MIRA INFORM REPORT

Report Date :

17^TH June 2006

IDENTIFICATION DETAILS

Name :	NOSCH LABS PRIVATE LIMITED
Registered Office :	Flat No. 201 & 202, Bhanu Enclave, 7-1-638 to 643/1, Sunder Nagar, Erragadda, Hyderabad – 500 038, Andhra Pradesh, India
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	02.08.2001
Com. Reg. No.:	01-37086
CIN No.: [Company Identification No.]	U24231AP2001PTC037086
TAN No.: [Tax Deduction & Collection Account No.]	HYDN00704E
Legal Form :	Private limited liability company
Line of Business :	Carry on the business of manufacture, process, sell, buy, deal, export & import in all types of drugs, drug intermediates, pharmaceutical & medical preparations, chemical and other. The company is also engaged in connected materials and to obtain patents for them

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Maximum Credit Limit :	USD 175000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company having satisfactory track. Profit margin is under pressure. Trade relations are fair. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Flat No. 201 & 202, Bhanu Enclave, 7-1-638 to 643/1, Sunder Nagar, Erragadda, Hyderabad – 500 038, Andhra Pradesh, India
Tel. No.:	91- 40-23818065 / 23704075 / 23818059 / 23818068
Fax No.:	91-40-23818059
E-Mail :	hyd2_nosch@sancharnet.in
Website :	http://www.noschlabs.com
Location :	Owned
Factory :	Bonthapally, Hyderabad, Andhra Pradesh, India 15-5-35/33/3, Prashanthinagar, Kukatpally, Hyderabad – 500 038, Andhra Pradesh, India Syno 14, IDA Gadda Potharam Village, Kazipally Jinnaram, Medak District, Andhra Pradesh, India
Status :	Owned

DIRECTORS

Name :	Dr. Bhimireddy Satyanarayana Reddy
Designation :	Managing Director
Address :	Plot No. 10 B, Srinivasa Nagar Medical Society, Water Tank Lane, Kukatpally, Hyderabad, Rangareddy, Andhra Pradesh – 500072
Date of Birth/Age :	14.01.1964
Date of Casing :	01.10.2006
Date of Appointment :	01.10.2001
Name :	Mr. Desireddy Kesava Reddy
Designation :	Whole Time Director
Address :	Flat No. T 1, plot No. 144, OM Shakti Towers, Moti Nagar, Erragadda, Hyderabad, Rangareddy, Andhra Pradesh – 500072
Date of Birth/Age :	02.06.1960
Date of Casing :	27.06.2005
Date of Appointment :	01.10.2001
Name :	Mr. Dodda Vera Venkata Satyanarayana Reddy
Designation :	Director
Address :	A / Pujithaapts, Sunder Nagar, Hyderabad, Rangareddy, Andhra Pradesh – 500038
Date of Birth/Age :	10.06.1917
Date of Appointment :	01.10.2001
Name :	Mr. Tummuru Rajasekhar Reddy
Designation :	Director
Address :	Plot No. 15 B, Srinivasa Nagar Medical Society, Water Tank Lane, Kukatpally, Hyderabad, Rangareddy, Andhra Pradesh – 500072
Date of Birth/Age :	19.02.1973
Date of Appointment :	01.10.2001
Name :	Ch. Venkata Nageswara Rao
Designation :	Director
Address :	Plot No. 1, Sirishaapts, Yellareddyguda, Hyderabad, Rangareddy, Andhra Pradesh – 500073
Date of Birth/Age :	15.10.1948
Date of Casing :	15.09.2003
Date of Appointment :	21.02.2003

