MIRA INFORM REPORT

Report Date :

25.04.2007

IDENTIFICATION DETAILS

Name :	BAY FORGE LIMITED
Formerly Known As :	FOMAS INDIA LIMITED
Registered Office :	39, Shanmugam Road West, Tambaram, Chennai-600045, Chennai-600045, Tamilnadu
Country :	India
Financials (as on) :	31.12.2005
Date of Incorporation :	17.07.1990
Com. Reg. No.:	18-19404
CIN No.: [Company Identification No.]	U27209TN1990PLC019404
TAN No.: [Tax Deduction & Collection Account No.]	CHEF00234D
PAN No.: [Permanent Account No.]	AAACF0453D
Legal Form :	Closely held Public Limited Liability Company.
Line of Business :	Manufacturers of Ferrous and Non Ferrous Forgings.

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 1260000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. 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 :	39, Shanmugam Road West, Tambaram, Chennai-600045, Chennai-600045, Tamilnadu, India
Tel. No.:	91-44-22263173/ 265192
Fax No.:	91-4115-265191
E-Mail :	bay-forge@vsnl.net
Head Office/ Factory :	Padalam X Road, Palayanoor P O, Vedanthangal Road, Madurantakm Taluk, Kanchipuram-603308, Tamilnadu, India
Tel. No.:	91-4115-265192/ 291/ 292
Fax No.:	91-4115-265191
E-Mail :	bay-forge@vsnl.net

DIRECTORS

Name :	Mr. Jagdish Narain Sapru
Designation :	Chairman
Address :	Flat No.2A, Sunflower Court, 7, Lovelock Place, Kolkata-700019, West Bengal
Date of Birth/Age :	16.11.1933
Date of Appointment :	24.09.2004
Name :	Dr. Massimo Guzzoni
Designation :	Director
Address :	Via Telesio, N 23, Milan, Italy
Date of Birth/Age :	02.01.1939
Date of Appointment :	08.09.1995
Name :	Dr. Jacopo Guzzoni
Designation :	Director
Address :	Via Cantoni, No.3, Milan, Italy
Date of Birth/Age :	03.10.1962
Date of Appointment :	30.06.2003
Name :	Mr. Gottardi Francesco
Designation :	Director
Address :	6592, S Antanino CH, Switzerland
Date of Birth/Age :	13.04.1925
Date of Appointment :	30.06.2003
Date of Ceasing :	02.05.2005
Name :	Mr. D’Aste Franco
Designation :	Director
Address :	Via Berna N6, 22055 Merate co, Italy
Date of Birth/Age :	18.08.1943
Date of Appointment :	13.12.2002
Date of Ceasing :	02.05.2005
Name :	Dr. Arnaldo Zanfrini
Designation :	Director
Address :	Via Mirabello, 31, 22100 Corno, Italy
Date of Birth/Age :	30.04.1946
Date of Appointment :	02.05.2005
Name :	Mr. R C Mohan
Designation :	Whole time Director
Address :	No.5, 2^nd Street, Dr. Radhakrishnan Salai, Mylapore, Chennai-600004, Tamilnadu
Date of Birth/Age :	02.02.1948
Date of Appointment :	02.01.2003
Name :	Mr. Francesco Faresin
Designation :	Managing Director
Address :	Via A Moro, 10, 3642, Breganze (VI), Italy
Date of Birth/Age :	16.05.1951
Date of Appointment :	07.03.2005
Name :	Mr. V Manoharan
Designation :	Director
Address :	Plot No.6, First Main Road, Alamelupuram, Opposite Bharat Engineering College, Selaiyur, Chennai-600073, Tamilnadu
Date of Birth/Age :	07.08.1941
Date of Appointment :	02.05.2005
Name :	Mr. S Caporossi
Designation :	Director
Address :	Via Lepetit, 4 Milan, Italy
Date of Birth/Age :	29.06.1949
Date of Appointment :	02.05.2005
Name :	Mr. N Narayanswamy
Designation :	Director
Name :	Mr. N Lakshmanan
Designation :	Director
Name :	Mr. M K Kumar
Designation :	Director
Name :	Mr. E K Parthasarathy
Designation :	Director
Name :	Mr. Carlo Del Carretto
Designation :	Managing Director
Address :	6/7, Bay Watch Farms, Vettuvankeni, Padian Nagar, Chennai-600041, Tamilnadu
Date of Birth/Age :	31.03.1958
Date of Appointment :	18.10.2006

