MIRA INFORM REPORT

Report Date :

19.12.2007

IDENTIFICATION DETAILS

Name :	PHEONIX LAMPS INDIA LIMITED
Formerly Known As:	PHOENIX LAMPS LIMITED
Registered Office :	59-A, Noida Special Economic Zone, Noida Phase – II, District Gautam Budh Nagar - 201305, Uttar Pradesh
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	26.03.1991
Com. Reg. No.:	20-12944
CIN No.: [Company Identification No.]	L31500UP1991PLC012944
TAN No.: [Tax Deduction & Collection Account No.]	MRTP00549D
Legal Form :	It is a public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	The company is engaged in manufacturing and exporting of halogen automotive lamps and compact fluorescent lamps. It is also engaged in private labeling for several world renowned lighting companies.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 5220000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject has improved its performance in 2004 – 05. Directors are reported as experienced, respectable and resourceful industrialists. Their trade relations are fair. Financial position is satisfactory. 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/Factory :	59-A, Noida Special Economic Zone, Noida Phase – II, District Gautam Budh Nagar - 201305, Uttar Pradesh, India
Tel. No.:	91-120-2562952-57/4012222
Fax No.:	91-120-2562943/26843949
E-Mail :	info@phoenixlamps.com halonix@vsnl.com
Website :	http://www.phoenixlamps.com
Factory :	A – 1, Noida Phase – II, District Gautam Budh Nagar – 201305, Uttar Pradesh, India C – 8 Selaqui Industrial Area, District Dehradun, Uttaranchal 59 – D, Noida Special Economic Zone, Noida Phase – II, District Gautam Budh Nagar – 201305, Uttar Pradesh Plot No. 5, Sector 12, Integrated Industrial Area, Ranipur, Haridwar, Uttaranchal

DIRECTORS

Name :	Mr. B.K. Gupta
Designation :	Chairman
Age:	71 Years
Qualification:	Graduate
Experience:	45 Years
Date of Appointment :	30.04.2005
Last Employment:	Industrialist
Name :	Mr. H.R. Gupta
Designation :	Ex-Managing Director
Age :	47 Years
Qualification :	B.B.A. Canada
Experience :	23 Years
Date of Appointment :	22.09.1992
Last Employment:	Industrialist
Name :	Mr. Sudesh Yadav
Designation :	IDBI Nominee Director
Name :	Mr. K. Mohan Ram Pai
Designation :	Director
Name :	Mr. Anil Sharma
Designation :	Director
Name :	Mr. A. K. Agarwal
Designation :	Whole Time Director
Age :	56 Years
Qualification :	C.A.
Experience :	36 Years
Date of Appointment :	01.01.1991
Last Employment:	Halonix Electric Private Limited
Name :	Mr. G S Vohra
Designation :	Executive Director
Age:	57 Years
Qualification :	C.A.
Experience :	33 Years
Date of Appointment :	14.09.1992
Last Employment:	Delhi Botling Company Limited
Name:	Mr. P. C. Chaturvedi
Designation:	Director
Name:	Mr. C. D. Ghosh
Designation:	Director
Name:	Mr. C. A. Venkateshwaran
Designation:	Director
Name:	Mr. Raj Krishan Sahgal
Designation:	Chairman
Name:	Mr. Rajiv Prasad
Designation:	Managing Director
Name:	Mr. Donald Machines Peck
Designation:	Director
Name:	Mr. Steven Mark Enderby
Designation:	Director
Name:	Mr. Jayant Davar
Designation:	Director
Name:	Mr. Gurdeep Singh
Designation:	Director
Name :	Mr. Sanjeev Sharma
Designation :	Chairman
Age:	47 Years
Qualification:	MBA in Marketing Engineering from IIT
Experience:	22 Years
Date of Appointment :	01.01.2007
Last Employment:	Nokia

KEY EXECUTIVES

Name :	Mr. A. K. Mittal
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Shares
Bodies Corporate	18509587	66.06
Mutual Funds/ UTI	570011	2.03
Financial Institutions/ Banks	700	0.00
Foreign Institutional Investors	537431	1.92
Non Institutions	0	0
Bodies Corporate	2845063	10.15
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	4564006	16.29
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	619953	2.21
Trust	15400	0.05
NRI	357149	1.29
Total	28019300	100.00

BUSINESS DETAILS

Line of Business :

The company is engaged in manufacturing and exporting of halogen automotive lamps and compact fluorescent lamps. It is also engaged in private labeling for several world renowned lighting companies.

