MIRA INFORM REPORT

Report Date :

03.02.2007

IDENTIFICATION DETAILS

Name :	STERLING BIOTECH LIMITED
Registered Office :	43 Atlanta Building, Nariman Point, Mumbai - 400021, Maharashtra, India
Country :	India
Financials (as on) :	31.12.2005
Date of Incorporation :	23.03.1985
Com. Reg. No.:	11-35738
CIN No.: [Company Identification No.]	L51900MH1985PLC035738
TAN No.: [Tax Deduction & Collection Account No.]	MUMS16116C
PAN No.: [Permanent Account No.]	AABCS1946H
Legal Form :	Public Limited Liability Company. Company’s shares are listed on the Stock Exchanges.
Line of Business :	Subject is engaged in the business as Manufacturers and Dealers of Gelatine.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 35000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company. Available information indicates high financial responsibility of the company. Directors are reported as experienced, respectable and resourceful businessmen. Their 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 :	43 Atlanta Bldg, Nariman Point, Mumbai - 400021, Maharashtra, India
Tel. No.:	91-22-56306732/56306733
Fax No :	91-22-22041954
Administrative Office :	Sandesara Estate, Kamdhenu Park, Altadra, Padra Road, Vadodara-390012, Gujarat, India
Tel. No.:	91-261-2321720/2321730
Fax No.:	91-261-2335257
Factory :	ECP Road, Village Karakhadi, Taluka Padra, Karakhadi-391450, Gujarat, India

DIRECTORS

Name :	Mr. Nitin J. Sandesara
Designation :	Chairman and Managing Director
Name :	Mr. C. J. Sandesara
Designation :	Director
Address :	43, Atlanta, Nariman Point, Mumbai – 400021, Maharashtra, India
Name :	Mr. Vilas D. Joshi
Designation :	Director
Name :	Mr. P. B. Mehta
Designation :	Director
Name :	Mr. N. B. Patel
Designation :	Director
Name :	Mr. R. B. Dixit
Designation :	Director

KEY EXECUTIVES

Name :	Mr Kirtidev J Khatri
Designation :	Company Secretary

BUSINESS DETAILS

Line of Business :	Subject is engaged in the business as Manufacturers and Dealers of Gelatine.
Products :	Gelitna
Imports from :	Subject imports raw materials from Europe and USA.
Terms :
Purchasing :	L/C.

GENERAL INFORMATION

No. of Employees :	250
Bankers :	State Bank of India, Atul, Gujarat Standard Chartered Bank, Mumbai ICICI Bank, Valsad, Gujarat

Banking Relations :	Satisfactory
Auditors :	H. S. Hathi & Company Chartered Accountants
Associates/Subsidiaries :	Sandesara Group

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
50,00,00,000	Equity Share	Rs 1/ each	Rs 500.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
22,12,00,000	Equity Shares	Rs 1/- each	Rs 221.200 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.12.2005	31.12.2004	31.12.2003
SHAREHOLDERS FUNDS
1] Share Capital	221.200	171.300	171.300
2] Share Application Money	0.000	0.000	0.000
3] Reserves & Surplus	8612.300	3785.300	3051.700
4] (Accumulated Losses)	0.000	0.000	0.000
NETWORTH	8833.500	3956.600	3223.000
LOAN FUNDS
1] Secured Loans	8992.000	4006.600	3786.900
2] Unsecured Loans	8221.400	3132.300	0.000
TOTAL BORROWING	17213.400	7138.900	3786.900
DEFERRED TAX LIABILITIES	0.000	0.000	0.000
TOTAL	26046.900	11095.500	7009.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	7459.000	4867.300	3701.800
Capital work-in-progress	5739.800	1710.600	750.300
INVESTMENT	124.000	0.000	0.000
DEFERREX TAX ASSETS	0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
Inventories	2458.200	2162.100	1899.800
Sundry Debtors	1296.300	1128.600	890.800
Cash & Bank Balances	10207.800	2393.500	730.800
Other Current Assets	0.000	0.000	0.000
Loans & Advances	303.100	189.700	143.500
Total Current Assets	14265.400	5873.900	3664.900
Less : CURRENT LIABILITIES & PROVISIONS
Current Liabilities	1576.800	1331.100	1023.600
Provisions	242.800	143.100	96.800
Total Current Liabilities	1819.600	1474.200	1120.400
Net Current Assets	12445.800	4399.700	2544.500
MISCELLANEOUS EXPENSES	278.300	117.900	13.300
TOTAL	26046.900	11095.500	7009.900

