MIRA INFORM REPORT

Report Date :

18.08.2008

IDENTIFICATION DETAILS

Name :	FOSECO INDIA LIMITED
Registered Office :	Gat No 922 and 923, Sanaswadi, Pune – 411 019, Maharashtra
Country :	India
Financials (as on) :	31.12.2007
Date of Incorporation :	22.03.1958
Com. Reg. No.:	011052
CIN No.: [Company Identification No.]	L24294MH1958PLC011052
TAN No.: [Tax Deduction & Collection Account No.]	PNEF00285F
Legal Form :	Public limited liability company. Company’s shares are listed on the Stock Exchange.
Line of Business :	Manufacturer, Importer and Exporter of Fine Chemicals and other Chemical Products.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 2300000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. Available information indicates high financial responsibility of the company. Trade relations are fair. General financial position is good. Payments are always correct and as per commitments. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a medium to long-run.

LOCATIONS

Registered Office :	Gat Nos 922 and 923, Sanaswadi, Taluka – Shirur, Pune – 412 208, Maharashtra, India
Tel. No.:	91-2137-668100 / 252940/41/44/45
Fax No.:	91-2137-252970/252942 / 568160
E-Mail :	foseco@vsnl.com
Website :	http://www.foseco.com
Factory :	Located at · Sanswadi, Pune, Maharashtra, India · Pondicherry
Regional Sales Offices :	Located at · Sanswadi, Pune, Maharashtra, India · New Delhi, India · Kolkata, West Bengal, India · Chennai, Tamilnadu, India
Overseas Branches :	Located at · Asean · Europe · Australia · China · East Asia · North America · South America

DIRECTORS

Name :	Mr. R. A. Savoor
Designation :	Chairman
Name :	Mr. D G Hussey
Designation :	Vice Chairman
Name :	Mr. S Mathur
Designation :	Managing Director
Name :	Mr. D O Hughes
Designation :	Director
Name :	Mr. D P Mehta
Designation :	Director
Name :	Mr. P N Ghatalia
Designation :	Director

KEY EXECUTIVES

Name :	Mr. R. Balakrishnan
Designation :	Company Secretary
Name :	Mr. S. Banerjee
Designation :	Head – Sales, Marketing and Technology

BUSINESS DETAILS

Line of Business :

Manufacturer, Importer and Exporter of Fine Chemicals and other Chemical Products.

Products :

ITC Code	Product Description
28 and 29	Additives and consumables used un metallurgical industry for foundry and steel.

· Filters

· Ferrous/Non-Ferrous Metal Treatment

· Inoculants and Fluxes

· Sand Binders

· Metal Transfer

· Coatings

· Moulding Materials

PRODUCTION STATUS

Particulars	Unit	31.03.2007
Licensed	Tonnes	42274
Installed	Tonnes	24080
Actual Production
Own Production	Tonnes	21769
Outside Production	Tonnes	147

GENERAL INFORMATION

Bankers :

· Standard Chartered Bank

· Syndicate Bank

· ICICI Bank Limited

· IDBI Bank Limited

Facilities :

Unsecured Loans	31.12.2007 (Rs. In Millions)
Sales Tax Deferral Loan	110.805
Creditors for Leases	2.073
Total	112.878

