MIRA INFORM REPORT

Report Date :

13.01.2007

IDENTIFICATION DETAILS

Name :	ATUL AUTO LIMITED
Registered Office :	Survey No 86, Plot No. 1 to 4, N H 8-B, Taluk : Kotdasangani, Shapar (Veraval) Rajkot.
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	24.01.1992
Com. Reg. No.:	04-16999
CIN No.: [Company Identification No.]	L54100GJ1992PLC016999
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the stock exchanges.
Line of Business :	Manufacturer of Three Wheeler and Motor Bikes

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 :	USD950000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having fine track. Directors are reported as experienced, respectable and having satisfactory means of their own. Their trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Survey No 86, Plot No. 1 to 4, N H 8-B, Taluk : Kotdasangani, Shapar (Veraval) Rajkot.
Tel.No. :	91-2827-253299 / 254499 / 252996 / 998 / 9
Fax No. :	91-2827-252254
Website:	http://www.atulauto.com
Rajkot Manufacturing Unit :	Survey No 86, Plot No. 1 to 4, N H 8-B, Near Micowave Tower, Taluk : Kotdasangani, Shapar (Veraval) Rajkot.
Haridwar Manufacturing Unit :	Sector 2, Plot No 5, IIE, SIDCUL, Ranipur, Haridwar, Uttaranchal.
Wind Turbine Generators :	At Rajasthan : Village Soda-Mada, Jaiselmer, Rajasthan At Gujarat : Village Gandhvi, Jamnagar, Gujarat
Corporate Office :	Jimmy tower, Opposite Swaminarayan Gurukul, Gondal Road, Rajkot – 360002, Gujarat, India
Tel. No.:	91-281-2374991 / 2 / 3
Fax No.:	91-281-2374994
E-Mail :	info@atulauto.co.in
Website:	http://www.atulauto.com
Factory :	8-B, National Highway, Near Microwave Tower, Shapar(Veraval), District – Rajkot, Gujarat, India
Tel. No.:	91-2827-252996 / 8 / 9
Fax No.:	91-2827-252254
E-Mail :	info@atulauto.co.in
Website:	http://www.atulauto.com

DIRECTORS

Name :	Mr J J Chandra
Designation :	Chairman and Managing Director
Date of Birth/ Age :	51 years
Qualifications :	Under Graduate
Experience:	37 years (Automobile Industry)
Date of Appointment:	18.10.1996
Name :	Mr Bharat J Chandra
Designation :	Whole Time Director
Date of Birth/ Age :	50 years
Qualifications :	Graduate
Date of Appointment:	23.06.2001
Name :	Mr Mahendra J Patel
Designation :	Joint Managing Director
Date of Birth/ Age :	43 years
Qualifications :	Commerce Graduate
Date of Appointment:	30.11.1994
Name :	Mr Rajesh H Dhruv
Designation :	Director
Date of Birth/ Age :	51 years
Qualifications :	Commerce Graduate and Chartered Accountant
Date of Appointment:	19.12.1994
Name :	Mr R S Kukrej
Designation :	Director
Date of Ceasing :	31.06.2006
Name :	Mr Suresh T Kaneria
Designation :	Director
Date of Birth/ Age :	46 years
Qualifications :	Commerce Graduate
Date of Appointment:	08.03.2004
Name :	Mr Hakubhai J Lalakiya
Designation :	Director
Date of Birth/ Age :	52 years
Qualifications :	Advocate
Experience:	20 years (Advocate)
Date of Appointment :	31.05.2006

BUSINESS DETAILS

Line of Business :	Manufacturer of Three Wheeler and Motor Bikes.
Products :	Goods Carriers Pickup Van Standard Delivery Van Pickup Van Highdeck Passenger Carriers o Re Passenger o 3+1 Passenger Carriers o 4+1 Passenger Carriers o 6+1 Passenger Carrier o CNG Passenger o LPG Passenger Special Purpose Vehicle o Chicken Carrier o Tipper o Water Tank Carrier o Soft Drink Carrier o Mobile Shop o Hopper o Bio Hazard o Vegetable Van

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Three Wheelers	Number	24000	16208

GENERAL INFORMATION

Bankers :

