MIRA INFORM REPORT

Report Date :

10.07.2008

IDENTIFICATION DETAILS

Name :	TONIRA PHARMA LIMITED
Registered Office :	301 Yogi Complex, 44 Sampatrao Colony, Alkapuri, Baroda – 390 005, Gujarat.
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	13.08.1992
Com. Reg. No.:	018156
CIN No.: [Company Identification No.]	L99999GJ1992PLC018156
TAN No.: [Tax Deduction & Collection Account No.]	BRDT00305E
PAN No.: [Permanent Account No.]	AABCT0638F
Legal Form :	Subject is a Public Limited Liability Company. The Company’s shares are listed on the Stock Exchanges.
Line of Business :	Subject acts as Manufacturers and Exporters of Pharmaceutical Products. Subject is also engaged in manufacture of bulk drugs at its plant located in Ankleshwar, Gujarat. The company presently manufacture cardio vascular and anti-ulcer drugs and drug intermediates like atenolol, nifidipine PHAP, OHAP, PHPA, sulphamide, PHPAA acetamide and 1-3 dichloro acetone.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 650000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is an well-established and reputed company meeting its normal commitment timeously. Trade relations are fair. General financial position is good. The concern can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	23-24, GIDC Estate, Nandesari, District Vadodara – 391 340, Gujarat, India
Head Office :	Plot No. 4722, G.I.D.C. Estate, P. B. No. 21, Ankleshwar – 693 002, Dist. Bharuch, Gujarat
Tel. No.:	91-265-2328286 / 2328266 / 2343263/220594/224195
Fax No.:	91-265-2341594/250435
E-Mail :	tonira@sntpl.net.in , info@tonira.com , tonira@lwbdq.com
Website :	http://www.tonira.com
Corporate Office :	301, Yogi Complex, 44, Sampatrao Colony, Alkapuri, Vadodara – 390 005, Gujarat, India
Tel. No.:	91-265-2328266 / 2343263
Fax No.:	91-265-2341594
E-Mail :	info@tonira.com
Factory 1 :	Plot No. 4722, G.I.D.C. Estate, P. B. No. 21, Ankleshwar – 693 002, Dist. Bharuch, Gujarat
Tel. No.:	91-265-2328286 / 2328266 / 2343263/220594/224195
Fax No.:	91-265-2341594/250435
E-Mail :	tonira@sntpl.net.in , info@tonira.com , tonira@lwbdq.com
Factory 2 :	23-24, GIDC Estate, Nandesari, District Vadodara – 391 340, Gujarat, India

DIRECTORS

Name :	Mr. Bhailalbhai B. Shah
Designation :	Chairman
Name :	Mr. Mahesh N. Shah
Designation :	Vice Chairman and Managing Director
Name :	Mr. Virendra B. Shah
Designation :	Wholetime Director
Name :	Mr. Janardhan P. Sanyal
Designation :	Executive Director
Name :	Mr. Ramanlal V. Shah
Designation :	Wholetime Director (upto 13.02.2005)
Name :	Dr. Mihir Parikh
Designation :	Director
Name :	Mr. Prakash Hirani
Designation :	Independent Director
Name :	Mr. Mahesh Bhatt
Designation :	Independent Director
Name :	Mr. Rajesh Shah
Designation :	Independent Director
Name :	Dr. Arvind A Natu
Designation :	Independent Director
Name :	Mr. Pradeep Gandhi
Designation :	Independent Director
Name :	Mr. Mukesh Khanna
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoter's Holding
Indian Promoters	1754910	22.09
Person Acting in Concert	408280	5.14
Others Investors
Private Corporates Bodies	70900	0.89
NRIs/OCBs	382000	4.81
Others
General Public	5328410	67.07
Grand Total	7944500	100.00

BUSINESS DETAILS

Line of Business :	Subject acts as Manufacturers and Exporters of Pharmaceutical Products. Subject is also engaged in manufacture of bulk drugs at its plant located in Ankleshwar, Gujarat. The company presently manufacture cardio vascular and anti-ulcer drugs and drug intermediates like atenolol, nifidipine PHAP, OHAP, PHPA, sulphamide, PHPAA acetamide and 1-3 dichloro acetone.
Products :	Bulk Drugs Fine Chemicals Drugs Intermediates
Exports to :	Europe, South America, Singapore and Egypt.

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Bulk Drugs	Kgs.	*	100725.74
Drug Intermediate	Kgs.	*	8137.90
Fine Chemicals	Kgs.	*	0.000

* The Company is manufacturing Bulk Drugs, Drugs intermediate, Fine Chemicals Etc., the installed Capacity varies with change in products, product mix even though there may not be increase in Plant and Machineries.

