I C R A Limited

An Associate of Moody’s Investors Service

Strictly Confidential.

July 9th 2009.

Mr. Deepak Rathod

Admin Manager
D. J. Exim Pvt Ltd
B-2 Level (Lower Basement),
Nakshtra Cine Shoppe, Ranade Road,
Dadar (W), Mumbai-400028

Dear Mr. Rathod

Re: Credit Rating – Basel II ratings exercise

Please refer to our discussion on the subject of ratings of Bank Limits with my Colleague Mr
Pinku Dutta. To take our discussion further please find below the following documents for
your perusal:

a) ICRA’s track record as one of the leading Credit Rating Agencies [Part – I]
b) Commercial terms [Part – II]
c) List of information requirement [Part – III]

We look forward to an opportunity to be associated with your company’s rating plans. Should
you require any clarifications in this regard please feel free to contact me.

Sincerely

Nikhil Kunder.
Relationship Manger- Corporate Ratings. Western Region.

Electric Mansion, 3rd Floor, Tel : +91 22 30470000, +91 22 24331046/53 website: www.icraratings.com
Appasaheb Marathe Marg, +91 22 24362044, 24329109 email: mumbai@icraindia.com
Prabhadevi, Mumbai – 400 025 Fax : +91 22 24331390

Regd. Office : Kailash Building, 11th Floor, 26, Kasturba Gandhi Marg, New Delhi – 110 001.
 PART - I

Credentials of ICRA
An Associate of Moody’s Investors Service:

ICRA is one of the leading domestic credit rating agencies sponsored Moody’s, and Public
Sector banks and financial institutions. Moody’s Corporation through its indirect subsidiary
based in India holds a major stake, at 29%, in ICRA currently. Moody’s Corporation through
its wholly owned subsidiary, Moody’s Investors Service, which is a leading international rating
agency provides ICRA with an access to its global research and technical assistance.

Established in 1991, ICRA has 9 Offices located at New Delhi, Gurgaon, Mumbai, Bangalore,
Chennai, Kolkata, Hyderabad, Pune and Ahmedabad, ensuring comprehensive coverage
across most regions.

Eminent Board comprising persons with rich, diversified experience:

1. Mr. D.N. Ghosh, Formerly Chairman, State Bank of India.

2. Mr. Frederic Drevon, Senior Managing Director, Head of Europe, the Middle East and
Asia.
3. Ms Jennifer Elliott, Group Managing Director, Asia Pacific, Moody's Asia Pacific Limited.
4. Dr. Uddesh Kohli, Formerly Chairman & Managing Director, Power Finance Corporation
Limited.
5. Mr. Deepak Nayyar, Vice Chancellor, University of Delhi.
6. Mr. Amal Ganguli, Formerly, Chairman and Senior Partner of Pricewaterhouse Coopers.
7. Mr. Piyush G. Mankad, Formerly, Executive Director, Asian Development Bank.
8. Mr. P. K. Choudhury, Vice Chairman and Group CEO, ICRA.
9. Mr. Naresh Takkar, Managing Director, ICRA.

Capability statement

Track record – number of ratings done

Since 1991 till March 31st, 2007, ICRA has executed over 3750 rating assignments of debt
instruments, 75% of which are long term and medium term ratings. In 2006-07, volume of
debt rated by us was Rs 1776 billion.

The long track record as well as the large number of rating assignments done provides ICRA
with good ratings distribution at various rating levels – a significant positive compared with
rating agencies with shorter track record / lower market share.

Expertise and coverage

ICRA has built expertise in the major sectors. The key speciality areas include

 economic research,
 corporate sector including automobile, pharmaceuticals, cement and building
materials, textile, hotels, metals and mining, media, retail
 public finance including state governments, municipal and urban local bodies
 financial sector including banks, insurance companies, and financial services
companies
 infrastructure and utilities - power, oil and gas, and transportation sector
 structured finance.
These sectors are headed by a Sector Head who, in turn, is supported by a team of dedicated
analysts. Sector focus provides a specialized approach, higher level of rating consistency and
faster turnaround times. With a long track record and expertise available within, ICRA is well
placed to scale up in case of necessity. Eight offices across the country enables
comprehensive geographic coverage.

Rating process integrity

ICRA’s ratings are objective backed by a structured, standardized and criteria based
approach to assigning rating. Selection of parameters as well as the rating process is
consistent for all the rated entities. The ratings are assigned not by individuals but by the
Rating Committee - this approach minimizes individual biases and enables maintaining
objectivity in assigning ratings.

The rating assignment process is kept independent from any interference from any of the
shareholders. No employee or director of the shareholders is a director on ICRA’s Board.
[Other than those from Moody’s which is an independent rating agency]. Members that have a
conflict of interest (either on the Board of the issuers or are directly involved in sourcing
business for ICRA) do not participate in the rating assignment process.

In case of published ratings, ICRA discloses the rating methodologies, rating actions and
rationales in a timely and adequate manner. Such rating actions are communicated to stock
exchanges, news agencies and print and broadcast media at the same time. ICRA is one of
the few rating agencies that periodically publish the performance of its accepted ratings in
terms of rating transition and default rates.

Quality of ICRA ratings

The performance of ratings can be measured in terms of rating stability rates. These figures
calibrate the rating scale and the critical issue is whether these fall into a consistent band.
Greater the consistency, the more reliable the ratings are. ICRA-assigned ratings continue to
demonstrate high stability.