State Bank of India

Banking Relations :	Satisfactory
Auditors :	Maharishi and Company Chartered Accountants Jamnagar
Subsidiaries :	Khushbu Auto Finance Limited
Associates:	· Khushbu Auto Private Limited · Atul Auto Industries · New Chandra Motor Cycle Agency · New Chandra Motor Cycle House · Atul Petrolium · Atul Motors Private Limited · Atul Auto Agency · Atul Automotives
Group Companies:	· Atul Auto Limited (Manufacturers of Diesel 3 - Wheelers) · Atul Motors Private Limited (Distributor of honda 2-Wheelers) · Atul Auto Agencies (Distributors of Mahindra LCVs) · Atul Automotives (Dealing in Petroleum Fuels and Products) · Atul Petroleums (Mobile and Tele Communication Services) · Atul Tele Services (Real Estate Developers and Builders) · Atul Rachna Private Limited (Batery Manufacturer) · Atul Auto Batteries Private Limited (Auto Finance Company ) · Khushbu Auto Private Limited (Centralised Marketing Organisation) · New Chandra Motor Cycle House (Distributor of LML vesp Scooter, Royal Enfiedl Motor Cycles, etc.)

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
80,00,000	Equity Shares	Rs 10/- each	Rs 80.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5351520	Equity Shares	Rs 10/- each	Rs 53.515 Millions
	Add : Shares Forfeited		Rs 2.329 Millions
	Total		Rs 55.844 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital	55.844	55.844	55.840
2] Share Application Money	0.000	0.000	0.000
3] Reserves & Surplus	180.027	144.149	114.000
4] (Accumulated Losses)	-----	----
NETWORTH	235.871	199.993	169.840
LOAN FUNDS
1] Secured Loans	157.420	112.784	54.200
2] Unsecured Loans	0.000	0.058	2.100
TOTAL BORROWING	157.420	112.842	56.300
DEFERRED TAX LIABILITIES	35.055	22.200
TOTAL	428.346	335.035	226.140
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	240.643	154.603	84.800
Capital work-in-progress	22.176	9.706	1.800
INVESTMENT	22.991	22.960	23.000
DEFERREX TAX ASSETS	0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
Inventories	100.416	72.306	44.400
Sundry Debtors	87.395	62.934	51.000
Cash & Bank Balances	16.113	11.415	23.800
Other Current Assets	0.000	0.000	0.000
Loans & Advances	94.058	56.171	50.300
Total Current Assets	297.982	202.826	169.500
Less : CURRENT LIABILITIES & PROVISIONS	155.446	55.061	53.000
Total Current Liabilities	155.446	55.061	53.000
Net Current Assets	142.536	147.766	116.500
MISCELLANEOUS EXPENSES	0.000	0.000	0.000
TOTAL	428.346	335.035	226.100

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	1318.162	1020.073	779.700
Profit/(Loss) Before Tax	65.087	44.385	31.900
Provision for Taxation	23.107	14.230	12.800
Profit/(Loss) After Tax	41.980	30.155	19.100
Export Value	4.111	0.030	N.A.
Total Expenditure	1253.074	975.687	747.800

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2006	30.09.2006
Type	1^ST Qtr	2^nd Qtr
Sales Turnover	25.60	29.95
Other Income	0.63	0.94
Total Income	26.23	30.89
Total Expenditure	24.12	28.43
Operating Profit	2.11	2.46
Interest	0.33	0.47
Gross Profit	1.78	1.99
Depreciation	0.46	0.48
Tax	0.36	0.28
Reported PAT	0.74	1.01

200606 Quarter 1 --------------- NOTES: 1.The aforesaid result have been taken on record by the audit committee and board of directors of the company at its meeting held on 25th July 2006. 2.Provision for taxation is made at the annual effective Income Tax rate. 3.The previous year figures have been regrouped,rearranged and recast wherever necessary to conform with current period classification. 4.Information on investor complaints pursuant to clause 41 of listing agreement for the quarter ended 30th June 2006: a)Complaints outstanding on 1st April 2006 - NIL b)Total complaints during the quarter ended on 30th June 2006 - NIL c)Total complaints disposed off during the quarter ended on 30th June 2006-NIL d)Outstanding complaints on 30th June 2006 - NIL 5.The auditors of the company have carried out the limited review of the above financial results.

