MIRA INFORM REPORT

Report Date :

26.06.2007

IDENTIFICATION DETAILS

Name :	RENFRO INDIA PRIVATE LIMITED
Formerly Known As :	KARNIKA HRWITS INTERSOCK PRIVATE LIMITED
Registered Office :	Gat No. 1231 (Part), Sanaswadi, Taluka Shirur Pune – 412 208, Maharashtra.
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	06.10.1995
Com. Reg. No.:	25-18285 (Old 11-093343)
CIN No.: [Company Identification No.]	U17118PN1995PTC018285
TAN No.: [Tax Deduction & Collection Account No.]	MUMR13250G
Legal Form :	Private limited liability company
Line of Business :	Manufacturer, Marketers, Traders, Importers, Exporters, Wholesalers, Retailers and Dealers of knitwears like socks, synthetics and man-made fibers, wool, jute, silk coir, hemp, flax, yarn and synthetic fibre yarn.

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small

Maximum Credit Limit :	USD 348000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. Profit margin is under sever pressure. It has some accumulated losses. Payments are reported as slow and delayed. The company can be considered for small business dealings with slight caution, initially.

LOCATIONS

Registered Office :	Gat No. 1231 (Part), Sanaswadi, Taluka Shirur Pune – 412 208, Maharashtra, India
Tel. No. :	91-2137-252809
Email :	admin@renfroindia.com
Head Office :	307, Gateway Plaza Hiranandani Garden Adishankaracharya Road Pawai Mumbai – 400076
Tel. No.:	91-22-25700448
Fax No.:	91-22-25770485
Area :	Owned
Factory :	Gat No. 1231 (Part), Sanaswadi, Taluka Shirur Pune – 412 208, Maharashtra, India
Tel. No. :	91-2137-252809

DIRECTORS

Name :	Mr. Yoginder Chugh Ramachand Pal
Designation :	Chairman cum Managing Director
Address :	6 Bournvelle Apartments 19, Bhulabhai Desai Road, Mumbai – 400026, Maharashtra, India
Date of Birth/Age :	06/03/1937
Date of Appointment :	06/10/1995
Name :	Mr. Hurwits Josheph Delovis
Designation :	Director
Address :	Loc Paludi Zona Industrial 32010 Pieve D Alpaga Belluno Verice Italy
Date of Birth/Age :	04/09/1945
Date of Appointment :	23/10/1998
Name :	Mr. Rohit Yogindar Pal
Designation :	Director
Address :	V-102, Satelite Towers, Mundhwa, Pune – 411036, Maharashtra, India
Date of Birth/Age :	08/10/1968
Date of Appointment :	24/06/2004
Name :	Mr. Pratap Chaganlal Ashok
Designation :	Director
Address :	Villa Belle Awatikabai Gokhale Road, Mumbai – 400004
Date of Birth/Age :	02/10/1940
Date of Appointment :	12/07/1996
Name :	Mr. Suresh Narsappa Talwar
Designation :	Director
Address :	9A/3 Navjivan Society, Mori Road, Mahim, Mumbai – 400016, Maharashtra, India
Date of Birth/Age :	21/11/1938
Date of Appointment :	12/07/1996
Name :	Mr. Taran Natverlal Sheth
Designation :	Director
Address :	704 Free Press House, Free Journal Road, Nariman Point, Mumbai – 400021, Maharashtra, India
Date of Birth/Age :	23/05/1937
Date of Appointment :	19/02/1997
Name :	Mr. Hagen Carl
Designation :	Director
Address :	Loc Paludi Zona Industrial 32010 Pieve D Alpaga Belluno Verice Italy
Date of Birth/Age :	15/10/1943
Date of Appointment :	19/12/2000
Name :	Mr. Warren Cecil Nichols
Designation :	Director
Address :	3, Lawrelyn, MT Airy, NC 27030, USA
Date of Birth/Age :	22/10/1937
Date of Appointment :	24/09/2002
Name :	Mr. Andrew Lomax Kilby Jr
Designation :	Director
Address :	216, Howard Street, MT Air, NC 27030, USA
Date of Birth/Age :	24/01/1951
Date of Appointment :	24/09/2002
Name :	Mr. George Michael Bowman
Designation :	Director
Address :	117, Hunting Hill Drive, MT Airy, NS 27030, USA
Date of Birth/Age :	09/01/1951
Date of Appointment :	24/09/2002
Name :	Mr. Ashok Murlidhar Wadhwa
Designation :	Director
Address :	101A, Maker Tower, Cuffe Parade, Mumbai – 400005, Maharashtra, India
Date of Birth/Age :	18/07/1960
Date of Appointment :	24/06/2004