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
Dr. Bhimireddy Satyanarayana Reddy	225000
Mr. Tummuru Rajasekhar Reddy	93750
Mr. Dodda Vera Venkata Satyanarayana Reddy	116750
Bhimireddy Vijayalakshmi	45000
Mr. Bhimireddy Goutham Reddy	15000
Mr. Bhimireddy Vivek Reddy	15000
Mr. Bhimireddy Gopi Reddy	7500
Mr. Bhimireddy Kanthamma Reddy	7500
Mr. Tummuru Rajasekhar Reddy	30000
Tummuru Radhadevi	33750
Mr. Tummuru Venkatarami Reddy	30000
Mr. Tummuru Avinash Reddy	15000
Dodda Madhavi	33750
Dodda Vijaya Spandana	29500
Konda Dayakar Reddy	3000
Appala Ramprasad	7500
Mandapati Satyanrayaa A Reddy	7500
Mandapati Shobarani	7500
Mandapati Krishina Reddy	1875
Attunuri Nivasa Reddy	1875
Bhimireddy China Krishna Reddy	1875
Attunuri Venkata Reddy	1875
Dodda Vijay Samhita	16250
Gali Pradeep Chodhyry	1500
Kanubadhula Sangeetha	1000
Chennareddy Sasidhar Reddy	750
Desireddy Umadevi	15000
Miryala Srinivasa Rao	2250
Danda Venkatrami Reddy	4500
Mandapati Malavika	7500
Mandapati Sushma	11250
Gaddam Srinivasa Reddy	3000
Chilukuri Sridhareddy	3000
Bhimireddy Srinivasa Reddy	3000
Munnagi Kishore Reddy	3000
Mahadeva Veera Bhramha Chary	4500
Bhimireddy Satyanarayana Reddy	3750
Verram lavanya	7500
Verram Bharat Reddy	11250
Bhimireddy Anitha	6250
Desireddy Dhamani	12500
Desireddy Umadevi	7500
Bhimireddy Krishnareddy	25000
Desireddy Neehareddy	15000
Desireddy Kesavareddy	25000
Mandapati Kishorereddy	15000
Desireddy Dhamani	7250
Desireddy Kesavareddy	47500
Desireddy Kesavareddy	2500
Mandapati Kishoreddy	7500
Bhireddy Krishnareddy	12500
Desireddy Neehareddy	7500

BUSINESS DETAILS

Line of Business :

Carry on the business of manufacture, process, sell, buy, deal, export & import in all types of drugs, drug intermediates, pharmaceutical & medical preparations, chemical and other. The company is also engaged in connected materials and to obtain patents for them

Products :

Product Description	ITC Code No:
Bulk Drugs and Intermediates	2942.00

PRODUCTION STATUS

Particulars	Installed Capacity	Actual Production
Bulk Drugs and Intermediates (Manufactured goods)	150 MT (varies based on product Mix as certified by Management)	133963.83 Kgs
Formulations	--	9057600

GENERAL INFORMATION

No. of Employees :

Around 160

Bankers :

UTI Bank

Begumpet, Hyderabad, Andhra Pradesh, India

Facilities :

Particulars	31.03.2005 Rs. in millions
SECURED LOANS
Hire Purchase Loans	1.303
OCC with UTI Bank	25.732
Term Loans with UTI Bank	24.000
TOTAL	51.035

Banking Relations :	Satisfactory
Auditors :	Suryanarayana Reddy & Company Chartered Accountants
Address :	D No. 8-3-941, Flat No. 504, Vijayashree Apartments, Opposite Kamma Sangam, Ameerpet, Hyderabad – 500073, Andhra Pradesh, India

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1,000,000	Equity Shares	Rs. 10/-	Rs. 10.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
750000	Equity Shares	Rs. 10/-	Rs. 7.500 millions
	Share Application Money		Rs. 0.500 millions
	Total		Rs. 8.000 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004	31.03.2003
SHAREHOLDERS FUNDS
1] Share Capital		8.000	8.000	5.000
2] Reserves & Surplus		37.376	24.115	11.222
NETWORTH		45.376	32.115	16.222
LOAN FUNDS
1] Secured Loans		51.035	25.393	6.175
2] Unsecured Loans		2.650	0.664	3.613
TOTAL BORROWING		53.685	26.057	9.788
DEFERRED TAX LIABILITIES		5.658	3.301	1.271
TOTAL		104.719	61.473	27.281
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		77.742	43.284	19.077
Capital work-in-progress				0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	41.366	41.540	23.091
	Sundry Debtors	57.868	55.211	26.540
	Cash & Bank Balances	1.396	1.288	3.199
	Loans & Advances	23.033	12.547	5.874
Total Current Assets		123.663	110.586	58.704
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	91.713	87.326	46.876
	Provisions	5.043	5.175	3.712
Total Current Liabilities		96.756	92.501	50.588
Net Current Assets		26.907	18.085	8.116
MISCELLANEOUS EXPENSES		0.070	0.104	0.088
TOTAL		104.719	61.473	27.281

