MIRA INFORM REPORT

Report Date :

01.12.2008

IDENTIFICATION DETAILS

Name :	NORTHERN COALFIELDS LIMITED
Registered Office :	P.O. – Singrauli Colliery, Singrauli, District Sidhi – 486889, Madhya Pradesh
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	28.11.1985
Com. Reg. No.:	003160
CIN No.: [Company Identification No.]	U10102MP1985GOI003160
TAN No.: [Tax Deduction & Collection Account No.]	JBPN00430D
PAN No.: [Permanent Account No.]	AABCN4884H
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	The company is engaged in production of Coal.

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 300000000
Status :	Excellent
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a Government of India company and a subsidiary of Coal India Limited. Available information Indicates high financial responsibility of the company. Financial position is good. Payments are correct and as per commitments. The company can be regarded as a promising business partner in a medium to long-run.

LOCATIONS

Registered Office :	P.O. – Singrauli Colliery, Singrauli, District Sidhi – 486889, Madhya Pradesh, India
Tel. No.:	91-7805-266670/ 266621/ 56201/ 66613/ 56204/ 66612/ 56205/ 66615/ 56202/ 66607 / 56203/ 5546/ 72697 91-7822-6655/ 6475/ 6635/ 6694/ 6621
Fax No.:	91-7805-6640/ 6420/ 66459 / 67048 / 66652 / 67051
E-Mail :	cs_@nclhq.nic.in nclsgr@hotmail.com nclsgr@yahoo.com
Website :	http://www.ncl.nic.in
Gust House :	NCL Transit Camp, 3, Patel Nagar, Varanasi Contact Person : Mr. V. N. Mishra - Chief Caretaker Tel. No. 91-542-46891 / 348624 VIP Guest House, NCL Singrauli, P. O. Singrauli, District Sidhi - 486 889, Madhya Pradesh Contact Person : Mr. B. K. Shukla, Chief Caretaker Tel. No. 91-7822-6616 Desk Office, 10, Camac Street (10^th Floor), Kolkata - 700 016, West Bengal Contact Person : Mr. A. K. Dutta, General Manager Tel. No. 91-33-2421432 / 2425848
Resident Representatives At Delhi:	Contact Person : Mr. A. K. Tooley, Director (Tech.) WCL Coal India Limited, Flat No. 402-404, 4^th Floor, Ansal Bhavan, 16, Kasturba Gandhi Marg, New Delhi - 110 001 Tel. No. 91-11-3319109 / 372971 (Office) / 5784460 (Res.) Contact Person : Mr. I. J. Kaushal, Deputy Chief Mining Engineering Coal India Limited, Flat No. 402-404, 4^th Floor, Ansal Bhavan, 16, Kasturba Gandhi Marg, New Delhi - 110 001 Tel. No. 91-11-3311163 / 3731435 (Office) / 6468724 (Res.)