Banking Relations :	Good
Auditors :
Name :	· S R Batliboi and Associates Chartered Accountants · Sharp and Tannan Chartered Accountants
Solicitors :	· Crawford Bayley and Company · Sandersons and Morgans
Associates :	· Burmah Castrol Trading Limited · Foseco Foundry International · Foseco Pty Limited, Australia · Foseco Industrial e Commercial Ltda (Brazil) · Foseco France S.A. · Foseco GmbH, Germany · Foseco s.r.l., Italia · Foseco Poland · Foseco Espanola, S. A., Spain · Foseco (FS) Limited, U.K. · Foseco Turnkey · Foseco Czech · Foseco Steel · AFS – American Foundryman’s Society · AMC – American Metalcasting · Association Technique de Fonderie · Belgian Foundry Association · Brazilian Foundry Associaiton · Institute of British Foundrymen CAEF – European Foundry Associaiton · Canadian Foundry Association · China Foundry Association · Centre Technique Des Industries de la Fonderie · Consortium Australian Die Casting Association · Danish Foundry Association · Ductile Iron Society · Dutch Metals Association · Finnish Foundry Association · German Foundry Association · Italian Ferrous Foundry Association · Italian Non Ferrous Foundry Association · North American Die Casting Association (NADCA) · Norwegian Foundry Association · South African Institute of Foundrymen · Spanish Foundry Association · Steel Founders Society of America · Swedish Foundry Association · Swiss Foundry Association · Association – Zinc Fonderie · Metal Castione · Institute of Materials · Spanish Material Association · Italian Institute for Foreign Trade · International Metalworkers Federation · Associazione Nazionale fra Industrie Automobilische (ANFIA) · MIRA – Motor Industry Research Association · CEIR – European Committee for the Valve Industry · French Valve Industry Association · German Valve Industry Association · Italian Valve Industry Association · Dutch Valve Industry Association · British Pump Manufacturer’s Association · British Valve and Actuator Manufacturer’s Association Institution of Mining and Mineral.
Subsidiaries :	· Foseco International Limited, UK · Foseco International Limited, (Middle East Branch) · Foseco (Foundry Services) Pte Limited, Singapore · Foseco Foundry (China) Company Limited · Foseco Japan Limited · Foseco Metallurgical Inc., USA · Foseco Philippines Inc. · Foseco GmbH, Germany · Foseco South Africa (Pty) Limited · Foseco S.A.S., France · Foseco Pty Limited, UK · Foseco (FS) Limited, UK · Foseco Netherlands B.V. · Foundry Traders International Limited, China · Foseco (Thailand) Limited · Foseco Golden Gate Company Limited, Taiwan · P T Foseco Indonesia · Foseco Steel (UK) Limited, UK
Group Companies :	· Foseco Jersey Limited, Jersey – Ultimate Holding Company · Foseco Holdings Limited, UK - Intermediate Holding Company · Foseco (UK) Limited, Uk – Intermediate Holding Company · Foseco Overseas Limited, UK - Intermediate Holding Company
Holding Company :	Foseco Overseas Limited, UK

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
7500000	Equity Shares	Rs.10/- each	Rs.75.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
6386459	Equity Shares	Rs.10/- each	Rs.63.865 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2007	31.12.2006
SHAREHOLDERS FUNDS
1] Share Capital		63.865	63.865
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		388.091	317.142
4] (Accumulated Losses)		0.000	0.000
NETWORTH		451.956	381.007
LOAN FUNDS
1] Secured Loans		0.000	0.000
2] Unsecured Loans		112.878	115.049
TOTAL BORROWING		112.878	115.049
DEFERRED TAX LIABILITIES		0.000	0.000
TOTAL		564.834	496.056
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		148.915	141.193
Capital work-in-progress		51.990	17.620
INVESTMENT		0.848	0.863
DEFERREX TAX ASSETS		5.087	2.754
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	85.883	72.891
	Sundry Debtors	381.866	327.950
	Cash & Bank Balances	119.597	125.025
	Other Current Assets	0.233	0.234
	Loans & Advances	47.174	57.604
Total Current Assets		634.753	583.704
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	213.669	198.249
	Provisions	63.090	51.829
Total Current Liabilities		276.759	250.078
Net Current Assets		357.994	333.626
MISCELLANEOUS EXPENSES		0.000	0.000
TOTAL		564.834	496.056

PROFIT & LOSS ACCOUNT

PARTICULARS		31.12.2007	31.12.2006
Sales Turnover		1515.829	1276.511
Service Income		1.076	1.517
Other Income		26.002	19.629
Total Income		1542.907	1297.657
Profit/(Loss) Before Tax		316.901	257.048
Provision for Taxation		117.249	94.236
Profit/(Loss) After Tax		199.652	162.812
Earnings in Foreign Currency :
	FOB value of exports	52.714	55.282
	Commission Earnings	11.911	5.046
Total Earnings		64.625	60.328
Imports :
	Raw Materials	181.152	165.567
	Capital Goods	8.686	3.475
Total Imports		189.838	169.042
Expenditures :
	Manufacturing Expenses	897.335	753.750
	Personnel Expenses	96.255	79.839
	Operating and Other Expenses	202.733	183.071
	Financial Expenses	3.204	2.274
	Depreciation & Amortization	26.479	21.675
Total Expenditure		1226.006	1040.609