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
Mr. R C Mohan	1000
Mr. Shamir Sanyal	1000
Mr. N Narayanaswamy	28600
Mr. N Narayanaswamy	68900
Mr. N Narayanaswamy	1700
Fomas S P A	112500
Ms. Uma Mohan	2000
Mr. N Narayanaswamy	546200
Mr. N Narayanaswamy	750
Mr. N Narayanaswamy	45000
Mr. N Narayanaswamy	44910
Fomas S P A	351740
Fomas S P A	100000
Mr. J N Sapru and Mrs. Gita Sapru	100000
Mr. J N Sapru and Mrs. Gita Sapru	100000
Mr. J N Sapru and Mrs. Gita Sapru	100000
Mr. J N Sapru and Mrs. Gita Sapru	100000
Mr. J N Sapru and Mrs. Gita Sapru	100000
Mr. J N Sapru and Mrs. Gita Sapru	26125
Mr. N Narayanaswamy	430090
Mr. N Lakshmanan	3000
Ms. Sita Narayanaswamy	10000
Ms. Sita Narayanaswamy	2500
Ms. Sita Narayanaswamy	20000
Uttara Enterprises	10000
Mr. Venkatesh	1000
Ms. Saroja Sekar	2000
Sri Venkatesh	1000
Sri Venkatesh	1000
Fomas S P A	22370760
Sambhu N Lakshmanan	3000
Ms. Meenakshi Lakshmanan	3000
Ms. Meenakshi Nagaswamy	4000
Mr. Hamsa S Iyer	5000
Mr. Hamsa S Iyer	10000
Mr. C B Jansi Reddy	1000
Mr. R Sugumaran	1000
Mr. P K Adishesha	1000
Mr. Nansy Seru	3500
Mr. Sumit Seru	3500
Mr. Amit Seru	3500
Mr. Nagalakshmi Lakshmanan	3000
Ms. Meena Bery	5000
Sivan Securities Private Limited	180000
Mr. Anand Kumar	50000
Mr. Anand Kumar	10000
Mr. S Bhuvaneswari	10000
Tamilnadu Industrial Development Corporation Limited	93750
Fomas S P A	120000000

BUSINESS DETAILS

Line of Business :

Manufacturers of Ferrous and Non Ferrous Forgings.

Products :

Product Description	ITC Code
Steel Forgings of all kinds	73260000

PRODUCTION STATUS

As on 31.03.2005

Particulars	Unit	Actual Production
Steel forgings and rings (Proof machined)	MT	1758.9
Aluminium rings (Proof machined)	MT	106.5
Total	MT	1865.4

GENERAL INFORMATION

Suppliers :

v Hat Rubbers

v Pentagon Lubricants

v Sudagar Biological & Chemicals, Sun Engineering

v Viking Springs

v Arul Murugan Engineering Works

v Hargo’s Alloy Foundry

v Precision Machines & Equipments Private Limited

v R C Das Engineering Private Limited

v Kartick Engineering

No. of Employees :

Around 600

v State Bank of India, Overseas Branch, 86, Rajaji Salai, Chennai-600001

v State Bank of Travancore, Commercial Branch, Jeevan Anadn, No.556, Mount Road, Tenyampet, Chennai-600018, Tamilnadu

Bankers :

Facilities :

Secured Loans (As on 31.12.2005) :

(Rs. In millions)

Term loan from Banks
Cash Credit	36.416
Others	27.733
Total	67.724

Unsecured Loans :

Short Term loan from Banks	83.500
Interest free loan from a bank	63.332
Loan from holding company	8.000
Total	154.832

Banking Relations :	Satisfactory
Auditors :
Name :	BSR & Associates Chartered Accountants
Address :	Wescare Towers, 16, Cnotaph Road, Teynampet, Chennai-600018, Tamilnadu
Holding Company :	Fomas SPA, Italy
Associates/Subsidiaries :	Asfo SPA, Italy Hotroll S.r.l., Italy