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
Intersocks SPA	59375
Carely Holdings Private Limited	304388
Aekta Transt	103381
Mr. Ashok Murlidhar Wadhwa	735218
Mr. Rohit Yogindar Pal	10
Renfro Corporation USA	2909368
Mr. Yoginder Chugh Ramachand Pal	1825746
Renfro and Cary Holdings Limited	3092700

Names of Shareholders	% of Shareholdings
Foreign Holdings (Foreign Institutiional Investors/ Foreign Companies/ Foreign Financial Institutions/ Non Resident Indian/ Overseas Corporate Bodies or Others)	55.00
Directors or Relatives of Directors	45.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer, Marketers, Traders, Importers, Exporters, Wholesalers, Retailers and Dealers of knitwears like socks, synthetics and man-made fibers, wool, jute, silk coir, hemp, flax, yarn and synthetic fibre yarn.
Products :	Socks Synthetics and Man-Made Fibers Wool Jute Silk Coir Hemp Flax Yarn and Synthetic Fibre Yarn

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Knitted Socks	Units	12000000	6930000
Garments	Units	5040000	5623000

GENERAL INFORMATION

No. of Employees :	150
Bankers :	IndusInd Bank Limited 2401, East Street, Pune – 411 001, Maharashtra, India
Banking Relations :	Unknown
Auditors :
Name :	S R Batliboi and Company Chartered Accountants
Address :	The Metropole, F1, 1^st Floor, Bund Garden Road, Pune 411 001, Maharashtra, India
Tel. No.:	91-22-28323022
Mobile No.:	91-22-28383093
Fax No.:	anilfca@bom7.vsnl.net.in

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
6000000	Equity Shares	Rs. 10/- each	Rs. 60.000 millions
11250000	Preference Shares	Rs. 10/- each	Rs. 112.500 millions
	Total		Rs. 172.500 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5937486	Equity Shares	Rs. 10/- each	Rs. 59.375 millions
8518275	Preference Shares	Rs. 10/- each	Rs. 85.182 millions
	Total		Rs. 144.557 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		144.557	90.302
2] Reserves & Surplus		0.000	0.000
4] (Accumulated Losses)		(57.586)	(34.325)
NETWORTH		86.971	55.977
LOAN FUNDS
1] Secured Loans		146.138	193.108
2] Unsecured Loans		7.516	3.745
TOTAL BORROWING		153.654	196.853
DEFERRED TAX LIABILITIES		0.000	8.467
TOTAL		240.625	261.297
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		174.860	187.085
Capital work-in-progress		6.755	6.165
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	69.606	71.411
	Sundry Debtors	14.934	42.123
	Cash & Bank Balances	6.161	5.734
	Other Current Assets	1.824	0.000
	Loans & Advances	15.674	12.406
Total Current Assets		108.199	131.674
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	46.547	61.516
	Provisions	2.642	2.164
Total Current Liabilities		49.189	63.680
Net Current Assets		59.010	67.994
MISCELLANEOUS EXPENSES		0.000	0.053
TOTAL		240.625	261.297

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005
Sales Turnover [including other income]	250.000	250.000

KEY RATIOS

PARTICULARS	31.03.2002	31.03.2001
Debt Equity Ratio (Total Liability/Networth)	3.33	5.80
Current Ratio (Current Asset/Current Liability)	2.20	2.06

LOCAL AGENCY FURTHER INFORMATION

Renfro India acquires Salora Shinsung

Mumbai , Jan. 29

RENFRO India Private Ltd, an Indian joint venture of Renfro Corporation US, on Thursday announced it had acquired Salora Shinsung Textile Company, a 100-per cent export-oriented sock manufacturing unit, located at Nashik.