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Sales Turnover [including other income]	345.643	269.017	160.992
Profit/(Loss) Before Tax	20.690	20.098	13.925
Provision for Taxation	7.429	7.205	4.745
Profit/(Loss) After Tax	13.261	12.893	9.180
Export Value	104.560	41.022	35.308
Import Value	25.921	18.176	7.320
Total Expenditure	324.953	248.918	147.066

KEY RATIOS

PARTICULARS		31.03.2005	31.03.2004	31.03.2003
PAT / Total Income	(%)	3.84	4.79	5.70
Net Profit Margin (PBT/Sales)	(%)	5.99	7.47	8.65
Return on Total Assets (PBT/Total Assets}	(%)	10.27	13.06	17.90
Return on Investment (ROI) (PBT/Networth)		0.46	0.63	0.86
Debt Equity Ratio (Total Liability/Networth)		3.32	3.69	4.79
Current Ratio (Current Asset/Current Liability)		1.28	1.20	1.16

LOCAL AGENCY FURTHER INFORMATION

REVIEW OF THE BUSINESS:

During the year under report the company achieved a turnover of Rs. 347.126 millions as against Rs. 256.826 millions in the previous year and earned a net profit of Rs. 13.261 millions (previous year Rs. 12.893 millions) after providing Income Tax and Deferred Tax of Rs. 7.429 millions (previous year Rs. 7.205 million). The directors are confident of achieving better results in the year to come.

FIXED ASSETS:

Ø Land

Ø Building

Ø Plant and machinery

Ø Lab equipment

Ø Office equipment

Ø Equipments

Ø Furniture

Ø Computers

Ø Vehicles

TRADE TERMS :

Ø Prudential Pharmaceuticals Limited

Ø Anjali Chemi Corporation

Ø RMS Research labs Private limited

Ø Metrochem Industries

Ø Morvel Organics

Ø Rakshit Drugs Private limited

Ø Pavan Micro Equipments

Ø Perfect Fabs

Ø Millenium Industries

Ø Ankar Engineers and Fabrications

Ø Creative Instruments and Controls

Ø J K Fabrications

Ø Vision Lab Equipments

Ø Polmon Instruments Private Limited

PRODUCT RANGE :

Ø Drugs

Ø Drug Intermediates

Ø Pharmaceutical

Ø Medical Preparations

Ø Chemical and Other

Name of the company

NOSCH LABS PRIVATE LIMITED

Presented By

Dr. B Satyanarayana Reddy , Managing Director

1) Date and description of instrument creating the change

Date 08.04.2002

Letter of arrangement, cash credit advance

General under taking / indemnities letters of credit CCD – 6

Omnibus counter indemnity for Guarantee limit CCD – 7,

Undertaking for Bills purchased / discounted / negotiated inland / foreign CCD – 9

Agreement for hypothecation of current assets CCD – 13

Deed of hypothecation of machinery and other movable fixed assets – CCD – 15

2) Amount secured by the charge/amount owing on the securities of charge

Rs. 7.000 millions

Facility	Limit (Rs in millions)
Cash Credit	3.500
(Sub limit PC)	(1.000)
Bills discounting (Inland / Foreign)	1.000
Foreign Letter of credit	2.000
Bank Guarantee	0.500
Total	7.000

3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

First charge on entire current assets of the company collateral security on entire existing and proposed fixed assets except vehicles of the company

4) Gist of the terms and conditions and extent and operation of the charge.

CC rate on interest 14 % (PLR + 2%)

Rate of interest linked to PLR. Subject to change linked to PLR. Subject to change time to time.

5) Name and Address and description of the person entitled to the charge.

UTI Bank Limited

Secunderabad Branch R P Road

Secunderabad – 3

(the loan account of the company were transferred form Secunderabad branch of UTI Bank limited to their begum pet branch)

UTI Bank Limited

Begumpet Branch

6-3-879 / B, Greenlands Road,

Begumpet, Hyderabad – 16

6) Date and brief description of instrument modifying the charge

20.11.2004

Agreement for hypothecation of current assets – CCD – 13

Deed of hypothecation of machinery and other movable fixed assets - CCD – 15

Letter of confirmation of extension of equitable mortgage on company immovable property – 2 Nos.