DIRECTORS

Name :	Mr. S. V. Chaoji
Designation :	Chairman
Name :	Mr. Virendra Kumar Singh
Designation :	Chairman and Managing Director
Address :	CMD Bunglow, Seti Complex, Singrauli, Sidhi – 486889, Madhya Pradesh
Date of Birth/Age :	05.07.1948
Date of Appointment :	05.02.2004
Name :	Mr. Ram Narayan Roy
Designation :	Director
Address :	Bunglow No.3, Ceti Singrauli, Singrauli, Sidhi – 486889, Madhya Pradesh
Date of Birth/Age :	04.12.1947
Date of Appointment :	01.11.2004
Name :	Mr. Satish Kumar Bartiyar
Designation :	Director
Address :	Bunglow No.4, Ceti Singrauli, Singrauli, Sidhi – 486889, Madhya Pradesh
Date of Birth/Age :	01.01.1948
Date of Appointment :	09.11.2005
Name :	Mr. A. K. Das
Designation :	Director (Finance)
Name :	Mr. B. N Mishra
Designation :	Director (Technical)
Name :	Mr. N N Jha
Designation :	Director (Personnel)
Name :	Mr. Jwala Prasad
Designation :	Director (Technical)
Name :	Mr. Rajiv Sharma
Designation :	Director
Name :	Mr. B N Ojha
Designation :	Director
Name :	Mr. Manoj Kumar
Designation :	Director
Name :	Mr. D K Verma
Designation :	Director
Name :	Mr. A K Jhingron
Designation :	Director
Name :	Mr. S K Srivastava
Designation :	Director
Name :	Mr. P K Saxena
Designation :	Director (Technical/Operations)
Address :	Bunglow No.5, Ceti Singrauli, Singrauli, Sidhi – 486889, Madhya Pradesh
Date of Birth/Age :	24.12.1948
Date of Appointment :	01.08.2006
Name :	Mr. S, N Choudhary
Designation :	Director (Finance)
Address :	Bunglow No.2, Ceti Complex, Singrauli, Sidhi – 486889, Madhya Pradesh
Date of Birth/Age :	07.01.1949
Date of Appointment :	01.02.2006
Name :	Mr. N. Das
Designation :	Director (Technical/P and P)
Address :	Bunglow No.3, Ceti Singrauli, Singrauli, Sidhi – 486889, Madhya Pradesh
Date of Birth/Age :	19.08.1958
Date of Appointment :	02.04.2008
Name :	Mr. S. L Sahu
Designation :	Director (Personnel)
Name :	Mrs. Shantilata Shahu
Designation :	Director
Address :	Bunglow No.4, Ceti Singrauli, Singrauli, Sidhi – 486889, Madhya Pradesh
Date of Birth/Age :	17.07.1958
Date of Appointment :	01.01.2008
Name :	Mr. Rajendra Shankar Pande
Designation :	Director
Address :	Flat No. 204 B, White House Apartment Bujh Marg, Patna, Bihar
Date of Birth/Age :	12.07.1952
Date of Appointment :	30.09.2005
Name :	Mr. Ranjana Chowdhary
Designation :	Director
Address :	D 2- 4, Char Imli, Bhopal – 462016, M.P.
Date of Birth/Age :	30.06.1952
Date of Appointment :	10.07.2007
Name :	Mr. Chandan Roy
Designation :	Director
Address :	Flat No.158, Madan Lal Block, Asiad Games Village, New Delhi – 110049
Date of Birth/Age :	16.07.1950
Date of Appointment :	26.08.2004
Name :	Mr. Laljagat Narain Srivastva
Designation :	Director
Address :	316- Sector 17- A, Gurgaon – 122001, Gujarat
Date of Birth/Age :	01.01.1943
Date of Appointment :	24.08.2007
Name :	Mr. Vinod Kumar Bhalla
Designation :	Director
Address :	21/1, Cavalry Line, Delhi University, New Delhi – 110011
Date of Birth/Age :	15.11.1948
Date of Appointment :	24.08.2007
Name :	Mrs. Parvathisem Putcha
Designation :	Director
Address :	301- Ramaneeyam, Kalajali Sidharth Arcade, Saisankalp Nagar, Jeedimetla Nagar, Hyderabad - 500055
Date of Birth/Age :	14.08.1941
Date of Appointment :	24.08.2007
Name :	Mr. Biswant Pan
Designation :	Director
Address :	FE – 143, 1^st Floor, Sector 3, Kolkata – 700091, West Bengal
Date of Birth/Age :	01.09.1943
Date of Appointment :	29.08.2007
Name :	Mr. Dayaram Harpaldas Lalwani
Designation :	Director
Address :	Ort No. D 24, NCl Colony, Singrauli – 486889, Madhya Pradesh
Date of Birth/Age :	13.04.1955
Date of Appointment :	21.11.2006

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 24.07.2008

Names of Shareholders	No. of Shares
Mr. Virendra Kumar Singh	1
Mr. Partha Bhattacharyya	1
Mrs. Shyamal Bhattacharya	1
Coal India Limited	1776725
Total	1776728

AS ON 24.07.2008

Equity Share Breakup	Percentage of Holding
Category
Government Companies	100.00

BUSINESS DETAILS

Line of Business :

The company is engaged in production of Coal.