PROFIT & LOSS ACCOUNT

PARTICULARS	31.12.2005	31.12.2004	31.12.2003
Sales Turnover [including other income]	5041.000	4165.700	2943.100
Profit/(Loss) Before Tax	1456.500	1138.000	652.000
Provision for Taxation	335.700	355.000	194.500
Profit/(Loss) After Tax	1120.800	783.000	457.500

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	31.03.2006 1^st Qtr	30.06.2006 2^nd Qtr	30.09.2006 3^RD Qtr
Sales Turnover	1338.800	1427.100	1609.700
Other Income	8.200	9.500	11.100
Total Income	1347.000	1436.600	1620.800
Total Expenditure	734.000	763.200	845.300
Operating Profit	613.000	673.400	775.500
Interest	102.800	103.100	103.000
Gross Profit	510.200	570.300	672.500
Depreciation	123.400	142.300	176.700
Tax	32.900	55.900	48.900
Reported PAT	302.400	306.100	364.400

200603 Quarter 1 --------------- Notes Expenditure Includes (Increase)/Decrease in Stocks Rs (23.104) million Consumption of Raw Material Rs 460.322 million Staff Cost Rs 36.931 million Other expenditure Rs 243.715 million Tax Includes Provision for Current Tax Rs 32.000 million Deferred Tax Rs 51.500 million Fringe Benefit Tax Rs 0.889 million Extraordinary Items Indicates Extraordinary expenditure (Non recurring) EPS is Basic Status of Investor Complaints for the quarter ended March 31, 2006. Complaints Pending at the beginning of the quarter 05 Complaints Received during the quarter 102 Complaints disposed off during the quarter 102 Complaints unresolved at the end of the quarter 05 1. The Company's operations fall under single segment hence segment reporting as defined in Accounting Standard 17 is not applicable. 2. The above financial results were reviewed by the audit Committee and taken on record by the Board of Directors in its meeting held on April 28, 2006. 3. The Statutory Auditors have carried out a limited review of the financial results for the quarter ended March 31, 2006. 4. Extra Ordinary Expenditure represent FCCB issue expenses to be written off over a period of 5 years. 5. During the quarter, the company had purchased the manufacturing facilities of Torrent Gujarat Biotech Ltd at Masar, Dist. Baroda, Gujarat at an asset sale for a consideration of Rs 550 million in an all cash deal.

200606 Quarter 2 --------------- Notes Expenditure Includes (Increase)/Decrease in Stocks Rs (23.941) million Consumption of Raw Material Rs 485.324 million Staff Cost Rs 38.070 million Other expenditure Rs 247.728 million Tax Includes Provision for Current Tax Rs 55.000 million Deferred Tax Rs 66.000 million Fringe Benefit Tax Rs 0.854 million Extraordinary Items Indicates Extraordinary expenditure (Non recurring) EPS is Basic Status of Investor Complaints for the quarter ended June 30, 2006. Complaints Pending at the beginning of the quarter 05 Complaints Received during the quarter 38 Complaints disposed off during the quarter 40 Complaints unresolved at the end of the quarter 03 1. The Company's operations fall under single segment hence segment reporting as defined in Accounting Standard 17 is not applicable. 2. The above financial results were reviewed by the audit Committee and taken on record by the Board of Directors in its meeting held on July 31, 2006. 3. The Statutory Auditors have carried out a Limited Review of the Financial Results for the quarter ended 30.06.2006. 4. Extra Ordinary Expenditure represent FCCB issue expenses to be written off over a period of 5 Years.