With the acquisition, the manufacturing capacity of Renfro India has increased to 300 knitting machines, making it, according to the company press release, the largest manufacturer of socks in India.

The acquisition is in line with company plans to increase its manufacturing capacity to cater to increasing demands of the US and European markets. The company has also enhanced its capacity at its manufacturing facility at Sanaswadi near Pune.

Renfro India will thus become an increasingly important sourcing base for Renfro Corporation globally. Mr C.Y. Pal, Chairman, Renfro India, said in the press release: "We have been looking at setting up manufacturing facilities in India and Salora's manufacturing unit provided us with the right opportunity. With enhanced capacity, we hope to become an important source of supply for Renfro Corporation."

The agreement between Salora Shinsung Co and Renfro India was signed in early January 2004. Mr Sushil Jiwarajka, Managing Director of Salora Shinsung Textile Company, said, "We are in the process of consolidating our businesses and were planning to exit this non-core sector of socks manufacturing." Renfro India (a 50:50 joint venture Renfro Corporation and Karnik Group) plans to export more than 18 million pairs of socks per year and hopes to generate a turnover of Rs 40 crore in the current year

Renfro India acquires Salora Shinsung Textile Company
Our Corporate Bureau
31 January 2004

Mumbai: Renfro India Private Limited, an Indian Joint Venture of Renfro Corporation USA, has announced its acquisition of Salora Shinsung Textile Company, a 100% Export Oriented socks manufacturing unit, located at Nashik.

With the acquisition of this 172 machine unit, the manufacturing capacity of Renfro India has more than doubled to 300 knitting machines, making it the largest manufacturer of socks in India.

The acquisition is in line with the company's plans to increase its manufacturing capacity to cater to the increasing demand of the US and European markets. The company has also enhanced its capacity at its state-of-the-art manufacturing facility at Sanaswadi near Pune. Renfro India, currently a 100 per cent EOU, will thus become an increasingly important sourcing centre for Renfro Corporation globally.

C.Y. Pal, chairman, Renfro India says, " With high quality and technological expertise, India has emerged as a major outsourcing hub for Renfro and we are very happy to meet with the increasing demands entrusted upon us. We have been looking at setting up manufacturing facilities in India and Salora's manufacturing unit provided us with the right opportunity. With enhanced capacity, we hope to become an important source of supply for Renfro Corporation." The agreement between Salora Shinsung Co and Renfro India was signed in early January 2004. Sushil Jiwarajka, Managing Director of Salora Shinsung Textile Company, said, "We are in the process of consolidating our businesses and were planning to exit this non-core sector socks manufacturing business. We are very pleased at having concluded the deal with a leading player like Renfro India."

History of Renfro

Renfro Hosiery Mills Company was founded in 1921 with 25 employees.  Today, Renfro employs over 4,500 people worldwide.  The company operates manufacturing facilities in North Carolina, South Carolina,  Alabama, and in India, Turkey, Pakistan, and Mexico.  It also operates Sales and Distribution Centers in North Carolina, South Carolina, and in Europe, Canada and Mexico.

In 1990, Renfro was awarded the prestigious Class A MRP II manufacturing designation.  MRP II is a sophisticated manufacturing planning system and Renfro is the only hosiery manufacturer that has achieved this distinction.  The 1996 acquisition of Fruit of the Loom Hosiery Division positioned Renfro to extend its domestic leadership to the rest of the world.

Renfro is leading the development of consumer-based marketing across all retail channels for analysis with consumer-based category management systems.  This enhances the Company's ability to identify, market, and manufacture products dedicated to the latest in emerging trends, fashions, and characteristics wanted by consumers.

Brands

Socks manufactured by Renfro under these brands and trademarks can be found at many of the leading retailers in the United States and around the world. Please note that each retailer will carry different products and assortments of socks, so please contact your local retail outlet to determine availability of a particular program listed below. You may also contact Renfro at socks@renfro.com to inquire where to find these quality programs.