One-Year Transition Matrix: Long Term Ratings—2007

LAAA LAA LA LBBB NI
LAAA 95.24% 4.76% 0.00% 0.00% 0.00%
LAA 0.00% 94.00% 6.00% 0.00% 0.00%
LA 0.00% 10.00% 90.00% 0.00% 0.00%
1
LBBB 0.00% 0.00% 25.00% 75.00% 0.00%
NI: Non-investment-grade; ratings below LBBB- (viz. LBB+ till LD)
The categories of LAA, LA and LBBB include ratings with suffixes “+” and “-”
within the respective categories. Thus, for instance, the category LAA contains
three ratings, LAA+, LAA, and LAA-.

One-Year Transition Matrix: Since 2003

LAAA LAA LA LBBB NI
LAAA 97.73% 2.27% 0.00% 0.00% 0.00%
LAA 4.44% 93.89% 1.67% 0.00% 0.00%
LA 0.00% 4.55% 87.50% 6.82% 1.14%
LBBB 0.00% 0.00% 9.68% 83.87% 6.45%
NI: Non-investment-grade; ratings below LBBB- (viz. LBB+ till LD)
Default rates

1
Rating migration for this rating category appears very high because a limited number of ratings gets accepted in
this category, and as a result, the denominator remains low
The Cumulative Default Rates (CDR) trends clearly establish the inverse relationship between
ICRA-assigned ratings and the default risk, i.e. higher the rating lower the default risk, and
vice versa.

CDRs for the six–year horizon beginning 2002

CDR 1 year 2 years 3 years
LAAA 0.00% 0.00% 0.00%
LAA 0.00% 0.00% 0.00%
LA 2.62% 2.62% 2.62%
LBBB 1.36% 3.12% 3.12%

The ratings performance metrics are a critical input to investors for managing the portfolio. In
fact, in the absence of such metrics (a rating agency has to have a sufficient track record and
number of ratings across rating levels to obtain these metrics), the ratings would have far
lesser utility. ICRA is one of the few rating agencies, which has published these statistics; and
it has been publishing these since 2002. ICRA rating performance trends point to a greater
alignment of ICRA’s rating processes with international practices.
 PART - II

Commercial Terms
Credit Rating fees applicable for the proposed debt programme
The Rating fee comprises initial Rating fees and surveillance fees. The surveillance fee is
applicable only if you decide to accept the Rating. The first annual surveillance fee is payable
12 months after the Rating is assigned.

Line of Credit rating Initial Rating Fee Surveillance Fee

FB &NFB Limit : Rs 10 Cr Rs 1,25,000/- Rs 1,00,000/-

Other fee related terms and conditions:

 The initial rating fee is payable up-front along with the mandate for the amount for which
the rating is being sought.
 The annual surveillance fee is payable after 12 months if the initial rating is accepted.
 Service tax and other levies, at prevailing rates, as applicable from time to time.

Out of Pocket expenses

At actuals
 PART - III

INFORMATION REQUIREMENT

Corporate Information

 Annual Report for last 5 years , including those of the major group companies, if any
 Brief note on the history of the company and key milestones
 Brief profile of Board of Directors and Key Management Personnel
 Shareholding pattern of the company as on last quarter end
 Write-up on major subsidiaries and associates

Operating Information

 Brief note on the operations of the company

 Segment wise revenues, operating profits and capital employed for three financial
years
 Breakup of domestic and export revenues for previous three years
 Brief note on the selling and marketing arrangements followed by the company; as
well as its competitive position
 List of major clients for each product, sales (volume and value) for last three years
 Details of major capital expenditures incurred in last three year
 List of major raw materials, sources, and price trends.
 A brief note on the industry, competition, sensitivity to import duty etc

Financial Information

 Details of fund based and non-fund based limits from your bankers in the format:

Bank Facility Rate of Interest Sanction Amount

 Detailed financial projections (with assumptions) for next five financial years along
with copy of the latest CMA application submitted to your bankers
 Break-up of top debtors as on previous year and also debtors position as on latest
month end
 Drawing Power and limits utilisation for last 15 months

Month End FB Limits Utilisation Drawing Power NFB Limits Utilisation

 Outstanding debt and the repayment schedule along with the interest rates

Outstanding as on Outstanding as on
Rate of Sanction Repaymen
Bank Previous Fin. Year Previous Quarter
Interest Amount t Schedule
End End
  Bank wise exposure (if any) towards forex derivatives and MTM position

  During last financial As on 31.3.2009 As on last month end

year (2008-09)
Forex derivatives      
Notional value of underlying NA Required Required
Maximum notional value Required NA NA
Mark to market loss NA Required Required
Profit/ loss booked during Required NA NA
Any other derivatives      
Notional value of underlying NA Required Required
Maximum notional value Required NA NA
Mark to market loss NA Required Required
Profit/ loss booked during Required NA NA

 A confirmation, signed on the letter head of the company, that there has been no
delay or default in payment of interest or principal on any debt obligations in the last
six months. In case of delays, kindly mention the due date for repayment and actual
date of repayment.

Balance sheet break-ups and other details, as applicable, will be requested for during
the actual rating exercise. This is only representative and the actual requirements may
vary somewhat depending on the specifics of the case.