QUARTERLY RESULTS

	31.03.2008	30.06.2008
	1st Quarter	2nd Quarter
Sales Turnover	374.600	386.400
Other Income	15.700	5.000
Total Income	390.300	391.400
Total Expenditure	307.200	315.300
Operating Profit	83.100	76.100
Interest	0.200	0.600
Gross Profit	82.900	75.500
Depreciation	6.500	7.000
Tax	27.700	24.300
Reported PAT	48.700	44.200

KEY RATIOS

PARTICULARS	31.12.2007	31.12.2006
Debt-Equity Ratio	0.27	0.29
Long Term Debt-Equity Ratio	0.27	0.29
Current Ratio	1.64	2.07
TURNOVER RATIOS
Fixed Assets	5.64	5.11
Inventory	22.01	20.43
Debtors	4.92	5.09
Interest Cover Ratio	100.03	112.74
Operating Profit Margin(%)	19.84	19.12
Profit Before Interest And Tax Margin(%)	18.32	17.64
Cash Profit Margin(%)	12.95	12.55
Adjusted Net Profit Margin(%)	11.43	11.07
Return On Capital Employed(%)	60.34	49.58
Return On Net Worth(%)	47.95	40.22

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject India, a JV company between Greaves of India and Foseco of UK was incorporated in March 22, 1958 as Greaves Foseco. The technical collaborator Foseco UK holds 66.5%(as on March 31, 2003) stake in the company. 

Subject is the supplier of metallurgical chemicals for the ferrous and non-ferrous foundry industry. The company's products are sold both directly and indirectly to industries like Passenger Cars and SUVs, Commercial Vehicles, Agricultural Machinery, Construction and general purpose steel, Textile machinery, two and Three wheelers. It's products also found usage in Steel, Petrochemical and food industry valves and pumps.  

Subject India has two manufacturing facilities one located at Pune and the other one located at Metaupalayam, Pondicherry. 

It manufactures 400 different products for the metallurgical industry. The products are in the nature of additives and consumables and improve the physical properties and surface qualities of castings as well as reduce costs of melting, moulding and castings.  

The company's market covers integrated steel plants like SAIL and TISCO, mini mills like Mukand, Kalyani and Musco; and foundries like Ennore Foundries, Lakshmi Machine Works, etc. The company exports its products mainly to Middle East, Far East, Sri Lanka, Nepal, Kenya, Ghana, Bangladesh, Singapore and Taiwan. 

The company offered shares in Nov.'93 to get listed in the stock exchange.  

Subject has ceased all manufacturing and trading activities at Chinchwad from 28th Dec.'99. During 1999-2000, the company has completed the largest project of Navodaya business transformation programme whose charges incurred was Rs.29.500 millions along with the final closure of the Chinchwad manufacturing site foundry division.  
 During March 2000 Burmah Castrol plc was acquired by BP Amoco Plc and in accordance with SEBI Takecover code BP Amoco plc via Burmah Castrol plc a subsidiary company,made a open offer to the public and has acquired 1277292 shares of the company.

In the year 2002, the Company has increased its installed capacity of Metallurgical Chemicals by 570 Tonnes(Tonnes per annum based on 2 Shifts). With this Capacity Expansion, the total installed capacity of Metallurgical Chemicals has increased upto 24830 Tonnes.

INTRODUCTION

Subject is a world leader in the supply of consumable products for use in the foundry and steel making industries. Typically, Subject’s products represent a small element of the overall cost of the foundry and steel making processes yet they are key to the overall quality and yield. The Group has a highly trained sales and service network in 32 countries across the world and operates 29 production facilities in 17 countries, which provides a key competitive advantage.