200609 Quarter 3 --------------- Notes Expenditure Includes (Increase)/Decrease in Stocks Rs (37.467) million Consumption of Raw Material Rs 571.494 million Staff Cost Rs 43.607 million Other expenditure Rs 251.666 million Tax Includes Provision for Current Tax Rs 48.000 million Deferred Tax Rs 82.500 million Fringe Benefit Tax Rs 0.863 million EPS is Basic Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter 03 Complaints Received during the quarter 40 Complaints disposed off during the quarter 35 Complaints unresolved at the end of the quarter 08 1. The Company's operations fall under single segment hence segment reporting as defined in Accounting Standard 17 is not applicable. 2. The above financial results were reviewed by the audit Committee and taken on record by the Board of Directors in its meeting held on October 31, 2006. 3. The Statutory Auditors have carried out a limited review of the financial results for the quarter ended September 30, 2006. 4. 3600 tons capacity was fully operationalised during the current quarter. 5. As amounted earlier, the Company will acquire, in an all cash deal, gelatin manufacturing facility in China subject to necessary approvals/consents.

KEY RATIOS

PARTICULARS	31.12.2005	31.12.2004	31.12.2003
Debt-Equity Ratio	1.90	1.52	1.33
Long Term Debt-Equity Ratio	1.54	1.02	0.74
Current Ratio	2.54	1.54	1.20
TURNOVER RATIOS
Fixed Assets	0.64	0.75	0.66
Inventory	2.09	1.92	1.55
Debtors	3.97	3.86	3.95
Interest Cover Ratio	5.00	3.59	2.32
Operating Profit Margin(%)	46.46	49.01	48.47
Profit Before Interest And Tax Margin(%)	37.78	40.47	39.66
Cash Profit Margin(%)	31.94	28.62	24.62
Adjusted Net Profit Margin(%)	23.26	20.08	15.81
Return On Capital Employed(%)	9.91	17.56	18.48
Return On Net Worth(%)	17.53	21.81	17.13

STOCK PRICES

Face Value	Rs. 1/- each
High	Rs. 190.90
Low	Rs. 189.90

LOCAL AGENCY FURTHER INFORMATION

Sterling Biotech Ltd., formerly known as Sterling Tea & Industries (STIL) is in the business of tea processing and trading. The company was incorporated in the year 1985. The company has chalked out a plan to expand its tea producing facilities. The company diversified into the manufacture of gelatine, a product which is in short supply worldwide. This will enable the company to further strengthen its base and carve a niche in the bio-engineering field. Sterling got into business with Technology from Croda Colloids UK,a Gelatin Major in the Global Market. Gelatin is a pure protein obtained from Animal bone or hide. Today the company has established itself as a major producer of pharmaceutical grade gelatine world over. 

 During 1995-96, the company has commenced a new Tea Plant with a installed capacity of 3000 TPA. In 2001-02 the second pharma grade gelatin manufacturing facility was commissioned,doubling the capacity at Vadodara and the Vadodara facility is an Ultra modern world class gelatin manufacturing facility. 

The company has completed its acquistion of the Gelatine Division of Rallis India Ltd, a TATA Enterprise, at Udhagmandalam in all cash deal for Rs.47 Crore and this had a capacity of 2200 MTPA with effect from 1st April 2004. As a result of, this acquisition the total installed capacity of Gelatine has increased to 10400 TPA.  

 During March 2005, the company has sub-divided its equity share face value from Rs.2/- per share to Re.1/- per share.

OPERATIONS: 

 During the year under review, sales were at Rs.4818.30 Millions as against Rs.3899.10 Millions during the previous year, an increase by 23.6%. Total Income reached Rs.5041.10 Millions as against Rs.4165.80 Millions, a growth of 21%. Gross profit (i.e. EBIDTAI increased to Rs.2273.70 Millions as compared to Rs.1923.10 Millions in the previous year, an increase of 18.23%. Net profit during the year under review increased to Rs. 1120.80 Millions as compared to Rs.783.00 Millions in the previous year, an increase of 43.14%. The growth in sales and profitability for the year was attributable to factors such as higher realizations, optimum utilization of capacities and resources, economies of scale, strengthening position in market etc. 