Term Loan agreement - CCD – 5

Undertaking for Bills purchased / discounted / negotiated inland / foreign CCD – 9

Omnibus counter indemnity for Guarantee limit CCD – 6

Letter of arrangement cash credit advance - CCD – 3

Agreement cum indemnity for Export Credit - CCD – 8

7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

The UTI Bank Limited, Begumpet branch has enhanced the credit limits as follows :

Facility	Existing Limits	Revised Limits
Cash Credit	20.000	30.000
Export Packing Credit	5.000	9.000
Bills discounting (Inland / Foreign)	5.000	9.000
Letter of credit	10.000	17.500
Bank Guarantee	1.000	6.000
Term Loan – I	6.000	6.000
Term Loan – II	8.000	8.000
Term Loan – III	--	15.000
Total	45.000	82.500

Sub limit under cash credit

The above loan facilities of Rs. 82.500 millions are secured by :

First charge on the entire current assets, present and future, of the company.

First charges on the entire fixed assets, present and future, (except vehicles acquired under the hire purchase scheme) of the company.

Personal Guarantee of Promoter directors viz, Dr. B Satyanarayana Reddy, Sri D. Kesava Reddy, Sri D. V. V. S. Reddy and Sri T. Raja Sekhar Reddy.

Equitable mortgage of open plot bearing No. 567, in Sy. No. 136 Bachupally Village, Qutbullapur Mandal R R dist standing in the name of Smt. B Vijayalakshmi managing Director of the Company.

Equitable mortgage of plot No. 1081 in Survey No. 54, Mathusti Co-operative Building Society Limited, Block No. 1, hafeezpet Village, Seriligampally manadal and Muncipality, R R District, Standing in the name of Shri D Kesava Reddy Director.

Personal guarantee of Mr. Vijayalakshmi

Cash credit interest has to be calculated@ BPLR – 0.75 % i.e. 11.25 % p.a. present at monthly rests.

The term loan – III is repayable in initial 24 monthly installments of Rs. 2.50 each, commencing form 30.04.2005 till 31.03.2007 and thereafter in 18 monthly installments of Rs. 5.00 each commencing form 30.04.2007 to 31.09.2008.

Term loan – III interest has to be calculated @ BPLR – 0.40 % i.e. 11.60 % p.a. at present at monthly rests.

Name of the company

NOSCH LABS PRIVATE LIMITED

Presented By

Dr. B Satyanarayana Reddy , Managing Director

1) Date and description of instrument creating the change

Date 21.06.2004

Corporate Loan Agreement – CCD – 5

Omnibus counter indemnity for Guarantee limit CCD – 7,

Agreement for hypothecation of current assets CCD – 13

Deed of hypothecation of machinery and other movable fixed assets – CCD – 15

2) Amount secured by the charge/amount owing on the securities of charge

Rs. 4.500 millions

Facility	Limit (Rs in millions)
Corporate Loan	2.000
Bank Guarantee	2.500
Total	4.500

3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

First charge on entire current assets of the company

First charges on the entire fixed assets, present and future, (except vehicles acquired under the hire purchase scheme) of the company.

Personal Guarantee of Promoter directors viz, Dr. B Satyanarayana Reddy, Sri D. Kesava Reddy, Sri D. V. V. S. Reddy and Sri T. Raja Sekhar Reddy.

4) Gist of the terms and conditions and extent and operation of the charge.

CC rate on interest 12.50 % (PLR + 0.50%)

Rate of interest linked to PLR. Subject to change linked to PLR. Subject to change time to time.

5) Name and Address and description of the person entitled to the charge.