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
200000000	Equity Shares	Rs.1/- each	Rs.200.000 millions
1600000	Preference Shares	Rs.100/- each	Rs.160.000
	Total		Rs.360.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
145076025	Equity Shares	Rs.1/- each	Rs.145.076 millions
1600000	Preference Shares	Rs.100/- each	Rs.160.000 millions
	Total		Rs.305.076 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2005	31.12.2004
SHAREHOLDERS FUNDS
1] Share Capital		305.076	305.076
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		10.926	10.926
4] (Accumulated Losses)		(0.201)	(84.736)
NETWORTH		315.801	231.266
LOAN FUNDS
1] Secured Loans		67.724	15.519
2] Unsecured Loans		154.832	121.123
TOTAL BORROWING		222.556	136.642
DEFERRED TAX LIABILITIES		0.000	0.000
TOTAL		538.357	367.908
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		309.006	275.853
Capital work-in-progress		23.973	5.235
INVESTMENT		0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	320.489	148.752
	Sundry Debtors	111.428	59.359
	Cash & Bank Balances	15.410	51.991
	Other Current Assets	0.000	0.000
	Loans & Advances	19.122	12.368
Total Current Assets		466.449	272.470
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	259.926	235.184
	Provisions	1.145	3.313
Total Current Liabilities		261.071	238.497
Net Current Assets		205.378	33.973
MISCELLANEOUS EXPENSES		0.000	52.847
TOTAL		538.357	367.908

PROFIT & LOSS ACCOUNT

PARTICULARS		31.12.2005	31.12.2004
Sales Turnover		766.534	205.537
Other Income		13.344	2.611
Total Income		779.878	208.148
Profit/(Loss) Before Tax		81.822	23.682
Provision for Taxation		0.000	0.000
Profit/(Loss) After Tax		81.822	23.682
Earnings in Foreign Currency :
	Export Earnings
	Commission Earnings	1.055	0.258
	Other Earnings	1.453	0.542
Total Earnings		2.508	0.800
Imports :
	Raw Materials	87.465	28.823
	Stores & Spares	0.897	0.189
	Capital Goods	13.424	--
Total Imports		101.786	29.012
Expenditures :
	Raw Material Consumed	398.771	90.456
	Salaries, Wages, Bonus, etc.	25.694	12.152
	Managerial Remuneration	5.111	1.859
	Payment to Auditors	0.575	0.158
	Interest	23.035	9.365
	Insurance Expenses	1.596	0.682
	Power & Fuel	81.512	27.748
	Other Expenditure	161.762	42.046
Total Expenditure		81.822	23.682

KEY RATIOS

PARTICULARS		31.12.2005	31.12.2004
PAT / Total Income	(%)	10.49	11.38
Net Profit Margin (PBT/Sales)	(%)	10.49	11.38
Return on Total Assets (PBT/Total Assets}	(%)	10.55	4.32
Return on Investment (ROI) (PBT/Networth)		0.26	0.10
Debt Equity Ratio (Total Liability/Networth)		1.53	1.62
Current Ratio (Current Asset/Current Liability)		1.79	1.14

LOCAL AGENCY FURTHER INFORMATION

Form 8 Particular for creation or modification of charges

Name of the company

BAY FORGE LIMITED

(hereinafter referred to as the company)

Presented By

State Bank of India, Overseas Branch, 86, Rajaji Salai, Chennai-600001 and Bay Forge Limited.

1) Date and description of instrument creating the change

22.07.2005.

Agreement of loan fro overall limit in Form C-1.

Agreement of hypothecation of goods and assets Form C2.

Letter regarding grant of individual limits within overall limit in Form C-5.

No instrument. Equitable mortgage by way of deposit of title deeds of the company’s immovable properties

All dated 22.07.2005 relate to one and the same charge.

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

Amount secured by the charge amount owing on security of the charge Rs.210.000 millions.

