketing services grew 48% year or year. These teams worked on various new projects from group companies and showed a healthy margin of 16.62% and Marketing Support services ended with a margin of 9%

Professional: The company started trading Professional products with effect from 1^st October, 2013 after a lot of preparation to go direct with the distributors. The Revenue achievement and EBIT achievement were in line with the plan. The division posted a revenue of INR 446.000 Millions and an EBIT of INR 79.000 Millions.

Lifestyle Division: The Company started trading of Life Style products with effect from 1^st October, 2013. The company faced a lot of challenges on its distribution model in the life style business especially on the Car Audio products which resulted in both revenue and costs challenges. The division ended with a loss of INR 62.300 Millions mainly due to a Provision for doubtful debt of INR 60Millions due from one of the distributors. The management is however hopeful of collecting this money during the financial year 2013-14. Additionally the division had challenges in sales during December 12, January and February 13 and as a result of low sales during these months, the company carried an inventory INR 523.000 Millions as on balance sheet date. The management is focused on the EBIT margins for the year 2013-14 and are taking necessary steps to ensure Revenue and cost targets are met.

Infotainment: During the year the company acquired the business Interchain India Private Limited for a cash consideration of INR 450.000 Millions (excluding contingent consideration payable on achievement of revenue and talent retention targets). The Infotainment segment includes the Engineering development expenses for the TATA Project amounting to INR 144.360 Millions (Including accruals amounting to INR. 108.250 Millions). This segment reported a loss of INR 174.000 Millions. Tata project is expected to commence during April 2015. The Company will continue to incur Engineering expenses during 2013-14 for this project.

Although IDC (Software and Marketing) and Professional business performed satisfactorily, the net loss at INR 54.474 Millions is owing to the loss reported by LS and Infotainment business.

CONTINGENT LIABILITIES (TO THE EXTENT NOT PROVIDED FOR):

Particulars	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
Bank guarantee	21.900	1.000

FIXED ASSETS:

Tangible Assets

· Leasehold Improvements

· Computer Equipments

· Lab Equipment

· Furniture and Fixtures

· Office Equipment

· Vehicles

· Computer Software

Intangible Assets

· Goodwill

· Non-Compete Arrangements

· Intellectual Property

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.61.04
UK Pound	1	Rs.98.64
Euro	1	Rs.77.74

INFORMATION DETAILS

Information Gathered by :	DIP
Analysis Done by :	RAS
Report Prepared by :	KVT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	1
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	4
--RESERVES	1~10	1
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		26

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.