MIRA INFORM REPORT

Report Date :

12.04.2007

IDENTIFICATION DETAILS

Name :	SHAILY ENGINEERING PRIVATE LIMITED
Registered Office :	51, Dariya Sthan STGR Floor, Vadgadi, Mumbai-400003, Maharashtra
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	18.04.1980
Com. Reg. No.:	11-22531
CIN No.: [Company Identification No.]	U25209GJ1985PLC008354
TAN No.: [Tax Deduction & Collection Account No.]	BRDS01847G
Legal Form :	Subject is a Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing and Selling of Engineering Plastic Components and Mouldings.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 490000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	51, Dariya Sthan STGR Floor, Vadgadi, Mumbai-400003, Maharashtra, India
Tel. No.:	91-22-23424724 / 23436666
Fax No.:	investors@shally.com
Website :	http://www.shaily.com
Area :	2000 sq.fts. (Leased)
Corporate Office :	8, J. P. Nagar, Opp. GEB Colony, Old Padra Road, Baroda – 390 015, Gujarat, India
Tel. No.:	91-265-2330674 / 2332723
Fax No.:	91-265-2332723
E-Mail :	mail@shaily.com
Factory 1 :	Plot No. 706, 707, 708 GIDC, Halol – 389 350, District Panchmahals, Gujarat
Tel. No.:	91-2676-221569 / 222913 / 14
Fax No.:	91-2676-220183
E-Mail :	halol@shaily.com
Area :	20001 Sq. Mtrs (Leased)
Factory 2 :	Survey No. 364 & 366, At Post Rania – 391 780, Taluka Savli, District Baroda, Gujarat, India
Tel. No.:	91-2667-244307 / 244361 / 244348
Fax No.:	91-2667-244372
Area :	2226 Sq. Mtrs (Leased)
Factory 3 :	Survey No. 364/1-2(A), At Post Rania – 391 780, Taluka Savli, District Baroda, Gujarat
Area :	4571 Sq. Mtrs.
Overseas Office :	Industrial Design Consultancy The Portland Business Centre Manor House Lane, Datchet, Slough Berkshire SL3 9EG UK
Tel. No.:	44 (0) 1753-547610
Fax No.:	44 (0) 1753-549224
E-Mail :	brian.gough@idc.uk.com
Website :	http://www.idc.uk.com
Branches :	Located at : v Gujarat v Mumbai v USA v UK

DIRECTORS

Name :	Mr. Hasmukh S. Shah
Designation :	Chairman
Date of Birth/Age :	04.10.1934
Name :	Mr. Mahendra B. Sanghvi
Designation :	Managing Director
Date of Birth/Age :	22.02.1948
Qualification :	B.Sc. (Chemical), B.S. Chemical Engineering
Experience :	34 years
Date of Appointment :	30.12.1985
Previous Employment :	GB Book Plastic Company, Canada
Name :	Mrs. Tilottama Sanghvi
Designation :	Wholetime Director
Date of Birth/Age :	28.10.1948
Name :	Mr. Laxman B. Sanghvi
Designation :	Executive Director
Date of Birth/Age :	02.07.1956
Name :	Mr. Jayesh Mohanlal Shah
Designation :	Director
Date of Birth/Age :	16.09.1956
Name :	Mr. Bharat B. Sanghvi
Designation :	Director
Address :	45, Winter Mute Bvide, Scarborough, Ontario M1w3M7, Canada
Date of Birth/Age :	08.10.1951
Name :	Mr. Sarup Chowdhary
Designation :	Director
Name :	Mr. Nilesh Bansilal Mehta
Designation :	Director
Date of Birth/Age :	24.04.1962
Name :	Mr. A. S. Anandkumar
Designation :	Director
Name :	Mr. V. B. Buch
Designation :	Additional Director

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	4290430	73.74
Mutual Funds	108600	01.87
Banks FIs and Insurance Companies	Nil	Nil
Foreign Institutional Investors	Nil	Nil
Private Bodies Corporate	209600	3.60
Indian Public	1171730	20.12
NRI/OCBs	39250	0.67