Facilities	Limit (Rs. In millions)
Fund Based
Cash Credit	35.000
Term Loan	30.000
Total fund based	650.000
Non fund based
Letter of credit	*70.000
Bank guarantee	*75.000
Total non fund based	145.000
Total FB and NFB	210.000

* Fully interchangeable

Together with interest, cost and other expenses which may be debited to the account from acquisition of property should be given.

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 pari pasu charge on :

The company’s current assets in the form of raw materials, semi finished, finished goods, store and spares, receivables and other current assets;

Hypothecation of plant and machinery valued at Rs.156.300 millions (WDV as on 31.12.2004); ad the following immovable properties of the company:

All that piece and parcel of the land and building comprised in Survey No.174, 176, 177, 270, 271, 272, 273 ti an extent of 15.86 acres valued at Rs.112.500 millions value as on 31.12.2004 located at Pukkadurai Vaillage, Madhruanthagam Taluk, and the description of the properties are hereunder :

Survey No.	Land in Acres
176/1A	0.60
176/1C	0.26
272/1	2.80
174/1B	1.48
175	0.52
271/B	0.23 ½
271/3	0.24
270/7	0.53
270/6	0.13
271	0.23 ½
270/7	0.31

Survey No.	Land in Acres
270/8	0.35
174/1A	0.61
174/2	0.39
176/1B	0.56
176/2A	0.20
177/1	0.70
177/2	0.65
177/3	0.54
271/1A	0.23
273/1	4.29

Situate within the Registration Distriuct of Kancheepuram together with buildings, existing and/or to be constructed, as security for the credi limit of Rs.210.000 millions granted by State Bank of India, Oveerseas Branch, Chennai-600001, to the company as detailed in Column 2 above,

With

State Bank of Travancore, Commercial branch, Kilpauk, Chennai-600010 for its credit limit of Rs.241.000 millions comprising of :

Facilities	Limit (Rs. In millions)
Fund Based
Cash Credit	40.000
Inland Bills	15.000
Medium term loan	36.000
Total fund based	91.000
Non fund based
Letter of credit	50.000
Bank guarantee	100.000
Total non fund based	150.000
Total FB and NFB	241.000

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

Rate of interest :

Cash Credit: FCNRB Demand Loan : 3.50% above 6 month LIBOR. Interest will be applied at monthly rests.

Term loan I : interest @ 1.50% p.a. below SBAR, minimum of 8.75% p.a. interest payable monthly.

Margin :

Cash Credit :

Raw Materials

Domestic/Imported 25%

Stock in process 25%

Receivables (cover period – 90 days) 25%

Letter of Credit 25%

Bank Guarantee 25%

Term Loan 25%

Repayment of Term loan :

Repayable in 36 monthly installments commencing from January 2006 as under :

(Rs. In millions)

Year	Instal	Amount	Total Amount
2006	12	0.825	9.900
2007	12	0.825	9.900
2008	12	0.850	10.200
Total	36		30.000

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

State Bank of India, Overseas Branch, 86, Rajaji Salai, Chennai-600001

6) Date and brief description of instrument modifying the charge

Supplemental agreement for loan for increase in the overall limit in Form C1-A dated 20.01.2006.

Supplemental agreement of hypothecation of goods and assets fro increase in the overall limit in Form C2A dated 20.01.2006.

Supplemental agreement of pledge of goods and assets for increase in the overall limit inform C3-A dated 20.01.2006.

Letter regarding the grant of individual limits within the overall working capital limit in Form C5 dated 20.01.2006.

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.

This modification is filed with an intent to extend the collateral security of properties in Pukkadurai village listed above already offered as collateral security to the bank for securing limits of Rs.210.000 millions, to secure the enhanced/ modified limits of Rs.330.000 millions vide sanction letter of the bank dated 06.01.2006.

Enhanced / Modified
Facilities	Limit (Rs. In millions)
Fund Based
Cash Credit	35.000
Term Loan	150.000
Total fund based	185.000
Non fund based
Letter of credit	*70.000
Bank guarantee	*75.000
Total non fund based	145.000
Total FB and NFB	330.000

* Fully interchangeable

Together with interest, cost and other expenses which may be debited to the account from time to time.