Products :

Item Code No. (ITC Code)	853921
Product Description	Electric Lamps

Brand Names :

"HALONIX"

Exports :

Countries :

Ø European Countries

Ø Japan

Ø South Korea

Ø Brazil

Ø Australia

Ø South Africa

Ø Middle East

Ø South East Asia

Ø North and South American Countries

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Electric Lamps	Pcs.	N.A.	89436	6688

GENERAL INFORMATION

No. of Employees :

1791

Bankers :

Ø Corporation Bank, M 41, Connaught Circus, Delhi - 110 001

Ø Canara Bank, Industrial Finance Branch, 11^th Floor, World Trade Tower, Delhi - 110 001

Ø Indian Bank, South Extension I, Delhi - 110 048

Facilities :

	As on 31.03.2007 [Rs. in Millions]
SECURED LOANS :
Term Loan :
From Banks	56.737
Foreign Currency Term Loan From Banks	55.316
Working Capital Loan from Banks :
Cash Credit Facilities	331.289
Bill Discounting	66.401

Ø Term Loans are secured by way of first pari passu charges on all the movable and immovable properties, both present & future & subject to charges created/ to be created in favour of the company's bankers by way of security against borrowing for working capital requirements in the ordinary course of business. Term Loan from Bharat Overseas Bank Ltd. is further secured by way of personal guarantee of Mr. A. K. Agarwal, Whole Time Director of the Company.

Ø Working Capital loans from Scheduled Bank is secured by hypothecation of stocks of Raw Material, Work in Progress, Finished Goods, Stores & Spares, consumables and book debts of the Company both present and future and further secured by way of second charge on the fixed assets.

Banking Relations :	Satisfactory
Auditors :	Arun K. Gupta & Associates Chartered Accountants
Address:	D-58, East to Kailash, New Delhi – 110 065, India
Internal Auditors:	Ernst And Young Chartered Accountants
Address:	B-26, Qutab Institutional Area, New Delhi 110016
Subsidiaries :	Phoenix Tri-Continental Hotels Limited
Common Control :	Argon South Asia Limited
Holding Company :	Argon India Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
41000000	Equity Shares	Rs. 10/- each	Rs. 410.000 Millions
2900000	Redeemable Preference Shares	Rs. 100/- each	Rs. 290.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
28019300	Equity Shares	Rs. 10/- each	Rs. 280.193 Millions
1316000	Redeemable Preference Shares	Rs. 100/- each	Rs. 131.600 Millions
	TOTAL		Rs. 411.793 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		411.793	467.543	478.793
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		893.637	315.845	136.701
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1305.430	783.388	615.494
LOAN FUNDS
1] Secured Loans		509.744	557.837	626.152
2] Unsecured Loans		0.000	250.000	58.881
TOTAL BORROWING		509.744	807.837	685.033
DEFERRED TAX LIABILITIES		54.733	85.202	112.591
TOTAL		1869.907	1676.427	1413.118
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		760.032	859.630	881.713
Capital work-in-progress		192.312	0.000	0.000
INVESTMENT		0.020	0.520	0.020
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	464.152	422.750	388.729
	Sundry Debtors	588.751	431.005	318.612
	Cash & Bank Balances	26.799	130.391	12.649
	Other Current Assets	8.259	6.464	4.129
	Loans & Advances	76.396	26.713	35.714
Total Current Assets		1164.357	1017.323	759.833
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	138.187	201.046	228.448
	Provisions	108.627	0.000	0.000
Total Current Liabilities		246.814	201.046	228.448
Net Current Assets		917.543	816.277	531.385
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1869.907	1676.427	1413.118