200609 Quarter 2 --------------- Notes 1.The aforesaid results have been taken on record by audit committee and board of directors of the company at its meeting held on 30.11.2006. 2.During the quarter ended 30th September Haridwar unit of company started commercial production of vehicles. 3.The previous year figures have been regrouped,rearranged and recast wherever necessary,to conform with current period classification. 4.There was no investors complaints received during the quarter and none was pending at the beginning of the period.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	0.62	0.46	0.34
Long Term Debt-Equity Ratio	0.38	0.13	0.02
Current Ratio	1.34	1.48	1.51
TURNOVER RATIO
Fixed Assets	5.92	6.98	6.32
Inventory	17.38	19.68	14.95
Debtors	19.97	20.17	15.57
Interest Cover Ratio	7.79	11.55	10.97
Operating Profit Margin(%)	5.92	4.91	5.23
Profit Before Interest And Tax Margin(%)	4.99	4.22	4.51
Cash Profit Margin(%)	3.73	3.31	3.17
Adjusted Net Profit Margin(%)	2.80	2.62	2.45
Return On Capital Employed(%)	21.19	18.00	16.07
Return On Net Worth(%)	19.28	16.28	11.70

STOCK PRICES

Face Value	Rs.10/- each
High	Rs.118.00
Low	Rs.112.10

LOCAL AGENCY FURTHER INFORMATION

Biodata

Incorporated as a private limited company in Jun.'86, Atul Auto was converted into a public limited company in Aug.'94. It was promoted by Jayantibhai J Chandra, Atul J Chandra and Mahendra J Patel. 

  The company set up its plant at Shapar (Rajkot district), Gujarat, with financial assitance from GSFC. Commercial production commenced in Jul.'92. It manufactures diesel three wheelers like 6-seater auto rickshaws, pick-up vans for local transportation of goods and chassis of passenger vehicles. These vehicles are marketed under the Khushbu brand name.

 In 1995-96, the company undertook a project to create additional facilities for the expansion of its three wheelers capacity from 1080 to 3680 vehicles pa and also to establish manufacturing facilities for diesel operated motorcycle with a capacity of 3500 vehicles pa at its existing plant at Rajkot. A public issue was made to the extent of Rs.53.625 Millions. 

 In 1997-98, the company installed its capacity of Motor Bikes FUZI by 3500 Nos. The Automobile Research Association of India has approved vehicle of the company Khushbu RTVG complying with EURO II emission norms during 1999-2000. During 2001-02 Atul Auto ltd has acquired additional 2,20,500 equity shares in M/s Khushbu Auto Finance Pvt Ltd resulting the total holding in such company being the 51% of the equity share capital. Thus Khushbu Auto Finance Pvt Ltd became the subsidiary of the company from 1st April,2002.

Performance

Your Company has performed in a brighten way with increase in turnover and profitability in the fiscal

2005-06. The total turnover of the Company (in terms of Rupees) reached at Rs. 1290.284 Millions during

the year under Report, showing 30.44 % increase as Compared to total turnover of Rs. 989.129 Millions of previous year 2004-2005. The Company has shown excellent performance in the sales (in number of vehicles) as the same increased by 27.17 % to 16,165 as compared to previous year's sales of 12,717 vehicles of year 2004-2005. The same excellence continues in terms of profit before tax, which increased by 46 % at Rs. 65.087 Millions - as compared to Rs. 44.335 Millions of previous fiscal. The net profit after tax has increased to Rs. 41.980 Millions /- showing upward trend when compared with the profit before tax of previous year Khushbu Auto Finance Limited is a subsidiary of the company, engaged in the business as a loan company as a non-banking financial company. As required u/s, 212 of the Companies Act, 1956 the audited accounts of the company for the year ended on 31st March 2006 and auditors report thereon along with director report of subsidiary company are attached herewith.

Power Generation Project

The Company has earned total income of Rs. 8.960 Millions from power generation project as compared to total income of Rs. 1.257 Millions during the last fiscal. The Company has installed 0.600 MW Wind Turbine Generator at Gandhvi, Dist. Jamnagar in January 2006. The Company has earned benefits of saving in power cost since then.