PERFORMANCE REVIEW

Following a record performance in 2006, the company achieved a new record in 2007 with gross turnover increasing 22% to Rs. 1746.200 millons. Profit before tax is Rs. 316.900 millions whilst net profit after tax is Rs. 199.700 millions. To support planned growth in the business, capital investment of Rs. 110 millions is planned in capacity expansion, of which Rs. 45.000 millions was spent in 2007 with the balance to be invested during 2008. 

Members are requested to refer to the Management Discussion and Analysis Report annexed to this report for a more detailed review of operating performance. 

DIVIDEND AND APPROPRIATIONS: 

An amount of Rs. 1.997 millions has been credited to General Reserves. 

The directors have recommended a final dividend payment of 70% on equity capital for the year ended 31st December 2007, which, if approved by the members at the forthcoming annual general meeting, will be paid out of the current year's profit to: 

· those equity shareholders whose names appear in the register of members on 11 April 2008, and 

· to those whose names as beneficial owners are furnished by National Securities Depository Limited and Central Depository Services (India) Limited. 

The directors have declared interim dividends of 20%, 50% and 30% on the equity capital of the company in April, July and October 2007 respectively which has been paid to registered holders of equity shares. The total of the interim and proposed final dividends is 170%. 

MANAGEMENT DISCUSSION AND ANALYSIS: 

Subject (also referred to subsequently as "the company") is a part of the global Foseco group. Subject, an acronym for "Foundry Services Company" was established in 1932 and has since developed into a world leader in supplying consumables and services to the foundry and steel industries in over 40 countries. In India, Subject commenced operations in 1958 through a joint venture with the Greaves Cotton group and in 1995 with the joint venture partner exiting the business, the erstwhile Greaves Foseco Limited became Foseco India Limited. 

Subject focuses on the foundry sector. Foundries form the heart of any manufacturing based economy and the manufacturing sector is fast emerging as a key component of the Indian economy. Advance estimates from the Central Statistical Organisation (CSO) suggest that India continues its high growth path with GDP growing by 8.7% in 2007-08 following a 9.6% growth in 2006-07. Growth in manufacturing is lower at 9.4 per cent in 2007-08 as against 12% in 2006-07

The continued growth in manufacturing throws up several opportunities and challenges for companies operating in the foundry sector. Subject continues to partner foundries in helping them leverage the opportunities of servicing growing demand by overcoming the constant challenge of improving quality and productivity. The processes in each foundry have unique characteristics, so customers need to be provided specific customised solutions. Consequently, Subject has adopted a "partnership" model with customers, which is founded on Company's three core areas of strength: 

Product technology:  

Its global proprietary consumable product technology. 

Application Expertise:  

Its in-depth knowledge of its customer's operations and the application of its products across a wide range of foundry processes. 

Customer Relationships:  

Its conviction that customer partnerships, where expertise and knowledge are shared, result in the greatest performance improvements for its customers. 

The company partners with its customers to deliver measurable improvements to the performance of its customer's production processes. Subject is committed to the belief that only by creating maximum value for the customer, can a fair share of that value be retained by Subject as profits. This company ethos of pursuing a path of profitable long-term growth is reflected in the financial results for 2007, the highlights of which are: 

· Net sales (including other income) increased by 19 per cent from Rs.1297.600 millions in 2006 to Rs.1542.900 millions in 2007. 

· Earnings before depreciation, interest and tax (EBDIT) increased by 23.34% from Rs.280.900 millions in 2006 to Rs.346.600 millions in 2007. 

· Profit after tax (PAT) increased by 22.63% from Rs.162.800 millions in 2006 to Rs.199.600 millions in 2007. 

· Return on net worth (RONW) increased from 42.7% in 2006 to 44.2% in 2007. 

· Earnings per share (EPS) increased by 22.64% from Rs.25.49 in 2006 to Rs.31.26 in 2007. 

In the following sections the company's markets, operations and financial performance will be reviewed in greater detail. 

Markets: 

The business is concentrated on the Indian foundry sector. Foundries typically produce castings that go into different enduser segments. These segments can be broadly classified into automotive, construction, heavy machinery, general engineering and mining. There are more than 5,000 foundry units in India, having an installed capacity of approximately 7.5 million tonnes per annum, the majority of which (nearly 95%) fall under the small-scale industry category. 