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Sales Turnover	2778.346	2327.208	1982.409
Other Income	27.771	33.512
Total Income	2806.117	2360.72	1982.409
Profit/(Loss) Before Tax	302.016	238.517	170.273
Provision for Taxation	[12.726]	[0.364]	47.000
Profit/(Loss) After Tax	314.742	238.881	123.273
Export Value	950.824	873.753	1008.236
Import Value			893.724
Expenditure:
Materials	1709.719	1421.176
Operating Expenses	132.298	126.843
Administrative and Selling Expenses	228.411	182.007
Payment to Employees	247.991	213.583
Financial Charges	72.259	68.790
Depreciation	107.533	142.995
Increased/Decreased in stock	5.890	[33.190]
Total Expenditure	2504.101	2122.204	1812.135

QUARTERLY RESULTS

PARTICULARS	30.06.2007	30.09.2007
Type	1^st Quarter	2^nd Quarter
Sales Turnover	707.200	913.100
Other Income	10.000	05.800
Total Income	717.200	918.900
Total Expenditure	601.600	749.500
Operating Profit	115.600	169.400
Interest	14.600	15.900
Gross Profit	101.000	153.500
Depreciation	28..500	27.600
Tax	5.400	11.100
Reported PAT	75.500	114.400

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	0.63	1.07	1.08
Long Term Debt-Equity Ratio	0.19	0.50	0.81
Current Ratio	1.43	1.23	1.28
Fixed Assets	1.43	1.25	1.11
Inventory	6.55	6.05	6.22
Debtors	5.70	6.55	7.27
Interest Cover Ratio	5.02	4.61	3.24
Operating Profit Margin(%)	16.19	18.77	19.33
Profit Before Interest And Tax Margin(%)	12.49	12.94	12.01
Cash Profit Margin(%)	14.54	15.57	13.40
Adjusted Net Profit Margin(%)	10.84	9.74	6.08
Return On Capital Employed(%)	21.30	21.95	20.23
Return On Net Worth(%)	35.22	49.83	34.54

LOCAL AGENCY FURTHER INFORMATION

FIXED ASSETS

The company’s fixed assets of important value include land, building, plant and machinery, laboratory equipment, gas cylinder, furniture & fixture, office equipment, computer, vehicle and fire fighting equipment.

Products:

Ø Halogen Auto Lamps

Ø General Lighting

Ø Electric Lamps

CHANGE IN MANAGEMENT OF THE COMPANY: 

During May 2006, the Company identified potential foreign investors namely Argon India Limited and Argon South Asia Limited (Acquirers) to invest into its expansion project by way of Convertible Share Warrants. During the process of obtaining statutory approvals for the same, the Acquirers had also expressed desire to purchase 87,35,727 equity shares held by the Gupta Family (the main promoters of Phoenix Lamps) thereby acquiring controlling stake into the Company. Accordingly, a warrant subscription and share purchase agreement was entered on 3rd July, 2006 which was subsequently amended on 28th December, 2006, wherein Gupta family agreed to sell their shares at Rs.190/- per share. 

As per the requirements of SEBI Takeover Regulations, the acquirers made an open offer to acquire 56,03, 860 equity shares from public at Rs. 190/- per share. Having complied with the SEBI Takeover Regulations, Acquirers have acquired the control of management of the Company and inducted their representatives as well as independent directors on the Board. The Company has also redeemed the entire preference share capital of IDBI Ltd. The new Board of Directors has thorough knowledge, expertise in every field and is confident of further strengthening the Company and improve wealth of investors in the years to come. 

As Argon India Limited is holding more than 51% nominal value of equity shares of the Company, the Company is a subsidiary of Argon India Limited. 