Particulars	Actual Production
Coal	59.623
Deshaled Coal	3.071

GENERAL INFORMATION

Supplier :

• Balaji Industrial Products Limited
• Hindustan Facing Industries
• Bhilai Eng Corporation Limited
• PTC Industries Limited
• Kumar Engineering Works
• Mishra and Brothers
• Naveen Engineering Works
• Raipur Rotocast Limited
• R K Engineering Corporation
• Veer Eng Works
• Bombay Machinery (P) Limited
• Nezone Tubes
• S N Engineering Private Limited
• Steel Cast Limited
• Engineering Enterprises

Bankers :

• State Bank of India, Sidhi Branch, Madhya Pradesh, India.
• World Bank

Facilities :

Coal India Limited Loan and Advances	Rs. In Millions 31.03.2008
World Bank (Guaranteed by Coal India Limited)	8150.387

Banking Relations :	Satisfactory
Auditors :
Name 1 :	Ramesh C Agrawal and Company Chartered Accountants
Name 2 :	Parikh and Jain Chartered Accountant
Address :	59/ 48, Birhana Road, Kanpur – 208001, Uttar Pradesh, India
Name 3 :	M R Daga and Company Chartered Accountant
Address :	Satna – 485001, Madhya Pradesh, India
Parent Company :	Coal India Limited

CAPITAL STRUCTURE

AS ON 24.07.2008

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.1000/- each	Rs.10000.000 Millions
4000000	Preference Shares	Rs.1000/- each	Rs.4000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1776728	Equity Shares	Rs.1000/- each	Rs.1776.728 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		1776.728	1776.700	1776.700
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		58987.863	53826.800	45475.900
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		60764.591	55603.500	47252.600
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		8150.387	8877.000	9779.800
TOTAL BORROWING		8150.387	8877.000	9779.800
DEFERRED TAX LIABILITIES		1377.934	0.000	0.000
TOTAL		70292.912	64480.500	57032.400
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		18322.748	18973.000	19492.000
Capital work-in-progress		3215.671	1793.600	1086.000
INVESTMENT		916.480	1088.300	1145.600
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2977.351	2257.200	2245.600
	Sundry Debtors	518.279	505.200	1089.100
	Cash & Bank Balances	39592.324	30957.400	24287.400
	Other Current Assets	1990.803	0.000	0.000
	Loans & Advances	30773.707	30876.500	26283.200
Total Current Assets		75852.464	64596.300	53905.300
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	20763.039	21970.700	18596.500
	Provisions	7251.412	0.000	0.000
Total Current Liabilities		28014.451	21970.700	18596.500
Net Current Assets		47838.013	42625.600	35308.800
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		70292.912	64480.500	57032.400

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		54552.071	46308.400	45468.600
Other Income		6375.534	5817.100	3672.900
Total Income		60927.605	52125.500	49141.500
Profit/(Loss) Before Tax		27637.509	21776.100	21162.600
Provision for Taxation		9901.471	8111.300	8152.800
Profit/(Loss) After Tax		17736.038	13664.800	13009.800
Imports :
	Raw Materials	Nil	Nil	--
	Stores & Spares	1120.557	1035.840	--
	Capital Goods	29.637	Nil	--
Expenditures :
	Power & Fuel	2345.772	1928.100	1930.800
	Manufacturing Expenses	0.000	12486.900	10574.700
	Employees Cost	0.000	4870.900	4233.800
	Miscellaneous Expenses	0.000	7188.500	7319.700
	Interest	307.347	495.600	470.300
	Depreciation & Amortization	3148.391	3234.100	3388.400
	Increase/(Decrease) in Finished Goods	(442.661)	145.300	61.200
	Others Expenses	27931.247	0.000	0.000
Total Expenditure		33290.096	30349.400	27978.900

KEY RATIOS

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
PAT / Total Income	(%)	29.11	26.21	26.47
Net Profit Margin (PBT/Sales)	(%)	50.66	47.02	46.54
Return on Total Assets (PBT/Total Assets}	(%)	28.11	25.18	27.98
Return on Investment (ROI) (PBT/Networth)		0.45	0.39	0.44
Debt Equity Ratio (Total Liability/Networth)		0.59	0.55	0.60
Current Ratio (Current Asset/Current Liability)		2.70	2.94	2.89

LOCAL AGENCY FURTHER INFORMATION

History:

Subject was formed in April 1986 as a subsidiary company of Coal India Limited. Its headquarter is located at Singrauli, Distt. Sidhi (M.P.). Singrauli is connected by road with Varanasi (220 Km.) – a holy city on the banks of river Ganga, and Rewa (206 Km.) – the state of white tigers and Sidhi (100 Km.) – district headquarter town of Madhya Pradesh. The nearest railway station is Singrauli located on the Katni-Chopan branch line running parallel to the northern boundary of the Coalfield. The nearest railway station for reaching directly to Delhi and Kolkata is Renukoot that is located on the Garhwa-Chopan rail-line. Nearest (private) airstrip is at Muirpur (60 Km.).