In terms of production, the Indian foundry industry is the sixth largest in the world after the USA, China, Japan, Russia and Germany, whilst in terms of the number of people employed and production units, India is the second largest player in the foundry industry after China. The industry growth, in terms of overall casting tonnages, slowed down from double digit rate in 2006 to 9 percent in 2007 due to ups and downs in various subsectors. 

During 2007 (January-December) the domestic automotive segment remained flat in terms of units produced. On one hand production of passenger vehicles grew by 16.6 percent and commercial vehicles by 10.9 percent, while production of three wheelers and two wheelers fell by 1.1 percent and 3.6 percent respectively. Overall casting growth in automotive sector is estimated to have dropped to 5% and flattened in machine tools. On the other hand, construction, mining and export of steel valves continued to do well. 

Subject, with its portfolio of over 400 products and a market share of over 25%, is well positioned to cater to the growing demands of the foundry industry in India. 

Operations: 

Supply Chain: 

Subject has two manufacturing plants located in Sanaswadi near Pune, and Puducherry. The company's manufacturing product portfolio of over 400 complex products comprises resins, coatings, feeding systems, ferrous and non-ferrous metal treatment products and greensand additives. Foseco's sale of manufactured goods increased by 10.9% from 19,655 MT in 2006 to 21,792 MT in 2007. 

With 181 employees, Subject follows best-in-class lean manufacturing practices. The company operates through well-established cellular manufacturing facilities. Each cell team has end-to-end responsibility for the entire manufacturing process - from purchase of raw materials, manufacturing, and quality assurance to final distribution. The benefits of the cellular manufacturing approach are that the entire cell team takes responsibility for quality and customer service. 

Total quality management (TQM) techniques have been progressively introduced to further strengthen the quality assurance process and include 5S, Kaizen and visual management. 

The company's quality and environmental management systems are accredited to the international ISO9001: 2000 and ISO14001: 2004 systems respectively. 

Outlook: 

Subject believes that the Indian economy is now on a sustained higher growth trajectory, which will open up several opportunities. The company believes that its products, knowledge base, people and processes are aligned with the future needs of its customers and is optimistic of continued growth in the next few years. Whilst the company will pursue growth, it will stand by its philosophy of growing only by generating profits and higher value creation. As always in an environment where customers are growing through investing in capacity and working capital, the quality of Subject 's receivables will continue to be an area of focus. 

milestones

1932

First Foundry Practice journal published

1933

Hexachloroethane tablets for removing undesirable gases from aluminium

1939

Coatings for Aluminium die casting and spray guns for application

1946

First edition for the Foundryman’s Handbook published.

1947

Exothermic compounds for increasing casting yield developed.

1948

FEEDEX – Pre-formed exothermic sleeves developed for increasing foundry castings yields.

1955

FEEDEX – Pre-formed exothermic sleeves introduced for increasing steel casting yields.

1963

Inoculin first inoculant launched

1978

Ecolotec – Environment friendly sand blinders developed

1981

Kaltex ladle lining introduced

1982

Sivex & Sedex – Ceramic filters developed to remove non-metallic puritied aluminium, iron and steel castings.

1984

Rheotec coating introduced

1992

Kalpur – direct pour filter/feeder technology developed

1996

Feedercalc for windows software developed

1998

Introduction of thermal properties database

Coveral Granular Flux

2001

Hardcote Coatings

FIXED ASSETS

· Computer Software

· Freehold Land

· Leasehold Land

· Factory Buildings

· Buildings

· Plant and Machinery

· Laboratory and Office Equipments

· Furniture and Fittings

· Motor Vehicles

CONTINGENT LIABILITIES

	31.12.2007 (Rs. In Millions)
Counter guarantees given to banks in respect of guarantees given by them	0.918
Income tax demand in respect of which the Company is in appeal	26.061
Excise duty demands in respect of which the Company is in appeal	Nil
Claims against the Company not acknowledged as debts	0.600

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.42.82
UK Pound	1	Rs.80.01
Euro	1	Rs.63.83

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

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.	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