BUSINESS DETAILS

Line of Business :	Manufacturing and Selling of Engineering Plastic Components and Mouldings.
Products :	Other Articles of Plastics and Articles of other manufacturing material Components and other articles of plastics Moulds Mould design, consultancy and repairing
Exports :
Products :	Knobs
Countries :	USA, Europe and Far East Asia
Imports :
Products :	Raw materials
Countries :	Canada, Far East Asia, Germany, The Netherlands, Japan, Taiwan and USA
Terms :
Selling :	--
Purchasing :	L/C terms

PRODUCTION STATUS

Particulars	Unit	Actual Production
Components and Articles of plastics Moulds	Qty.	168173730

GENERAL INFORMATION

Suppliers :

v Aashirwad Poly-plast

v Adroit Polymers

v Aeropack Products

v Akvira Arts

v Apte & Apte Organic Coating

v Arav Enterprises

v B R Engineering Works

v Bharat Hardware Industries

v Bharti Enterprises

v Blue Stare Metal & Engineering Works

v C K Industries

v Careprint

v D P Polymers Products

v Dwarika Plastic Industries

v Efficient Engineering

v Eknath Industries

v Elegant Coating Private Limited

v Golden Plastics Industries

v Heliflex Hydraulics & Engg Co

v jasmin Enterprises

v Jay Ambe Plastic & Engineering

v Kalyanin engineering Works

v Kamal Industries

v Kantilal Chhotalal & Co

v Kinnari Printing Technologies Private Limited

v Kinnari Pad Flex

v Multipack Industries

v Maruti Plastics

v Mech Cad Services

v Meet Enterprises

v Modern Engineering & spring Co

v Om Sai Decoplast Private Limited

v P P Plasrtics

v Pagar & Sons

v Patson Machine Tools

v Pioneer Engineering Corporation

v Prabhat Tech Mark Consultant

v Prabhat Udyog

v Precision Spring Works

v Raviraj Industries

v Romil Industries

v R S Engineers

v Shiv Om Brass Manufactures

v Shree Tulja Industries

v Shreenathji Engineers

v Smit Printers

v Solar Industries

v Sterling Electrical Products

v Supreme Lamp

v Shree Kuldevi Polymers

v Super Metal Industries

v Technocomp

v Trushna Engineering

v Turn O Precision

v Udvadia Engineering Works

v Unichem Metal works

v Unifab Engineers

v Unitrade India

v Vaishnav Fastners

v Vibhuti Consultants Designers

v Viksan Industries

Customers :

v Panax Appliances Private Limited

v Shaily-IDC India Private Limited

v Stallion Textiles Limited

v Stanford Leasing & Fin. Limited

v SunidoTextile Limited

No. of Employees :

250

Bankers :

v State Bank of India, Halol Branch, District Panchmahals, Gujarat

v ICICI Bank Limited, Land Mark, Race Course, Baroda – 390 007, Gujarat

v The Citizen Co-operative Bank Limited, Baroda, Gujarat

Facilities :

Secured Loans (Rs. in millions) :

Industrial Development Bank of India	--
State Bank of India – Term Loan	13.826
State Bank of India – Corporate Loan	45.044
Hire Purchase Facilities
From Others	1.247
Working Capital loans
Cash Credit from State Bank of India	21.183
State Bank of India FCNRB Demand Loan	29.045
State Bank of India (EPC) Loan	13.571
Foreign Bills Receivable and Discounting	31.213
Total	155.129

Term Loan, Corporate Loan, working capital and other financial arrangements from State Bank of India are secured by

- Hypothecation of the company s fixed assets

- Mortgage of the immovable property of the company located at:

Plot* 706,707 & 708 at GIDC , Halol.

Survey # 366,364/1, 364/1 (A) and 364/2 at Rania

-' Hypothecation of the company s present and future current assets of the company

- The facilities have been guaranteed by some of the Directors of the company.

Hire Purchase Facilities from different Companies/ financial Institutions are secured under the scheme for acquiring plant and machineries, equipments and vehicles. These facilities have been guaranteed by some of the Director of the company.

Unsecured Loans :

Loans from Directors	1.250
Loans from Others	4.359
Sales tax under deferment scheme	39.038
Total	44.647

Banking Relations :	Satisfactory
Auditors :
Name :	Shah Sanghvi & Company Chartered Accountants
Memberships :	Confederation of Indian Industry
Associates/Subsidiaries :	v Panax Appliances Private Limited. v Shaily-IDC India Private Limited. v SunidoTextilesLimited v StallionTextilesLimited v Stanford Leasing and Finance Limited v Shah Kanji Raichand and Company

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
6000000	Equity Shares	Rs.10/- each	Rs.60.000 millions
3000000	Equity Shares	Rs.10/- each	Rs.30.000 millions
700000	10% Redeemable Cumulative Preference Shares	Rs.10/- each	Rs.7.000 millions
300000	6% Redeemable Cumulative Preference Shares	Rs.10/- each	Rs.3.000 millions
	Total		Rs.100.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5818610	Equity Shares	Rs.10/- each	Rs.58.186 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		58.186	63.326
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		65.215	52.867
4] (Accumulated Losses)		0.000	0.000
NETWORTH		123.401	116.193
LOAN FUNDS
1] Secured Loans		155.129	76.729
2] Unsecured Loans		44.647	57.739
TOTAL BORROWING		199.776	134.468
DEFERRED TAX LIABILITIES		7.278	0.000
TOTAL		330.455	250.661
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		156.045	148.006
Capital work-in-progress		0.000	0.000
INVESTMENT		8.056	8.056
DEFERREX TAX ASSETS		0.000	0.942
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	41.148	37.130
	Sundry Debtors	141.943	88.103
	Cash & Bank Balances	9.104	5.508
	Other Current Assets	0.000	0.000
	Loans & Advances	28.394	18.744
Total Current Assets		220.589	149.485
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	44.200	51.889
	Provisions	11.493	6.716
Total Current Liabilities		55.693	58.605
Net Current Assets		164.896	90.880
MISCELLANEOUS EXPENSES		1.458	2.777
TOTAL		330.455	250.661

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005
Sales Turnover		376.260	290.637
Other Income		2.149	4.009
Total Income		378.409	294.646
Profit/(Loss) Before Tax		26.552	10.306
Provision for Taxation		8.791	(0.122)
Profit/(Loss) After Tax		17.761	10.428
Total Earnings		82.633	54.168
Imports :
	Raw Materials	43.084	32.828
	Others	15.655	10.086
Total Imports		58.739	42.915
Expenditures :
	Manufacturing Expenses	81.829	68.518
	Raw Material Consumed	178.332	140.314
	Salaries, Wages, Bonus, etc.	47.396	38.135
	Interest	15.706	9.746
	Depreciation & Amortization	28.593	27.626
Total Expenditure		351.857	284.340

QUARTERLY RESULTS

PARTICULARS	30.06.2006 (1^st Qtr.)	30.09.2006 (2^nd Qtr.)	31.12.2006 (3^rd Qtr.)
Sales Turnover	97.700	137.100	183.800
Other Income	0.800	0.000	0.500
Total Income	98.500	137.100	184.300
Total Expenditure	84.700	113.700	152.000
Operating Profit	13.800	23.400	32.300
Interest	4.100	5.200	6.400
Gross Profit	9.700	18.200	25.900
Depreciation	7.300	7.800	8.800
Tax	0.200	1.700	0.000
Reported PAT	2.200	8.400	17.100

200606 Quarter 1

Notes

Expenditure includes Purchases & Raw Material Rs 47.553 million Staff Cost Rs 12.311 million other Costs Rs 25.669 million (Increase)/Decrease in stock in Trade Rs (0.775)million Tax indicates Fringe Benefit Tax EPS is Basic & Diluted Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. Provision for current & deferred tax liability has not been made and will be made if applicable at the end of the year. 2. Figures for previous year ha been regrouped / rearranged wherever necessary. 3. As the Company operates in a single primary business segment, disclosure requirements as per Accounting Standard 17 (AS-17) on segmental reporting are not applicable. 4. The above results have been subject to limited review by the statutory auditors and have been approve and taken on record by the Board of Directors at their meeting held on July 28, 2006.

200609 Quarter 2

NOTES:

EPS is Basic Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter Nil 1. Figures for previous year have been regrouped / rearranged wherever necessary. 2. Provision for taxation / deferred tax has been made for the current year while for last year the same was made a the end of the year. Fringe benefit tax includes tax paid and provision made for the Period. 3. As the Company operates in a single primary business segment, disclosure requirements as per Accounting Standard 17 (AS-17) on segmental reporting are not applicable. 4. The above results were taken on record and approved by the Board of Directors at their meeting held on November 27, 2006.

200612 Quarter 3

Notes:

EPS is Basic Tax Indicates Provision for Fringe Benefit Tax 1. Provision for tax / deferred tax liability has not been made till Sep 06 Balance provisiom would be made at the end of the year. 2. Figures for previous year have been regrouped / rearranged wherever necessary. 3. As the Company operates in a single primary business segment, disclosure requirements as per Accounting Standard 17 (AS-17) on segmental reporting are not applicable to the Company. 4.The Company had received Nil complaints from shareholders during the quarter and complaints at the starting of the quarter is Nil. 5.The Company has filed its prospectus for its FPO of Rs.24 crores with SEBI /BSE and is awaiting necessary clearences. 6.The Company was awarted the Top Exporter of the year for 2006 in the engineering plastic components by The Plastic Export Promotion Council. 7. The above results were taken on record and approved by the Board of Director at their meeting held on January 26, 2007.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005
Debt-Equity Ratio	1.39	1.13
Long Term Debt-Equity Ratio	0.79	0.71
Current Ratio	1.36	1.33
TURNOVER RATIOS
Fixed Assets	1.08	0.91
Inventory	10.76	10.09
Debtors	3.66	4.33
Interest Cover Ratio	2.69	2.06
Operating Profit Margin(%)	16.85	14.50
Profit Before Interest And Tax Margin(%)	10.05	6.09
Cash Profit Margin(%)	11.03	11.57
Adjusted Net Profit Margin(%)	4.23	3.17
Return On Capital Employed(%)	14.86	8.42

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject was incorporated on 13^th December, 1985 at Halol in Gujarat as a Public Limited Liability Company having Company Registration Number 8354.

The group was formed in 1987 to provide service excellence in plastic technologies.

Subject was set up at Halol by Mr. Mike Sanghvi, a Plastic Technologist with over 20 years of experience in the North American Plastic Industry.

Subject became closely held public limited liability company with effect from 07.04.1994.

BUSINESS

Subject is engaged in manufacturing and selling of Engineering Plastic Components and Mouldings.

Subject is a market leader in the field of injection moulded precision components and subassemblies.

The company has expanded its Injection Moulding Division in the form of a new plant at Rania. This division manufactures precision moulded plastic components, moulds and dies for various OEM requirements viz. electronics, electrical, automotive, horological, consumer electronics, telecommunications, etc.

Subject has 50:50 joint venture with a premier European Design House (Industrial Design Consultancy, UK) in the name of Shaily IDC (India) Private Limited.

Financial Performance

The gross turnover of the Company increased from Rs.332.302 millions to Rs.422.879 millions reflecting an increase of 27.26% in the current year. Exports have increased from Rs.43.734 millions in previous year to Rs.95.816 millions reflecting an increase of 119.09% in the current year.

The Company has taken several initiatives to address the challenging business environment and move ahead on the path of growth and profitability. On the operational front, continued efforts were taken by the Company to improve manufacturing procedure and financial management. Significant performance indicators, besides the top line growth, for the year are:

v Profit before depreciation, interest and taxed (PBDIT) as a percentage of total income has increased

v from 16.18% in previous year to 18.72 %.

v Profit before tax (PBT) as a % of total income has increased from 3.50 % in previous year to 7.02 %.

v Earning per share has improved from Rs.1.53 /share in the previous year to Rs. 3.047 share, (after

v deferred tax)

New Unit

The Company is setting up a new unit at its Rania complex. This unit would be an Export Oriented Unit (EOU)

and is expected to start commercial production in June 2006.

Current Year Outlook

Barring unforeseen circumstances, the Company expects to perform well during the current year.

Market Scenario

Subject operates in the quality conscious, industrial and precision segment of the engineering plastic moulding industry. It caters to a wide range of high growth industries like, switchgear components, auto components, medical equipment, electronics and domestic appliances, power tools and packaging of high-end consumer durables.

Engineering plastics are superior to other plastics due to better mechanical properties and heat resistance. They are primarily used in industrial applications requiring, structural performance at high temperatures, precise designs, safety and better insulation properties.

The increase in the Indian middle class population coupled with rising per capita disposable income, growing consumer appetite and awareness for consumption, can lead to a boom in the Plastic Industry.

Worldwide concern for fuel conservation, has led to use of more and more number of lightweight plastic components in the automobiles. With the entry of world car majors like General Motors, Hyundai, Honda etc in India, this trend is expected to follow in India. Further an awareness of depletion of natural resources like Jute, paper, wood etc. shall lead to more and more use of engineering plastics. The end user industries of engineering plastics have shown good growth in the past decade. Electronics, consumer durables, packaging for FMCG & pharmaceutical are other industries where similar trends are being observed and would be drives for the growth of plastic industries in India.

India s per capita consumption of plastic in 2002 was only 3.8 kg. As compared to the world average of 19.7 kgs.

Plastic is substituting metal, wood and glass in growing industries like Electrical, electronics, telecommunications,

which are the major end users of engineering plastics.

As per Plastindia Foundation (a non profitable foundation representing all segments of the plastics & petrochemicals industry), the India Plastics industry is expected to grow between 12%-15% p.a. in the years to come.

The potential for export of plastic companies from India is also quite huge. The advantage, which India offers, is

Low cost manufacturing base

High technical skills

Ability to understand and assimilate best manufacturing practices.

and is similar to the advantages in the IT sector. Outsourcing of manufacturing activities has just started and the potential for India is quite huge. Shaily is uniquely poised to take advantage of this opportunity. The advantages for subject are Experience of working with demanding customers for the past 8 years in the US.

Understanding of logistics requirements of overseas customers and having established a presence in the US

in addition to technical strength already available with Shaily.

Company Positioning and Strategy

Subject manufactures precision injection moulded plastic components, sub-assemblies, moulds and dies for various OEM customers. SEPL core strength is its technical competence and ability to provide total, innovative and cost effective solutions to its customers.

Subject has all the necessary facilities/infrastructure required to offer a whole spectrum of services to the customer under one roof.

v Product design

v Mould manufacture

v Mould design

v Component manufacture

Company’s fixed assets include Land/ Site Development (Freehold), Building, Plant and Machinery, Electrical Installation, tools and Equipments, Furniture and fixtures, Vehilces, Office Equipments, Computers, Software and Capita work in progress.

Website Details :

Subject had humble beginning in 1987. When Mr. Mike Sanghvi (A plastics technologist with over 20 Years of rich experience in demanding north American Plastics Industries) started Halol plant to provide service excellence in plastics Injection Molding. Mr. Laxman Sanghvi a Chartered Accountant and Lawyer continues to provide financial acumen to the company.

Mr. Hasmukh Shah is the Chairman of the company and hardly needs an introduction. Mr. Hasmukh Shah (Ex. Chairman & Managing Director of IPCL) has been the guiding spirit behind plastics age in India: and continues to provide direction to the Board of Shaily Engineering Plastics Limited.,

Subject’s corporate goal is to provide total plastics solutions incorporating principles of

v Product Design

v Mould Design

v Optimum Material Selection

v Mould Procurement

v Product Testing.

At subject they have been putting lots of emphasis on application development and have demonstrated cost effective solutions to their valued partners.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.41.29
UK Pound	1	Rs.82.30
Euro	1	Rs.56.20

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	7
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--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		54

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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