GENERAL INFORMATION

No. of Employees :

406

Bankers :

¨ Bank of Baroda

International Business Branch Sayajigunj, Vadodara, Gujarat,

India

Facilities :

Secured Loan

(figures are in Rs. millions)

	31.03.2007	31.03.2006
Bank of Baroda	74.212	80.713
Cash Credit 5.375
(Secured by hypothecation of stocks of raw materials, stores, finished goods stock in process and book debts and secured by extension of existing equitable mortgage of property situated at Plot No. 4722,4723, at 4731 GIDC Ankleshwar and equitable mortgage of immovable property land and building situated at 23-24 GIDC Estate Nandesari )
PCFC A/c IBB 68.836
(Secured by hypothecation of stocks of raw materials, stores, finished goods stock in process ment for Export, and logment of irrevocable LC or Confirm Export Order)
Bank of Baroda Term Loan	--	--
FCNR Term Loan	120.557	129.023
(Secured by hypothecation of all Plant and Machinery both present and future and by Equitable mortgage of land and building situated at 23-24, GIDC Estate Nandesari, Baroda and property situated at Plot No. 4722, 4723 and 4731 GiDC Estate Ankleshwar.)
Kotak Mahindra Primus Limited	0.260	0.415
(secured by hypothecation of Cars)
ICICI Bank Limited	1.803	0.420
(secured by hypothecation of Cars)

Banking Relations :

Satisfactory

Auditors :

Mitesh P Vora and Company

Chartered Accountant

Ahmedabad, Gujarat, India

Associates :

• Tonira Export Limited

Activity - Merchant Exporter

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
80,00,000	Equity Shares	Rs. 10/-	Rs. 80.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
79,44,200	Equity Shares	Rs. 10/-	Rs.79.442 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		79.442	79.442	79.400
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		121.357	104.954	87.700
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		200.799	184.396	167.100
LOAN FUNDS
1] Secured Loans		196.835	210.573	153.000
2] Unsecured Loans		0.000	3.463	0.000
TOTAL BORROWING		196.835	214.036	153.000
DEFERRED TAX LIABILITIES		20.638	11.481	0.000
TOTAL		418.272	409.913	320.100
FIXED ASSETS [Net Block]		277.867	273.030	98.700
Capital work-in-progress				144.800
INVESTMENT		0.357	1.185	0.00
DEFERREX TAX ASSETS
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	152.293	107.155	92.100
	Sundry Debtors	40.279	55.726	19.100
	Cash & Bank Balances	3.547	2.733	7.000
	Other Current Assets	13.783	13.169	0.000
	Loans & Advances	7.131	7.149	12.700
Total Current Assets		217.033	185.933	130.900
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	81.626	51.581	51.100
	Provisions	0.000	0.000	3.800
Total Current Liabilities		81.626	51.581	54.900
Net Current Assets		135.407	134.352	76.000
MISCELLANEOUS EXPENSES		4.640	1.346	0.600
TOTAL		418.272	409.913	320.100

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		367.595	299.713	242.900
Other Income		0.00	0.00	0.00
Total Income		367.595	299.713	242.900
Profit/(Loss) Before Tax		26.545	26.411	23.800
Provision for Taxation		10.142	9.195	7.200
Profit/(Loss) After Tax		16.402	17.216	16.600
Export :		0.00	0.00	202.762
Imports :
	Raw Materials	119.905	79.958	84.279
	Capital Goods	1.270	2.246	0.00
	Others	0.000	0.000	0.00
Total Imports		121.175	82.204	84.279
Expenditures :
	Manufacturing Overheads	57.118	44.600	0.00
	Raw Material Consumed	190.729	134.914	0.00
	Pakcing Material Consumed	2.380	1.503	0.00
	Administrative and Selling Overheads	32.288	32.222	0.00
	Financial Overheads	18.091	12.475	0.00
	Personnel Overheads	45.473	34.611	0.00
	Depreciation for the year	25.687	24.379	0.00
	Other Expenditure	1.087	0.827	219.064
Total Expenditure		372.856	285.536	219.064

QUARTERLY RESULTS

PARTICULARS	30.06.2007	30.09.2007	31.12.2007	31.03.2008
Type	1^St Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Sales Turnover	79.100	110.700	49.000	85.200
Other Income	0.100	0.100	1.600	3.900
Total Income	79.200	110.800	50.600	89.100
Total Expenditure	62.000	99.300	68.400	145.700
Operating Profit	17.200	11.500	(17.800)	(56.600)
Interest	2.700	1.300	2.200	12.200
Gross Profit	14.500	10.200	(20.000)	(68.800)
Depreciation	8.400	4.500	6.400	8.400
Tax	0.800	0.800	(1.400)	0.00
Reported PAT	5.300	4.900	(25.100)	(43.300)