Ø FRUIT OF THE LOOM

Ø VASARETTE

Ø FIT FIRST

Ø BONNIE DOON

Ø STARTER

Ø DUCKS UNLIMITED

Ø ODOR EATERS

India's socks capacity may restrict exports

US orders for socks could find a way into India, following the US embargo on imports from China. Can the Indian socks industry take advantage of this scenario? Reena Mital finds out.

Textile safeguards against China have raised the hopes of the Indian textile exporters. And in fact, apparel exporters have started receiving higher orders for certain products.

However, this may not happen in case of socks exports, where China is facing an embargo from the United States. It may be recalled that the US had recently imposed an embargo on socks imports from China, which according to reports, will be stuck at US ports till November 29.

Speaking to Express Textile, Mr C Y Pal, chairman, Renfro India Pvt Ltd, the largest socks manufacturer in the country, said, “India’s capacities are not so huge as to be able to service voluminous orders. There are just 3-4 socks exporters in the country that meet international quality standards.” India’s present exports of socks is around Rs 50 crore per annum, which could go up to Rs 100 crore within the next two years.

India has a lot of socks manufacturers, but most of them in the small scale sector, in Ludhiana, Amritsar, etc, where quality is not very good. Most of these socks are supplied in the domestic market through unorganised retailing. “Typically, each unit would have not more than 20-30 knitting machines, which gives an idea of the production capacity per unit. This has been a decentralised industry, in large part due to the government policy of SSI reservation. The sector was dereserved very recently, and we hope to see some larger capacities coming up in the years to come. In the present situation, there are hardly any national brands in socks. Most of the apparel and sportswear brands in the country that also have accessories such as socks in their product portfolios, source the same from the smaller but better units,” said Mr Pal.

Renfro is a North Carolina based socks company, the largest in the world, which is now setting up manufacturing bases in low-cost countries, including India, Pakistan, China, Turkey, and has a distribution company in Europe. “The focus is mainly on exports, though there are plans to enter the domestic market too. Our exports this year would be to the tune of Rs 30 crore, which we expect to increase to Rs 50-60 crore within the next one year to 18 months.” The company supplies to some of the largest European retailers such as Tesco, Decathlon, Wal-Mart, etc.

The company has 330 knitting machines, and is in the process of installing another 170 machines by the end of this year. As against this, most of the other exporters have less than 100 machines. The company is mainly into manufacturing and exports of dress socks, though it does some amounts of sports socks too.

According to Mr Pal, “The socks market within the country too has not been tapped. It is only over the last one year or so that there is some attention paid to quality. And customers have also started demanding quality products. However, the disorganised market and unbranded socks cater to a major portion of the market in the country.”

Industry experts point out that not many socks manufacturers are increasing capacities to any significant extent, neither are new players entering the market. Says Mr Pal, “There is definitely an opportunity for India if embargoes and other safeguards are imposed against Chinese socks imports to the US. However, buyers will not shift all their orders to India, even as they may increase sourcing to some extent. There are many other strong socks manufacturers such as Pakistan, Turkey, Mexico, Egypt, and these will certainly be big gainers following the embargo on China’s socks exports to the US.”

FORM 8

Name of the company	RENFRO INDIA PRIVATE LIMITED
Presented By	Mr. Rohit Pal, Director
1) Date and description of instrument creating the change	Agreement of hypothecation of goods and assets dt. 15.05.1997
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 17.500 millions
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	Present and future goods, book debts, movable assets, including documents of title of goods, outstanding monies, receivables.
4) Gist of the terms and conditions and extent and operation of the charge.	Rate of Interest: 13% p.a.
5) Name and Address and description of the person entitled to the charge.	IndusInd Bank Limited 2401, East Street, Pune – 411 001, Maharashtra, India
6) Date and brief description of instrument modifying the charge	Supplemental hypothecation for stocks, book debts, receivables dt. 17.01.2002 further modified by supplemental hypothecation for stock, book debts, receivables dt, 19.04.2003 further modified by creation of mortgage by way of deposit of title deeds dated 01.10.2003, further modified by supplemental deed of hypothecation for stock, book debts, and receivables etc. dt. 20.01.2004, further modified by supplemental deed of hypothecation for stock, book debts, and receivables etc. dated 01.03.2004 further modified by supplemental deed of hypothecation for stock, book debts, and receivables etc, dated 08.06.2004. Now further modified by creation of mortgage by way of deposit of title deeds in respect of the borrower’s lands and other immovable properties situated at village Wadivarhe, Taluka Igatpuri, District Nashik within the limits of Grampanchayat Wadivarhe, within the limits of Taluka Panchayat Samiti Igatpuri, bearing Gat No. 350 on 03.09.2004 No instrument was executed. No instrument was executed. Further modified on 24.02.2005 in favour of Indusind Bank Limited.
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	The charge is now extended to secure an additional facility of Rs. 10.500 millions thus modifying the total amount to Rs. 28.000 millions on the following terms: Rate of Interest 9% p.a. in respect of the entire facility. First charge on 20 Knitting Machines created out of deferred payment guarantees. Second charge on all other fixed assets. The charge is further extended by additional facility of Rs. 22.000 millions (fund based limit of Rs. 18.500 millions + non fund based limit of Rs. 3.500 millions aggregating the additional limit of Rs. 22.000 millions) to cover the total limit of Rs, 50.000 millions, subject to the following terms and conditions: Rate of Interest: minimum of 8% p.a. at monthly rest Hypothecation of stock, book debts and other current assets First charge on Knitting machines acquired from deferred payament guarantee Second charge on all fixed assets EPC/ PSC to be repayable on demand The charge is further modified by creation of mortgage by deposit of title deeds, on its immovable properties situated at Gat No. 1231/ part (Old Survey No. 113/1A) within the village limit of Sanaswadi, Taluka, Shirur, District Pune, in the State of Maharashtra, in favour of IndusInd Bank Limited towards its working capital limit aggregating Rs. 50.000 millions on second charge basis. The charge is futher extended by additional facility of Rs. 5.000 millions (Bank Guarentee limit of Rs. 5.000 millions) to cover the total limit of Rs. 55.000 millions, subject to the following terms and conditions: Rate of Interest: minimum of 8% p.a. at monthly rest Hypothecation of stock, book debts and other current assets First charge on Knitting machines acquired from deferred payament guarantee Second charge on all fixed assets EPC/ PSC to be repayable on demand The charge is futher extended by additional facility of Rs. 12.500 millions (Export Packing Credit limit of Rs. 12.500 millions) to cover the total limit of Rs. 67.500 millions, subject to the following terms and conditions: a. Rate of Interest: minimum of 7 p.a. at monthly rest b. Hypothecation of stock, book debts and other current assets c. First charge on 20 Knitting machines acquired from deferred payament guarantee d. Second charge on all fixed assets e. EPC/ PSC to be repayable on demand The charge is futher extended by additional facility of Rs. 37.000 millions to cover the total limit of Rs. 104.500 millions, subject to the following terms and conditions: a. Rate of Interest: minimum of 7 p.a. at monthly rest b. Hypothecation of stock, book debts and other current assets c. First charge on 20 Knitting machines acquired from deferred payament guarantee d. Second charge on all fixed assets e. EPC/ PSC to be repayable on demand Now the charge is further modified by creation of mortgage by way of deposit of title deeds in respect of the borrower’s land and other immovable properties situated at village Wadivarhe, Taluka Igatpuri, District Nashik within the limits of Grampanchayat Wadivarhe, within the limits of Taluka Panchayat Samiti Igatpuri, bearing Gat No. 350 in the State of Maharashtra, on 03.09.2004 in favour of IndusInd Bank Limited towards its working capital limit aggregating Rs. 104.500 millions on second charge basis. The charge is further modified by creation of mortgage by deposit of title deeds, on its immovable properties situated at Gat No. 1231/ part (Old Survey No. 113/1A) within the village limit of Sanaswadi, Taluka, Shirur, District Pune, in the State of Maharashtra, as second charge in favour of IndusInd Bank Limited towards its working capital limits aggregating Rs. 104.500 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.40.95
UK Pound	1	Rs.81.80
Euro	1	Rs.55.09

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	--
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--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		31

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

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