Margins :

Cash Credit	Existing	Proposed
Raw Materials
Domestic/Imported	25%	25%
Stock in process	25%	25%
Receivables (cover period – 90 days)	25%	25%
Letter of Credit	25%	10%
Bank Guarantee	25%	10%
Term Loan	25%	29%

Rate of interest :

Cash credit : 0.25% p.a. below SBAR, minimum 10% p.a. payable monthly.

Term loan I : 1.50% below SBAR, minimum of 8.75% p.a. interest payable monthly.

Term loan II (New) : 1.50% p.a. below SBAR, minimum of 8.75% p.a. interest payable monthly.

Repayment of Term Loan I :

Repayable in 36 monthly installments commencing from January 2006 as under :

(Rs. In millions)

Year	Instal	Amount	Total Amount
2006	12	0.825	9.900
2007	12	0.825	9.900
2008	12	0.850	10.200
Total	36		30.000

Repayment of Term Loan II :

Repayable in 60 monthly installments commencing from October 2006 as under :

(Rs. In millions)

Year	Instal	Amount	Total Amount
2006	12	2.000	6.000
2007	12	2.000	24.000
2008	12	2.000	24.000
2009	12	2.000	24.000
2010	12	2.000	24.000
2011	9	2.000	18.000
Total	60		120.000

Corporation identity number or foreign company registrations number of the company	U27209TN1990PLC019404
Name of the company	BAY FORGE LIMITED
Address	39, Shanmugam Road West, Tambaram, Chennai-600045, Chennai-600045, Tamilnadu, India
This Form is for	Modification of charge
Type of Charges	Hypothecation Equitable mortgage or mortgage of property by depositing the title deeds
Particular of the charge holder	State Bank of Travancore Commercial Branch Jeevan Anadn, No.556, Mount Road, Tenyampet, Chennai-600018, Tamilnadu
Amount Secure by the charge	Rs.230.000 millions
Brief of the principal terms and conditions and extent and operation of the charge	Cash Credit – interest 1% below SBTPLR minimum 10% with monthly rests. Margin 25% on inventory and receivables. All other terms and conditions as per sanction lette4r of documents executed.
Description of the property charge whether it is a charge on	Immovable properties Plant and machinery Furniture and fixtures Stock in trade Book debs Vehicles Fixed deposits
Modification charge Charge identification number of the charge to be modified	90288870
Date of instrument modifying the charge	14.08.2006
Particulars of the Property charged	Primary hypothecation of stocks of raw materials, stock in process, finished goods, goods in transit, consumable stores and spares and other current assets including book debts on pari passu basis with SBI. Collateral pari passu charge on the entire fixed assets of the company with SBI. Extension of equitable mortgage of property at Pukkathurai village for the revised credit limits of Rs.230.000 millions sanctioned by SBT commercial branch.
Brief description of the instrument modifyng the charge	C and I-12, b, C and I-9 and memorandum of extension of equitable mortgage by constructive delivery on 14.08.2006
Particulars of present modification	Limits revised to Rs.260.000 millions out of which term loan Rs.36.000 millions since closed waiver of corp Gtee of Fomas, Italy and cending of pari passu charge on fixed assets fav SBI for TL Rs.120 millions new.

Company’s fixed assets include Freehold Land, Building, Plant and Machinery, Tools and dies, Furniture and fittings, office equipments, Computers and Vehicles.

Background :

Subject was incorporated as Fomas India Limited in 1990. the company is a subsidiary of Fomas SPA, Italy, and is engaged in the business of manufacturing of forgings and rings.

Manufacturing arrangements with a customer

Pursuant to an arrangement with i\one of the customers, the company purchases in its own name certain pore approved raw materials for which funding is done by the customer. The materials are held in trust for the customer and can be used only for the manufactured products supplied to the customer, purchases and sales in the profit and loss account include Rs.61.600 millions (Previous year Rs.38.900 millions) and Rs.88.100 millions (Previous period – Rs.14.700 millions) respectively in respect of such materials/products. Year end inventories include playable to the customer towards funding the raw materials, net of adjustments for material cost of products sold to the customer, aggregating Rs.84.100 millions (Previous period – Rs.59.100 millions).

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.41.07
UK Pound	1	Rs.81.69
Euro	1	Rs.55.84

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--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	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

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	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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