UTI Bank Limited

Begumpet Branch

6-3-879 / B, Greenlands Road,

Begumpet, Hyderabad – 16

6) Date and brief description of instrument modifying the charge

Not Applicable

7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

Not Applicable

Name of the company

NOSCH LABS PRIVATE LIMITED

Presented By

Dr. B Satyanarayana Reddy, Managing Director

1) Date and description of instrument creating the change

Date 08.04.2002

Letter of arrangement, cash credit advance

General under taking / indemnities letters of credit CCD – 6

Omnibus counter indemnity for Guarantee limit CCD – 7,

Undertaking for Bills purchased / discounted / negotiated inland / foreign CCD – 9

Agreement for hypothecation of current assets CCD – 13

Deed of hypothecation of machinery and other movable fixed assets – CCD – 15

2) Amount secured by the charge/amount owing on the securities of charge

Rs. 7.000 millions

Facility	Limit (Rs in millions)
Cash Credit	3.500
(Sub limit PC)	(1.000)
Bills discounting (Inland / Foreign)	1.000
Foreign Letter of credit	2.000
Bank Guarantee	0.500
Total	7.000

3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

First charge on entire current assets of the company collateral security on entire existing and proposed fixed assets except vehicles of the company

4) Gist of the terms and conditions and extent and operation of the charge.

CC rate on interest 14 % (PLR + 2%)

Rate of interest linked to PLR. Subject to change linked to PLR. Subject to change time to time.

5) Name and Address and description of the person entitled to the charge.

UTI Bank Limited

Secunderabad Branch R P Road

Secunderabad – 3

(the loan account of the company were transferred form Secunderabad branch of UTI Bank limited to their begum pet branch)

UTI Bank Limited

Begumpet Branch

6-3-879 / B, Greenlands Road,

Begumpet, Hyderabad – 16

6) Date and brief description of instrument modifying the charge

03.12.2005

Supplementary agreement for hypothecation for stocks book debts, receivable, movable assets etc.

Undertaking for Bills purchased / discounted / negotiated inland / foreign CCD – 9

Omnibus counter indemnity for Guarantee limit CCD – 6

Letter of arrangement cash credit advance - CCD – 3

Agreement cum indemnity for Export Credit - CCD – 8

7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

The UTI Bank Limited, Begumpet branch has enhanced the credit limits as follows :

Facility	Existing Limits	Revised Limits
Cash Credit	30.000	40.000
Export Packing Credit	9.000	15.000
Bills discounting (Inland / Foreign)	9.000	15.000
Letter of credit	17.500	37.500
Bank Guarantee	6.000	2.500
Term Loan – I	6.000	6.000
Term Loan – II	8.000	8.000
Term Loan – III	15.000	15.000
Total	82.500	109.000

Sub limit under cash credit

The above loan facilities of Rs. 109.000 millions are secured by :

First charge on the entire current assets, present and future, of the company.

First charges on the entire fixed assets, present and future, (except vehicles acquired under the hire purchase scheme) of the company.

Personal Guarantee of Promoter directors viz, Dr. B Satyanarayana Reddy, Sri D. Kesava Reddy, Sri D. V. V. S. Reddy and Sri T. Raja Sekhar Reddy.

Equitable mortgage of open plot bearing No. 567, in Sy. No. 136 Bachupally Village, Qutbullapur Mandal R R dist standing in the name of Smt. B Vijayalakshmi managing Director of the Company.

Equitable mortgage of plot No. 1081 in Survey No. 54, Mathusti Co-operative Building Society Limited, Block No. 1, hafeezpet Village, Seriligampally manadal and Muncipality, R R District, Standing in the name of Shri D Kesava Reddy Director.

Personal guarantee of Mr. Vijayalakshmi

Cash credit interest has to be calculated@ BPLR – 0.75 % i.e. 11.25 % p.a. present at monthly rests.

Export packing credit interest has to be calculated as per extent bank / RBI guiding at monthly rests.

UP to 180 days: 8.50 %( BPLR – 3.50 %)

Beyond 180 days and up to 270 days 12.50 %

Foreign Bills discount interest has to be calculated to the extend Bank / RBI guidelines,. Presently as under

Demand Bills : 8.50 % (BPLR 3.50 %)

Beyond 90 days and up to 6 month : 12.50 %

(BPLR + 0.50 %)

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 records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

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

3] Asset Declaration :

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

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

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

Charges or investigation registered against subject: None

7] Criminal Records

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

8] Affiliation with Government :

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

9] Compensation Package :

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

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

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

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

CONTRAVENTION

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 45.91
UK Pound	1	Rs. 84.63
Euro	1	Rs. 57.74

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		43

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		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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions