MIRA INFORM REPORT

Report Date :

16.05.2007

IDENTIFICATION DETAILS

Name :	JCT ELECTRONICS LIMITED
Registered Office :	A-32, Industrial Phase VIII, S.A.S. Nagar, Mohali, Chandigarh - 160 055, Punjab
Country:	India
Financial as on:	31.03.2006
Date of Incorporation :	31.08.1976
Com. Reg. No.:	16-3680
CIN No.: [Company Identification No.]	L32109PB1976PLC003680
TAN No.: [Tax Deduction & Collection Account No.]	PTLJ10378E / BRDJ00577D / DELJ04232E
Legal Form :	Public Limited liability company. The company’s shares are listed on the Stock Exchanges. Subject is a subsidiary of JCT Limited.
Line of Business :	Manufacturing of Colour Picture Tubes.

RATING & COMMENTS

MIRA’s Rating :

Ca

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	--
Status :	Moderate
Payment Behaviour :	Slow and Delayed
Litigation :	Clear
Comments :	Financial position is poor. Ways and means position is difficult. Payments are reported as slow and delayed. The company can be considered for any business dealings on safe and secured trade terms and conditions

LOCATIONS

Registered Office/Factory :	A-32, Industrial Phase VIII, S.A.S. Nagar, Mohali, Chandigarh - 160 055, Punjab, India
Tel. No.:	91-172-2222185/2221280/2670193
Fax No.:	91-172-2670297
E-Mail :	info@ndl.jctel.com mktg@ndl.jctel.com comm@ndl.jctel.com
Website :	http://www.jctel.com
Head Office :	Thapar House, 124 Janpath, New Delhi-110001, India
Tel. No.:	91-11-28626996 /2334 5566
Fax No.:	91-11-268662548 /2336 7861
Factory :	NH-8, Village Kandhari, Taluka Karzan, Vadodara, Gujarat Tel No. :- 91-2666-232881/232883/232884/232885 Fax No :- 91-2666-232882/232889

DIRECTORS

Name :	Mr. M. M.Thapar
Designation :	Chairman
Name :	Mr. Arjun Thapar
Designation :	Managing Director
Age :	41 years
Qualification :	Graduate in Textile Management & Marketing
Experience :	18 years
Date of Joining :	19.08.1985
Previous Employment :	Philadelphia - USA
Name :	Mr. K. Jayabharath Reddy
Designation :	Director
Name :	Mr. P.K. Ganguly
Designation :	Director
Name :	Mr. S. Ananthakrishnan
Designation :	Director - Nominee IDBI
Name :	Mr. L. N. Mishra
Designation :	Director - Nominee IFCI
Name :	Mr. P.K. Anand
Designation :	Director - Nominee Allahabad Bank

KEY EXECUTIVES

Name :	Mr. Raj Kapur
Designation :	Chief Operating Officer
Name	Mr. Gopal Krishnan
Designation	Company Secretary & Chief Internal Auditor
Age	49 years
Qualification	M. Com., FCS
Experience	25 years
Date of Joining	01.10.1987
Previous Employment	JCT Fibres Limited

MAJOR SHAREHOLDERS

Names of Shareholders	Percentage of Holding
Promoters and Group Companies	33.88
Collaborator/NRIs/OCBs/Flls	16.56
Fin. Inst./Ins.Company's/Mutual Funds/Banks	5.05
Public	44.51
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturing of Colour Picture Tubes.
Products :	Item Code No. (ITC Code) : 85.40 Product Description : Cathode Ray Tubes
Exports to :	Europe and Asian Region including Egypt, Pakistan, Hong Kong, Iran, Italy, Slovenia, South Africa and Turkey
Imports from :	Japan, Korea, Malaysia, Singapore and South America

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Colour picture tubes	Nos.	4600000	1541248

GENERAL INFORMATION

Suppliers	Affy India Limited Avasrala Automation Private Limited Ajit Rubber Milts A.R. Engineers A - One Line Udyog Jain & Bros B. S & Company Grown Packages Private Limited Delstar Private Limited Daljeet Industries Elite Enterprises Future innovation Private Limited Gilard Electronics Private Limited H. P. Enterprises Indian Polymer Industries Insta Pack Private Limited Jamwal Engineer Kulwant Mechanical Works Kirloskar AAF Limited Macchar Polymers Private Limited Micro Precision Industries Micro Techniques Micro Semiconductors (India) Private Limited Nanra Industries Works Pratish Industries Pal Industries Param Polypack Private Limited Precision Engineers Rajdhani Timer Products Super Enterprises S. R. Mechanical Works Sunny Industries SidhTimber Supercine & Instrumentation Company Sark Industries Surat Amonia Supply Company The New Timer Store Thermo Pack Industries Windsor Packaging Private Limited Wire Forming Industry Wonder Craft Packaging Private Limited Winner Nippon Electric Limited
No. of Employees :	3250
Bankers :	Ø Allahabad Bank Ø Bank of Baroda Ø Bank of Nova Scotia Ø Citibank N.A. Ø Hongkong & Shanghai Banking Corporation Ø Indian Overseas Bank Ø Oman International Bank Limited S.A.O.G. Ø Punjab National Bank Ø Punjab & Sind Bank Ø SBI Commercial & International Bank Limited Ø Standard Chartered Bank Ø State Bank of India Ø State Bank of Patiala Ø The Bank of Tokyo - Mitsubishi UFJ Limited Ø Mizuho Corporation Bank Limited Ø Siam Commercial Bank p.l.c. Ø UCO Bank
Facilities :	SECURED LOANS Term Loans : Financial Institutions Rs. 1684.249 millions Banks Rs. 148.399 millions Working Capital facilities from Banks Rs. 2374.879 millions Interest accrued and due on secured loan Rs. 4788.872 millions UNSECURED LOANS Bank Rs. 133.742 millions Others Rs. 175.429 millions Inter Corporate Deposits Rs. 8.063 millions Interest accrued and due Rs. 168.482 millions

Banking Relations :	Unknown
Auditors :	V. Sahai & Company Chartered Accountants New Delhi, India
Associates :	Chohal Investments Limited Poly Investments Limited Rajdhani Trading Company Private Limited Kidarnath Kishanchand Finance & Investments Limited West European Exporting Limited (UK) JCT (International) Pte. Limited APJ Financial Services Private Limited India International Airways Limited Team Plus Securities Limited
Parent Company :	JCT Limited
Memberships :	Confederation of Indian Industry

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
110000000	Equity Shares	Rs. 10/- each	Rs. 1100.000 millions
4000000	Preference Shares	Rs. 100/- each	Rs. 400.000 millions
	Total		Rs. 1500.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
34552693	Equity Shares	Rs. 10/- each	Rs. 345.527 millions
Less:	Allotment Money in arrears		Rs. 0.172 million
	Total		Rs. 345.355 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		345.355	345.355	345.355
2] Share Application Money		391.000	391.000	391.000
3] Reserves & Surplus		258.129	258.129	258.129
4] (Accumulated Losses)		[8390.415]	(6405.428)	(4765.269)
NETWORTH		[7395.931]	(5410.944)	(3770.785)
LOAN FUNDS
1] Secured Loans		9346.399	8192.549	7144.063
2] Unsecured Loans		494.716	455.051	335.062
TOTAL BORROWING		9841.115	8647.600	7479.125
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		2445.184	3236.656	3708.340
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		4001.370	4318.322	4576.909
Capital work-in-progress		34.746	22.609	136.379
INVESTMENT		15.729	18.182	20.384
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	492.242	589.955	508.139
	Sundry Debtors	348.160	240.071	273.057
	Cash & Bank Balances	222.820	202.542	93.782
	Loans & Advances	163.089	180.828	175.277
Total Current Assets		1226.311	1213.396	1050.255
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2814.266	2318.320	2054.296
	Provisions	18.706	17.533	21.291
Total Current Liabilities		2832.972	2335.853	2075.587
Net Current Assets		[1606.661]	(1122.457)	(1025.332)
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		2445.184	3236.656	3708.340

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover	2799.832	3489.730	3502.790
Other Income	48.428	74.073	0.000
Increase / [Decrease] in stocks	[88.281]	91.605	0.000
Total Income	2759.979	3655.408	3502.790
Profit/(Loss) Before Tax	[1982.208]	(1640.159)	(1519.812)
Provision for Taxation	2.779	0.000	0.000
Profit/(Loss) After Tax	[1984.987]	(1640.159)	(1519.812)
Export Value	245.346	862.589	413.400
Import Value	501.283	577.510	550.926
Expenditures :
Manufacturing Expenses	2299.499	2885.685
Excise Duty	354.292	399.272	5014.612
Payment to and provision for employees	214.899	166.615
Administrative & other expenses	86.116	93.500
Selling & distribution expenses	59.613	87.236
Interest & financing charges	1303.828	1237.924
Total Expenditure	4318.247	4870.232	5014.612

SUMMARISED RESULTS

PARTICULARS	31.03.2007 Full Year
Sales Turnover	2902.400
Other Income	58.100
Total Income	2960.500
Total Expenditure	3199.000
Operating Profit	[238.500]
Interest	1060.800
Gross Profit	[1299.300]
Depreciation	428.600
Tax	2.600
Reported PAT	[1730.500]

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	0.00	0.00	0.00
Long Term Debt-Equity Ratio	0.00	0.00	0.00
Current Ratio	0.23	0.23	0.22
TURNOVER RATIOS
Fixed Assets	0.39	0.50	0.51
Inventory	5.17	6.36	6.77
Debtors	9.52	13.60	13.53
Interest Cover Ratio	[0.52]	[0.32]	[0.34]
Operating Profit Margin(%)	[9.12]	0.47	0.64
Profit Before Interest And Tax Margin(%)	[24.23]	[11.53]	[10.91]
Cash Profit Margin(%)	[55.79]	[35.01]	[31.77]
Adjusted Net Profit Margin(%)	[70.90]	[47.00]	[43.33]
Return On Capital Employed(%)	0.00	0.00	0.00
Return On Net Worth(%)	0.00	0.00	0.00

STOCK PRICES

Face Value	Rs. 10/-
High	Rs. 3.92/-
Low	Rs. 3.81/-

LOCAL AGENCY FURTHER INFORMATION

JCT Electronics (JEL) incorporated in August, 1976, formerly known as Punjab Display Devices (PDDL) and a member of the Thapar group, was promoted by the Punjab State Industrial Development Corporation (PSIDC) in 1976 as a 100% subsidiary to manufacture black and white TV tubes, cathode ray tubes and information display systems. In 1985, Jagatjit Cotton Textile Mills (JCT) joined as co-promoters. JEL became a subsidiary of JCT with effect from 30 Apr.'86. The company has a technical-cum-financial collaboration with Hitachi, Japan. It is having manufacturing facilities in Mohali (Punjab) and Vadodara (Gujarat). 

The company manufactures black and white TV tubes since 1976, at Mohali, Punjab. JEL also assembles mechanical watches for HMT. JEL set up a project to manufacture colour TV picture tubes of various sizes (cap. : 0.5 millions pa), at Mohali. The plant was commissioned in January, 1987.  

JEL was awarded the ISO 9002 certification by BSI (UK) and STQC for its colour picture tubes unit in 1994. The company set up a new plant to manufacture colour picture tubes (cap. : 1 mln pa) under its expansion programme. The plant was commissioned in 1996.

Operations: 

The Colour Picture Tube (CPT) industry witnessed a positive growth during the year. The production for the year ended 31st March, 2006 was 1.54 million CPTs as against 1.62 million CPTs in the previous year. Sales at 1.58 million CPTs was higher than 1.57 million CPTs in the year before. However, on account of decline in the selling prices, the sales turnover was lower despite higher volumes. During the year, the company revived production of 14' CPTs to broaden its product range by installing a new line at Vadodara. The company also successfully completed trials for the 21' pure flat tubes, besides taking up work on the 21' slim and 15' pure flat tubes. Increased competition and aggressive pricing by the CTV industry, put pressure on the margins resulting in a loss for the year. Your company has obtained the ISO-14000 Certification. 

Outlook & Plans: 

The domestic CPT industry has grown to a size of over 10 million units. Continuous efforts at improving productivity and reducing costs/overheads have helped in sustaining contributions. The company has plans to take up commercial production of the 15' pure flat tubes by the last quarter of this financial year besides the 21' pure flat tubes. With various CPT plants in high cost economies closing down, the global sourcing of CPTs is likely to be mainly from India & China in the years to come. The company has a fairly wide customer base globally. Exports continued to be regular and the company qualified for the target plus scheme due to substantial increase in exports in earlier years 

Finances: 

The reference made by the company to BIFR under the provisions of Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) was considered and the company has been declared sick. The Hon'ble Board has appointed IFCI as the operating agency to finalize a rehabilitation package for revival of the company. 

A draft rehabilitation scheme has been finalized with the lenders seeking various concessions and the same have been referred to BIFR. The banks and financial institutions have been approached to consider reduction in interest rates in view of the competition being faced by the industry. The banks have also been requested for additional non fund working capital limits. 

MANAGEMENT DISCUSSION AND ANALYSIS: 

Industry scenario: 

The CPT industry witnessed positive growth during the year. Realizations during the year had drastically come down on account of the aggressive & competitive pricing by the CTV manufacturers as also free trade agreements coming into effect. Opportunities for growth continue to look bright with the present low household penetration levels and boom witnessed in the electronic media. Major sports events during the current year are expected to propell the growth further. With some capacities in the mid/small size segment closing down or being vacated in Europe, overseas demand has seen an upswing. Prices have also started firming up with the weakening of the rupee and increase in demand. 

Despite availability of plasma and LCD flat panels in the world market, the demand for cathode ray tubes continues to remain stable. High cost, perceived shorter life cycle and large screen sizes have restricted the growth in the plasma segment. The cathode ray tubes, continue to witness growth in the developing and semi developed markets of the world. The CRT, Plasma and LCDs will all co-exist but at different price points. 

Company's performance: 

Sales nos. for the year ended March 2006 were marginally higher than the previous year. Production at the Vadodara unit has been increased with the commissioning of a new line, taking the installed capacity to 3 million CPTs per annum. With enhanced capacity available, sales volumes during the current financial year will substantially improve. To broaden its product line, the company has successfully completed trials on the 21' slim and 15'/21' pure flat tubes. Commercial production is expected to be taken up soon in the current financial year based on market demand. - The company has plans to offer products with high growth potential as also broaden the customer base. 

In view of the increasing power & fuel costs; the company had installed a captive power plant for its power requirements and reduce its dependence on the State Electricity Board. With gas being made available shortly, we will be able to further reduce our power and fuel costs. The company is fully geared up to meet the challenges faced by the industry. Efforts are on to continuously improve productivity and reduce input costs to maintain the earning levels. Lot of emphasis and effort has been laid on upgrading the skills of the work force to meet the quality standards, improve productivity and inculcate the sense of team work. 

The company has in place adequate internal control systems and procedures to ensure optimum utilisation of resources, compliance with statutory regulations and continuously improve performance. 

Contingent Liabilities :

Claims against the company not acknowledged as debts : Rs. 32.751 millions

EXCHANGE FLUCTUATION :

Exchange differences arising on foreign currency transactions relating to revenue items has been recognized as income or expense in the period in which they arise. During the current year, there was a loss of Rs. 1.480 millions (Previous year gain of Rs. 7.035 millions) which has been adjusted under appropriate heads to which the transactions relate.

A restructuring package was approved by financial institutions, lead bank arid by some members of the consortium of, banks. However, approval of all the banks in the consortium could not be obtained and working capital facilities were not released and consequently the package was not fully implemented. In the meanwhile, the financial institutions and the lead bank revoked the restructuring package and subsequently a fresh restructuring proposal was submitted to the lenders and the same is being favourably considered.

Pursuant to the company being declared sick by Hoh'ble B1FR, a rehabilitation scheme has been submitted by the operating agency i.e. IFCI to the Hon'ble BIFR which is under its consideration. Pending approval of the scheme, the company as in the previous year, has provided for interest on loans from financial institutions and banks as per the earlier restructuring package which was revoked.

If the interest liability had been reflected at contracted rates and not on the basis of the earlier restructuring package, the management has estimated that:

(i) the cumulative losses (including Rs. 1271.995 millions for the current year) would have been higher by Rs.

5165.128 millions,

(ii) the loan liability would have been higher by Rs. 5165.128 millions

Its product range includes :-

v 21” CPT (F and FST)

v 20” CPT

v 14” CPT

The company imports panel, funnel, flat shadow mask, electron gun, electron phosphor, fruit and chemicals

The company has technical collaboration with Hitachi Limited, Japan.

The company has been accredited with ISO 9002 Certification.

Fixed Assets :

Ø Leasehold land

Ø Freehold land

Ø Buildings

Ø Plant & machinery

Ø Electrical installation

Ø Storage & water system

Ø Office equipment

Ø Factory equipment

Ø Furniture & fittings

Ø Vehicle 4 cycles

WEBSITE DETAILS

Subject is a flagship company of the Thapar Group, one of India's largest Industrial Conglomerates. Founded in the 1920's, the Thapar Group with 54 companies and 84 manufacturing plants is growing at the rate of more than 15% each year and has a Group turnover of more than US $2.0 billion.

Subject was the first Colour Picture Tube (CPT) manufacturer in India. Subject, formerly known as Punjab Display Devices Limited (PDDL), was set-up as a wholly owned subsidiary of Punjab State Industrial Development Corporation (PSIDC) in 1976, to manufacture Black & White Picture Tubes, Cathode Ray Tubes, Gas filled Discharge Tubes and Fluorescent Display Tubes at Mohali, Punjab, India.

PDDL was taken over in 1986 by JCT Limited, a flagship Thapar Group Company, as a diversification project to manufacture CPTs and therefore renamed as JCTEL. JCTEL thereafter setup a modern plant for manufacture of CPTs in technical collaboration with Hitachi, Japan, one of the pioneers in the Display Devices. Initially the plant had a capacity of 0.6 Million CPTs, which is now rated at 1.0 Mil PA.

In 1996, JCTEL went in for an expansion and set-up a new Greenfield plant near Vadodara, in Western India. Engineered in-house with Hitachi's assistance, to manufacture 1 Million (presently at 1.8 Million) CPTs PA of sizes 14", 20" and 21". Propose to introduce 21" Pure Flat very shortly.

JCTEL has two plants, one at Mohali (near Chandigarh) in Northen India and the other at Karjan (near Baroda) in Western India with a combined capacity to manufacture 2 million CPT's.

Mohali (near Chandigarh)

This plant at has a capacity of 1.2 million CPT's per annum and produces 20" Conventional CPT's only. It has been setup in technical collaboration with Hitachi in 1986.

Karjan (near Baroda)

This plant is one of most modern CPT plants in the world today. It is a technological landmark, is equipped with highly sophisticated machines which include over 50 robots and power free conveyor systems of nearly 4 km in lenght.

It commenced production in 1996 and has a capacity of 1.8 million CPT's. The plant manufactures 14", 20" conventional and 21" F & FST CPT's. It has the flexibility to produce 21" FST CPT's also.

Team Management :

In the past few years their country has witnessed an economic crisis that has separated the strong organizations from the weak. Companies that have survived, have done so as a result of their constant strive for perfection through their Human Resource. They have always believed that a successful manager in the new milieu must be first and foremost a skilled manager of teams, understanding the strengths and weaknesses of his people and turning a group of individuals into a team.

Everyone is different and “Team Management” means motivating a workforce to reach a common goal. Key points in a team management that are most often hypothesized to influence a team's performance are:

• Developing the team and creating team spirit.

• Understanding individual characteristics and intra-team processes.

• Identifying what support is needed and what to communicate.

• Effective Communication between individual, teams and management.

• Establishing KRA's and constant monitoring.

• Regular training/Workshops to sharpen the skills.

• Encourage teams to utilise creative problem-solving (CPS) techniques like brainstorming.

Being a market leader in their own right they have concluded that the secret of success is to work as a team, which means that everybody, every team, every platform, every division, every component is there not for individual competitive profit or recognition, but for contribution to the team as a whole on a win-win basis.

CMT REPORT [Corruption, Money laundering & Terrorism]

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

1] INFORMATION ON DESIGNATED PARTY

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

2] Court Declaration :

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

3] Asset Declaration :

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

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

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

Charges or investigation registered against subject: None

7] Criminal Records

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

8] Affiliation with Government :

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

9] Compensation Package :

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

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

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

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

CONTRAVENTION

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 40.90
UK Pound	1	Rs. 80.78
Euro	1	Rs. 55.18

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	--
--LIQUIDITY	1~10	--
--LEVERAGE	1~10	4
--RESERVES	1~10	--
--CREDIT LINES	1~10	5
--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	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		24

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		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