ECONOMIC SCENARIO

The Country witnessed overall growth in the fiscal 2005-2006 in almost all sectors. The Capital market has been in bullish trend throughout the year due to extremely good performances by corporate. The GDP growth and economic scenario of our Country has been in a developing path.

INDUSTRY

The three wheeler industry had shown again a very good performance in fiscal 2005-2006. There was total sales of 3,60,000 Three wheelers in its all segment. Your Company is having around 9.4 % share in its category of diesel three wheelers segment.

The net growth of Industry is expected to continue in forthcoming years also.

SEGMENTS

The company has two windmills operating in the state of Rajasthan and Gujarat respectively. Windmill operating in Gujarat is catering to use of electricity for its manufacturing facility at Rajkot. Segment wise profitability is discussed in segment reporting notes attached with financial statements.

PERFORMANCE

Production:-

The year 2005-06, is another excellence-proven year for your Company. Total production of Company increased from 12729 vehicles to 16208 vehicles.

Sales:-

Total turnover, while represented in number of vehicles, reached to 16165 showing 27.17% uptrend compared to year 2004-2005, whereas, total turnover, when represented in amount, has been boost by 30.44 % to Rs1290.284 Millions in this fiscal.

Profitability:-

The Company has established history of achieving profitability year to year, and this fiscal is not an exception. The Gross profit stood at Rs. 65.087 Millions whereas Net profit after tax stood at Rs.41.980 Millions showing jump as compared to pervious years.

WTG Project

Members are aware that the Company had already installed one Wind Turbine Generator of 1.25 MW capacity at Village Soda, Nr Jaiselmer, State Rajasthan. The Company has earned total income of Rs. 8.960 Millions from power generation project as compared to total income of Rs. 1.257 Millions during the last fiscal. Further, in January, 2006, the Company has installed 0.600 MW Wind Turbine Generator at Gandhvi, Dist. Jamnagar in January, 2006. The Company has earned benefits of saving in power cost since then.

OUTLOOK FOR 2006-2007

Your Company foresees positive outlook in 2006-07. The opportunities in automobile industry are

vast and the company will leave no efforts to grab each and every opportunity for growth. The Company

expects to derive a greater operating leverage on opening of its new manufacturing facilities and thereby

maximizing shareholders' wealth.

Atul Auto eyeing four-wheeler utility vehicle

Small and medium businesses(SMBs)are the most important building blocks of economic and industrial development of any country. India is no exception.In order to recognize and celebrate the achivements of the low-profile Indian SMBs,a Jasubhai Media publication has announced the top 500 SMBs in India based on a survey conducted across the country.

According to the survey,the Rajkot-based three wheeler manufacturer,Atul Auto Ltd. has been ranked seventh among the SMBs in the manufacturing category.This is a huge milestone for the Rs.168-crore company that was started two decades ago with a capital of just Rs.2000 !

Expressing happiness on his company being ranked so high, MR.J.J Chandra,Chairman & managing Director,Atul Auto Ltd., said:"It is indeed a great honour, and it only makes us more responsible for us, and it is due to their relentless efforts that Atul Auto has been able to achive the honour."

He added that it has always been Atul Auto's endeavour to manufacture products making optimum utilization of resources with utmost planning and execution. To cater to the North Indian market, the company has started one more plant at Haridwar, in addition to its Rajkot factory.

Both these plants have similar manufacturing processes and follow stringent quality standards. Interestingly, both the plants employ ERP systems to streamline their supply chain processes.

The Rajkot plant has an annual capacity to prodece 24,000 vehicles on a single shift basis, while the Haridwar plant has a capacity of 12,000 vehicles. Since last year, the company started exporting its vehicles to some of the African countries such as Kenya and Tanzania.

Always on the look-out for new challenges and opportunities, Atul Auto is now eyeing the four-wheeler utility vehicle that will have the lowest total cost of ownership. This project is currently on the drawing board, and the company expects the first four-wheeler to roll out in a couple of years.