 Your company continues to be a significant player in the international gelatin market through successive expansion of capacities and acquisition resulting in year on year growth in capacities, turnover and profitability. Sterling is regarded as supplier of world class quality gelatin producer in the global market. 

 ACQUISITION:  

 Sterling has entered into a Memorandum, of Understanding, (MOU) with Torrent Gujarat Biotech Limited to purchase their manufacturing facility at Masar, Dist. Baroda, Gujarat, as an asset purchase, for a consideration of Rs.550 Millions, in an all cash deal. This facility will be used by Sterling to produce range of products including CoQ10, a health supplement product aimed at the US market. The integration of this facility with Sterling would be completed during 2006. 

 ACCOLADES: 

  Your Company is One Star Export House. Your Company has an ultra modern world class gelatin manufacturing facility at Vadodara and one at Ooty recently acquired. Sterling's gelatin is at par with that produced in the USA, Europe and Japan The gelatin produced by Sterling is used for capsules, tablets, vitamins, blood plasma expander, surgical aids and for treatment of arthritis, bleeding disorders and cartilage related diseases. 

 The very high standards of quality maintained by Sterling has earned it major quality certification like the Hazardous Analysis and Critical Control Point Certification (HACCP), ISO 9001, ISO 14001 and European Directorate For Quality of Medicine Certification (EDQM). 

 SUCCESSFUL COMPLETION OF CONVERTS (FCCB): 

  Sterling has completed an issue of 0.50% Convertible Bonds 2010 ('0.50% FCCB 2010') aggregating to US$ 175 million with a conversion price of Rs.184.8694 per equity share representing about 24% premium to the closing price on pricing date. The Issue was Lead Managed by Barclays Capital, Sole Book-runner and underwriter and the same was listed on Singapore Exchange Limited with underlying GDR's to be listed on the Luxembourg Stock Exchange and the underlying shares to be listed on NSE and BSE. The Bonds are convertible into either the ordinary shares of the company or global depository shares (GDS), at the option of the Bondholders

 Proposed utilization of the proceeds of the FCCB issue being further expanding the capacities and company's foray into CoQ10. 

INDUSTRY COMPANY OPERATES IN GELATIN INDUSTRY: 

 Gelatin is a niche product derived from the protein, collagen. Sterling uses water buffalo bones for extraction of collagen from bones. 

 In 2004, global gelatin market was 291,000 tons (Source: The Gelatin Manufacturers' Association of Europe ('GME')), representing growth of 4.56% on a year on year basis, as against GME estimate of 2-3% p.a. Gelatin Industry is sitting on an explosive growth due to global factors such as ageing population of developed countries, better standard of living in developing countries leading to higher consumption of nutraceuticals and pharmaceuticals and realization in the developed nations about the need to provide medicines to third world countries at a cheaper cost to ward of problems such as terrorism. 

 Global gelatin industry is dominated by 3 global players who control about 60% of the market and the rest by about 25 players. More than 80% of gelatin production is undertaken in high cost continents arid countries leach as North America, Europe and Japan. 

 The principal end-user industry for Sterling's product is pharmaceutical and nutraceuticals. As gelatin is a very versatile product it has other applications in wide range of industries such as food, photographic industries, and technical applications etc. Though Sterling's product can be utilized in any of these industries, currently due to capacity constraints we restrict ourselves to pharmaceutical and nutraceuticals industries. 

 The nutraceuticals market (grouped as food in developed nations) stands at around 105,000 tons, while the pharmaceuticals markets stands at about 70,000 tons. Thus Sterling's total addressable market is estimated at around 175,000 tons, which is growing at higher than 2-3% as estimated by GME. 

 Globally North America, Europe and Japan constitute about 800,6 of the world market and also have 80% production facilities located in these countries/continents providing very high cushion for lowest cost producers like Sterling for superior competitive edge. 