FINANCIAL AND OPERATIONAL PERFORMANCE: 

On Operational front Gross Sales grew by 18% from Rs. 2486.80 Million in 2005-06 to Rs.2932.11 Million in 2006-07. Profit before tax (PBT) at Rs.302.02 Million has shown an increase of over 26% against previous year's Rs. 238.52 Million. Net Profit witnessed an increase of 32% at Rs.314.74 Million from Rs.238.88 Million last year. The improvement in performance of the Company could mainly be attributed to better capacity utilization, ongoing emphasis on productivity and efficiency, improvement in all areas of operations. Cost control measures and actions for sustainable growth will further enable the Company to improve its financial position in near future. 

STATUS OF IMPLEMENTATION OF NEW UNIT AT HARIDWAR:

The company is in advance stage of implementation of its new CFL manufacturing unit at Haridwar. This facility is being set up with a capacity to manufacture 43 Million CFL lamps per annum. So far, the Company has incurred Rs.175.600 Millions on this project. Commercial production from this unit is likely to commence shortly. This unit would enjoy 100% excise exemption for 10 years and 100% income tax exemption for 5 years followed by 30% income tax exemption for next 5 years. Setting up of this unit will give a competitive edge to the Company over its rivals. 

MANAGEMENT DISCUSSION & ANALYSIS REPORT 

a) Industry Structure and Development: 

The Company enjoys the status of Market Leader in automotive Halogen Lamp segment in India with supplies to all Major OEMs. Continued growth in automotive segment with increasing demand from replacement market, resulted in 12% growth in automotive lamps segment. 

The Company is also leading player in Compact Fluorescent Lamps and other General Lighting Halogen Lamps. In case of General Lighting Lamps a rapid shift is taking place from Ordinary incandescent lamps to energy efficient Compact Fluorescent Lamps (CFLs). The Company recorded a growth of over 27% in this segment. CFLs will be the main growth driver of the Company in next couple of years. 

b) Opportunities and Threats: 

Opportunities: 

Energy shortage throughout the world is leading to substantial increase in demand for Compact Fluorescent Lamps, opening growth opportunities for the Company. 

Setting up of a new Unit at Haridwar will result in further tax saving for the Company. 

Expanding export of automotive lamps to new markets like U.S.A.

Stringent focus on cost management to remain competitive and enhance operating margins. All employees are involved in various cost re-engineering projects.

Introduction of new generation lamps like LED, HID etc.

Threats: 

Strengthening of Rupee may impact export margins. However, the same will be partly compensated due to import of raw material and other items. 

The industry has to be on guard against the menace of counterfeits which has increased over the last few years, inspite of serious efforts to check it.

Expansion of CFL capacity by competition. However, with setting up of Haridwar unit, they shall maintain their lead in this segment.

c) Outlook:

Indian economy is likely to grow by over 8% supported by smart growth in manufacturing and service sector. Overall, the demand outlook is quite positive. Compact Fluorescent Lamp shall witness exponential growth in the current fiscal. 

d) Risks and Concern:

The operating margins are under pressure due to increase in raw material prices and other input costs. It may not be possible for the Company to recover the increase in material cost entirely from customers.

e) Financial Performance vis-a-vis Operational Performance: 

Gross turnover at Rs. 2932.11 million recorded a growth of 18%. Profit before tax at Rs. 302.02 million registered a growth of 26%. Net Profit at Rs.314.74 million recorded an impressive growth of 32%. In view of improving financial results and positive outlook for the near future, the Company has declared Equity Dividend of 30% for the financial year 2006-07. 

f) Segmentwise or Productwise Performance:

As per the relative reporting requirements, the Company operates into single segment i.e., Electrical Lamps. For the year under review 67% of sales was generated from domestic market while remaining 33% cane from export market. Automotive Lamps constituted 55% of total sales and balance 45% sales carne from General Lighting Lamps.

AS PER WEBSITE DETAILS :

Subject an Indo Japanese Joint Venture, promoted in 1991 in Noida, about 45 minutes away from the International airport of New Delhi.

The Company has set-up fully automatic state-of-the-art manufacturing facilities for Automobiles Halogen lamps, Halogen lamps for General Lighting and Compact Fluorescent Lamps.