The area of Singrauli Coalfields is about 2202 Sq.Km. The coalfield can be divided into two basins, viz. Moher sub-basin (312 Sq.Km.) and Singrauli Main basin (1890 Sq.Km.). Major part of the Moher sub-basin lies in the Sidhi district of Madhya Pradesh and a small part lies in the Sonebhadra district of Uttar Pradesh. Singrauli main basin lies in the western part of the coalfield and is largely unexplored. The present coal mining activities and future blocks are concentrated in Moher sub-basin.

The exploration carried out by GSI/NCDC/CMPDI has proved abundant resource of power grade coal in the area. This in conjunction with easy water resource from Govind Ballabh Pant Sagar makes this region an ideal location for high capacity pithead power plants. The coal supplies from NCL has made it possible to produce about 10515 MW of electricity from pithead power plants of National Thermal Power Corporation (NTPC), Uttar Pradesh Rajya Vidyut Utpadan Nigam Ltd (UPRVUNL) and Renupower division of M/s. Hindalco Industries. The region is now called the "power capital of India". The ultimate capacity of power generation of these power plants is 13295 MW and company is fully prepared to meet the increased demand of coal for the purpose. In addition, NCL is also supplying coal to power plants of Rajasthan Rajya Vidyut Utpadan Nigam Limited, Delhi Vidyut Board (DVB) and Hariyana State Electricity Board.

Company produces coal through mechanised opencast mines but its commitments towards environmental protection is total. It is one of very few companies engaged in mining activities, which has got ISO –14001 Certification for its environmental systems.

Company through its community development programmes, has significantly contributed towards improvement and development of the area. It is helping local tribal, non-tribal and project-affected persons in overall improvement of quality of their life through self-employments schemes, imparting education and providing health care.

Form 8

This form is for

Modification of charge

Charge identification number of the modified

90209425

Corporate identity number of the company

U10102MP1985GOI003160

Name of the company

NORTHERN COALFIELDS LIMITED

Address of the registered office or of the principal place of business in India of the company

P.O. – Singrauli Colliery, Singrauli, District Sidhi – 486889, Madhya Pradesh, India

Type of charge

Book Debts

Others

Particular of charge holder

Name :	State Bank of India
Address :	Reliance House, 2^nd Floor, 34 Jawaharlal Nehru Road, Kolkata – 700071, West Bengal, India
Email :	Siddhartha.guru@sbi.co.in

Nature of description of the instrument creating or modifying the charge

The modified joint deed of hypothecation executed by the company in favour of the Consortium of Banks led by Stare Bank of India, modifying the charges from rs.3150.000 Millions to Rs.1650.000 Millions, created on receivables, stocks of raw materials, finish and semi finish goods, consumables, stores and spares not related to plant and machinery, for availing working capital limit by Coal India Limited, the holding Company and its subsidiaries, including NCL, to the extent of Rs.5500.000 Millions.

Date of instrument Creating the charge

01.09.2008

Amount secured by the charge

Rs.1650.000 Millions

Brief particulars of the principal terms an conditions and extent and operation of the charge

Rate of Interest

Interest shall be charged on the outstanding at the rates as the second schedule, i.e. at SBAR, or such rate as may be determined by the Banks from time to time, and if such rate is linked to the prime lending rate, then the effective rate of interest on such account shall correspondingly stand on account of any revision therein from the date of any such revision.

Terms of Repayment

The company shall repay the advances of the banks within such number of days as may be stipulated by the banks of the utilization of the advances by the company on each occasion

The company shall pay to each of the banks on demand the amounts outstanding under the demand loans granted by the banks.