 COQ10 MARKET: 

 Sterling in its endeavor to spot early opportunities has decided to enter manufacture and marketing of CoQ10, an enzyme required by body to convert food into energy. This enzyme is present in every animal and human being. CoQ10 is manufactured by the human body till the age of 30 years when the production completely stops or levels get depleted to a level which requires supplementation. Therefore, we find that people are affected by heart related diseases like heart attack, diabetes, blood pressure surfacing post 30 years. 

 This product is controlled by a few Japanese players with one dominating more than 80% market share. Sterling has decided to get into this area and has therefore acquired a facility to implement this project 

PRODUCTION FACILITIES: 

 Sterling has a world class production facility located near Vadodara in Gujarat and in 2004 had acquired a facility at Ooty in South India. During the first quarter of 2005, Sterling completed the first phase of its ongoing expansion plan. 

  Gelatin manufacturing process is energy intensive and requires uninterrupted power supply. Therefore, Sterling has its own captive power plant of 8 MW operating on HFO at Vadodara plant, in addition to power supply from Gujarat Electricity Board. For Ooty the Tamil Nadu Electricity Board has provided power supply which is sufficient and the facility has also successfully tested alternate power sources at cheaper cost which going forward will be of immense help. These captive facilities helped Sterling generate uninterrupted power and a reasonable saving. Besides, utilities like water and steam continue to be abundantly available at both the plants. 

MACRO ECONOMIC SCENARIO: 

 Indian economy has been pacing ahead at more than 8% growth in past 2 years and the Prime Minister and the Finance Minister have indicated that India has potential to grow at more than 10% in years ahead. To achieve such a growth rate Government of India has taken several bold initiatives and invited participation from foreigners in large number of industries. India is sitting on all time high forex reserves, and has broken out of the historical growth rate of 4-5%. 

 The high growth rate will require tremendous investment in infrastructure, power, road, ports etc. The next few years will see explosion in the capex cycle and the economy will have a robust growth. However, this might lead to shortage of skills requiring upgradation of educational facilities and also better standard of living. As per certain reports, India will become the 3rd largest global economy in next 25 years, next only to USA and China, surpassing, Japan, UK, Germany, France etc. 

 Sterling is all set to capture this explosive growth in the economy creating wealth for its stakeholders in the process. 

 Sterling is a globally focused significant gelatin player with good manufacturing practices, marketing and excellent process and product research capabilities. Gelatin manufactured by Sterling is used for capsule manufacturing, blood plasma expander, tablet binding substance, medicine for arthritis etc. Sterling also produces Di-calcium Phosphate which is sold locally in the fertilizer industry. 

MISSION AND BUSINESS STRATEGY: 

 Your Company's business is to enter high technology-intensive business that afford an attractive value addition and are protected by technology inspired barriers. 

 The Company is focused to enhance its capacities and market share by puffing up green field projects as well as by acquisitions. 

FUTURE OUTLOOK: 

 Sterling is a global and a significant player in the global gelatin market. Sterling has world class facilities and a world class product with an ambition to consolidate further share in the global market. It has all the necessary licenses, permissions and accreditations to market its products world over. Also, your Company's status has been promoted to One Star Export House. These achievements are well reflected in strong financials of the company providing ammunition for future growth. 

profile

In 1995, Sterling Gelatin and CRODA Colloids, a world leader in Gelatin technology, entered into collaboration agreement to set up brand new Gelatin manufacturing facility in India. The company since then set up the most modern world class facility employing the latest innovations in technology for manufacture of Gelatin managed by high caliber professionals in the industry.

Subject is a major operating division of the diversified Sandesara Group of companies. Its core business is the manufacture of gelatin for pharmaceutical and edible uses where it has established a worldwide reputation for supplying high quality products against very demanding specifications.

Subject operates through large sized plot of area admeasuring 600 sq. mtrs.

Subject employs around 250 persons in its set up.

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] 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.44.13
UK Pound	1	Rs.86.40
Euro	1	Rs.56.99

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	9
--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		64

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

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