Atul Auto pioneered motorized rural transport in Saurashtra Gujarat, with a 500 kg transport vehicle called the Khushbu. This vehicle has been instrumental in transforming the economy of Saurashtra by bridging the rural-urban divide. Despite the fact that production of Khushbu Chakkdo was atopped in 2003, interestingly over 1,25,000 vehicle still ply on the roads of Saurashtra. These vehicles still remain a core means of livelihood for as many families.

In 2001,Atul Auto launched its first one-ton three-wheeler under the brand name"Shakti" , which is now even exported to some African countries.

SECURED LOANS

From Banks

A) As a Cash Credit Rs in Millions

a) State Bank OF India Overseas Branch	36.739	66.174
FRWD Charges	0.566	0.056
Interest Payable	0.818	0.297
	38.124	66.528

b] State Bank of India Secured Against equitable mortgage of land and building and against hypothecation of movable properties, stock and book debts of the company and personal guarantee of some of the directors of the company	38.124	6.255 72.784
B] Term Loan
a] State Bank of India (Windmill Rajasthan) Secured against charge on wind turbine generator at soda mada (Rajasthan) and by equitable mortgage of immovable properties of the company and hypothecation of plant and machinery and personal guarantee of some of the directors of the company	38.000	40.000
b]State Bank of India (Windmill Gujarat) Secured against charge on wind turbine generator at Lamba (Gujarat) and by equitable mortgage of immovable properties of the company and hypothecation of plant and machinery and personal guarantee of some of the directors of the company.	22.064
C] State Bank of India (Windmill Shapar) First charge over the assets created out of the Term Loan i.e. equitable mortgage over the building and hypothecation ofplant and machinery and personal guarantee of some of the directors of the company.	33.703
d] State Bank of India (Haridwar Project) First charge over the assets to be created over out to the term loan at haridwar i.e. factory, land, building and plant and machinery and personal guarantee of some of the directors of the company.	19.614
e]Standard Chartered Bank secured against the assignment of key insurance policy of the company	5.913
Sub-total	119.296	40.000
Total	157.420	112.784

Assets

· Land

· Factory Building

· Building

· Plant and Machinery

· Furniture

· Vehicles

· Other Assets

· Windmill

· Lease Land (for Windmill)

Fixed Assets at Haridwar

· Land

· Vehicles

· Tube Well

Corporate Profile

Today, when you see or travel by the convenient 'chhakada' you rarely realize who invented this amazing people-friendly transportation vehicle. Well, we take pride in mentioning our founder’s name – the Late Mr. Jagjivanbhai Karsanbhai Chandra. He was a man of vision. A Dreamer. An Inventor. A Strategist. And an ingenious master-mind who loved challenges.

Back in the 1970’s, when transportation was a crucial problem especially in rural areas, he decided to blaze a new trail. He was thinking of an affordable mode of transportation which can benefit rural folks of Saurashtra. The road conditions were not good but the need for transportation was increasing day in and day out. After thorough research and planning, he came up with a vehicle which was skillfully engineered from a motorcycle. And this is how the first 'chhakada' was developed which later became a way of life for the people of Saurashtra.

The improvements in technologies were done from time to time to make it a sturdy and comfortable vehicle. And like father like son, Mr. Jayantibhai Chandra also joined this mission. He took his illustrious father’s vision further. He introduced diesel ‘chhakada’ with many new features, and soon 150,000 'chhakadas' were rolling all over Saurashtra making it easy for passengers.

Our passion did not end with success of 'chhakada'. The Group’s main focus was now to engineer similar product for semi-urban and urban areas. Soon, 'Shakti' was on the road which proved to be a runaway success and other vehicles like Half Tonner, Commercial 3-wheeler and more were also introduced under the brand name of shakti.

What’s more, in the last three years, the production and turnover has doubled. Today the combined turnover of the Atul Group is approximately Rs. 1.5 Billion (US $30 Million) and it is achieved only because of the far-sightedness of Late Mr. Jagjivanbhai Karsanbhai Chandra and unending efforts of Mr. Jayantibhai Chandra. Thanks to them, the Atul Group of Industries is pronounced as a leading manufacturer of three-wheeled commercial vehicles in Gujarat.

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.44.25
UK Pound	1	Rs.87.30
Euro	1	Rs.57.36

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	9
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		60

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