With a total Investment for over US$30 million and having ISO 9001, QS 9000 and TS 16949 certificate under its belt, its units have a massive productions infrastructure, setup over three different locations, which can annually deliver over 80 millions lamps benchmarked to international regulations for Quality, Performance and Safety.

Offering an extensive range of over 500 different types of products to suit varied customers needs and applications. The current customers base ranges from aftermarket buyers to OE manufactures and also includes reputed international brands.

The company believes in long-term business relationship with its customers by ensuring the best services, competitively priced international -quality products, prompt delivery and personalized services.

Phoenix Lamps Limited Net Profit up by 39%

New Delhi, 26th October 2007. Phoenix Lamps Limited, India's No. 1 manufacturer of Automotive Lamps and Compact Fluorescent Lamps, has announced its quarterly results for quarter ending September 2007. In its board meeting, the company reported the net sales during the quarter at Rs. 913.100 Millions from Rs. 727 Millions in corresponding quarter previous year showing an increase of 26%. The Company recorded rise in its Profit Before Tax (PBT) at Rs. 126.300 Millions from Rs. 85.800 Millions showing an increase of approx. 47%. Profit After Tax (PAT) for the quarter is at Rs. 114.400 Millions from Rs. 82.200 Millions showing an increase of approx. 39%.

Phoenix Lamps Ltd. net sales have gone up at Rs. 1620.200 Millions compared to Rs. 1344.200 Millions in the last half year ending 30th September 2006. The Company recorded Profit Before Tax of Rs. 199.200 Millions against Rs. 150.500 Millions (up by 32%). Profit After Tax for half year period is Rs. 190 Millions as against Rs. 137.300 Millions ( up by 38%). The Earning per share (EPS) of the company as on 30th September 2007 is Rs 6.78 per share as against Rs. 4.76 per share on 30th September 2006.

Company is riding high on the increased production with the start of the Haridwar facility since July 2007. Buoyed by the overwhelming response from the export market, Phoenix Lamps Ltd has also entered new strategic markets for auto exports and plans to increase market penetration in the coming years.

Declaring the results of the company Mr. Rajeev Prasad, Managing Director, PHOENIX LAMPS LTD. "The growth in Profit is mainly because of better planning, forward and backward integration of units, better realization of value addition products, and working capital management .The management expects the current fiscal to be robust on account of capacity enhancement with the commissioning of Haridwar plant. They are confident of achieving significantly higher margins in the current year. In addition the company has started looking at acquiring synergistic businesses in India and Abroad.

About PHOENIX

Phoenix Lamps Limited is India's 'No 1' manufacturer of lighting sources for automotive and general lighting applications incl. Automotive Halogen Lamps and Compact Fluorescent Lamps (CFLs). It manufactures lamps at 5 'state of the art' facilities. Phoenix sells its lighting products under its own 'Halonix' brand, and also does white label manufacturing for other leading brands in India. A pioneer in lighting products in India, Phoenix Lamps is recognized and trusted for its high quality, technologically advanced and innovative products.

Phoenix Lamps Limited (Phoenix), drives efficiency, innovation, growth through SAP ERP

05.11.2007 Phoenix Lamps limited, has successfully implemented SAP ERP. Phoenix is the number one manufacturer of Compact Fluorescent Lamps and Automotive Lamps in the Country. Phoenix aims to consolidate its operations across multiple locations spread across India, with all units going live simultaneously.

Phoenix selected SAP Business Suite to bring a more integrated and seamless approach to internal processes. The family of business applications will provide better insight into enterprise-wide analysis based on real time data and key performance indicators, improved quality and on-time delivery, reduction in inventory cost and enhanced customer service.

"They were looking for partners who could provide a technology and process platform to support their organization level demand with robust growth. SAP was a natural choice and with its deep domain expertise. Siemens Information Systems Ltd (SISL), as an implementation partner, was an ideal complement," said Mr. Rajiv Prasad, Managing Director of the Company.

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 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. 39.57
UK Pound	1	Rs. 79.91
Euro	1	Rs. 56.99

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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	YES
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

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.	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

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