Margin

Finish goods 35%

Consumables, stores and spares (not related to plant and machinery) 60%

Extent and Operation of the charge

The consumable of banks led by state Bank of India shall have first charge on the current assets of the company comprising book debts, stock of raw materials, finish and finish goods, consumables, stores and spares (not related to plant and machinery), for availing working capital limit by Coal India Limited, the holding company and its subsidiaries, including NCL, to the extent of Rs.1650.000 Millions

Others

The company shall keep the hypothecated assets in goods and marketable condition. The company in the ordinary course of business sell and dispose of the hypothecated assets, and a monthly statement as per the form mutually agreed, shall be submitted to the banks. The company shall execute such further document to vest the hypothecated assets, as required by he banks. The security shall be continuing security for the balance from time to time due to the said banks.

Short particulars of the property charged

Raw materials, finish and semi finished goods, consumables, stores and spares (not pertaining to plant and machinery), receivables located at the various mines under NCL.

Website Details:

Coal Production

Mining history in this region is very old. The first systematic mining, however, was started by NCDC in Jhingurda during early sixties. The master plan of the coalfield (Moher Basin) was prepared by P&D Division of NCDC in consultation with Soviet Experts. This envisaged construction of large mechanised opencast mines. The mining activities are going on as per the master plan provisions. Company, during successive years has not only achieved targets of production but also exceeded them.

During 2006-07 coal production was 52.16 million tonnes. In 2007-08, the revised target for coal production is fixed at 58.00 million tonnes. NCL has excellent record of capacity utilisation, which is around 86.24% in 2006-07. The productivity in terms OMS (Output per Man-shift) of NCL during 2006-07 was 10.97 tonnes, which has been the highest in CIL and during successive years it is increasing. It is planned to remove 186.00 Million CuM of overburden during 2007-08, out of which 142 Million CuM will be removed departmentally and rest (44 Million CuM) will be outsourced under Emergency Coal Production Plan.

Industrial Relations:

The industrial relations at company have been very congenial throughout the past successive years. Employees' representatives take active participation in operational matters, health & hygiene, welfare matters etc. through forums such as joint consultative committee, safety committee, welfare board, community development committee, sports control board, employee benevolent fund committee and core group. The participative style of management facilitates amicable settlement of disputes & grievances.

Organisational Objectives

• To ensure planned production of coal efficiently, matching with increasing demand of coal, which is the prime source of energy for the nation.

• To generate safety awareness amongst employees as also to create safe working culture.

• To ensure clean, green and pollution free environment at working places and also at surrounding areas.

• To ensure optimum capacity utilisation of men, machinery and available resources.

• To ensure cost control by developing cost consciousness.

• To ensure strict quality control for better consumer satisfaction.

• To ensure perfect manpower planning and also harness the best out of available human resource.

• To ensure improved quality of life of work force through welfare measures

• To be concerned for the community especially for the tribal and backward sections of the society residing in and around mining projects.

• To ensure rehabilitation of project affected people (PAP) as per the guidelines provided by Coal India Limited and approved by the Ministry of Coal and also taking PAPs into confidence to elicit their co-operation in achieving Corporate Objectives.

• To develop good work culture through disciplined, contended and motivated workforce for achieving Organizational Objectives.

Corporate Management Team

Shri V.K. Singh

Chairman cum Managing Director

Phone 7805 - 266621, 256201(office)

Fax 7805 - 266459 (office)

Email- cmd.ncl@nclhq.nic.in

Shri N. Das

Director (Technical/P&P)

Phone 7805 - 266607, 256203 (office)

Fax 7805 - 267051

Email- dtpp.ncl@nclhq.nic.in

Shri S.N. Choudhary

Director Finance

Phone 7805 - 266613, 256204(office)

Fax 7805 - 267048

Email- df.ncl@nclhq.nic.in

Shri P.K. Saxena

Director (Technical/Operations)

Phone 7805 - 266615, 256202 (office)

Fax 7805 - 266652

Email- dto.ncl@nclhq.nic.in

Sushri.S.L.Sahu
Director (Personnel)

Phone 7805 - 266612,256304 (office)

Fax 7805 - 267410

Email- dp.ncl@nclhq.nic.in

Fixed Assets

• Land
• Buildings
• Railway Sidings
• Plant and Machinery
• HEMM
• Furniture and Office Equipment
• Vehicles
• Firm Arms

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.49.84
UK Pound	1	Rs.76.81
Euro	1	Rs.64.38

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	NO
--LISTED	YES/NO	NO
--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

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