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt Equity Ratio	1.07	1.04	0.72
Long Term Debt Equity Ratio	0.66	0.66	0.33
Current Ratio	1.26	1.24	1.12
TURNOVER RATIOS
Fixed Assets	0.07	1.10	1.37
Inventory	2.90	3.05	2.70
Debtors	7.85	8.11	10.55
Interest Cover Ratio	2.49	3.14	6.06
Operating Profit Margin (%)	18.78	20.99	18.70
Profit Before Interest and Tax Margin (%)	11.97	12.95	12.45
Cash Profit Margin (%)	11.17	13.74	13.50
Adjusted Net Profit Margin (%)	4.35	5.67	7.25
Return on Capital Employed (%)	11.42	10.99	10.83
Return on Net Worth (%)	8.52	9.79	10.78

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject was incorporated on at Ankleshwar in Gujarat having Company Registration Number.

The company came out with a public issue in February, 1995 to part-finance its expansion cum diversification Programme of increasing its installed capacity and also setting up a new formulation unit. Its clients include Dabur India, Cadila Laboratories, Sol Pharmaceuticals, IPCA Laboratories, Nicholas Laboratories, Zandu Pharmaceuticals, Neuland Laboratories, Anglo-French, Catazyme Drugs and Pharmaceuticals, Glaxo India, etc.

It has strategic alliance with many overseas companies which includes:

• Schweizerhall, Singapore and Germany
• Deshores, France
• Nutrivete Corporation, USA
• Chemo lberica, Switzerland
• Samaha Company, Egypt
• Pharmaline, Italy

Operations in Retrospect :

During the year, the company fetched total income of Rs.367.595 millions against Rs.299.714 millions of the previous year registering growth of 22.65% and earned Gross Profit before interest and Depreciation of Rs.68.225 millions against 61.231 millions of the previous year showing growth of 11.42%, resultantly earned net profit after Tax of Rs.26.545 millions as against Rs.26.412 millions of the previous year, showing marginal growth mainly due to increased cost of raw material and manufacturing overheads and fluctuation in the rates of Foreign Exchange.

Future Outlook :

With increased mergers World over and increased Indian generic companies presences in USA, Formulation Companies in USA are in look out for API for their Formulation to compete against Indian and Chinese Generic Companies. Tonira is in right slot viewed as a better partner for such companies . As s result the company will have a good future prospects upon receipt of USFDA approval. Determined efforts are continued to avail USFDA approval.

MANAGEMENT DISCUSSION AND ANALYSIS :

Industry Structure and Development :

Indian pharmaceutical Industry, Because of patent Law, would note be able to copy pharmaceutical of originators and market to India for the products patented in India after 1995. As a result many of the have focused in European and US market for off patented formulation export, in order to balance their turnover. For an Indian API manufacturer, GMP having facilities and which can get approval of USFDA, with back up of R and D Analytical development and multi product facility, will have upper edge over others. In fact, Indian companies having global presence with their facility qualifying for the whole world, will be the need of time.

For Indian bulk drug manufacturers opportunities are present in two forms one export of non patented bulk drugs to regulated market of US, Europ and Japan and another Contract manufacturing of patent – protected bulk drugs for patent license holders India offers the advantage of its low production cost, Quality production and abundant sills. More and more Indian Pharmaceutical companies are going for the US FDA compliant plants and this has resulted in incrased volume, margins and profits.

Introduction :

Subject has got star Export House status from Ministry of Commerce, Govt. of India and Certificate of Recognition of Export House form the Development commissioner, kandla specil economic Zone, Gandhidham, in Active Pharmaceuticals Ingredients (APIs). The customer of Japan, Europe, South East Asia and South America, Except America (USA) are being catered form its WHO, GMP, ISO 9000 plant at Ankleshwar. Non with plant at nandesari having state of art R&D center, Major market of USA will be Catered by the company upon having Usfda Approvable Facilities where as Japan MHLW Has already Approved both plants at Ankleshwar and Nandesari of the company .

Operations and Business Strategy :

The company has alredy stared commercial production at its unit at Nandesari, Diat. Vadodara as Japan MHLW has approved the plant. It is expected that the company would get approval of USFDA shortly and it would accelerate Production activities thereat.

Tonira pharma Limited is trying to balance their production and sales between Europe, Japan and USA and also between intermediates and APIs, at both the location.

The company has aiready failed 3DMF during the current year. The company has added many new products in its products line mainly in Antihistamine, Analgesic and Anti-inflammatory Segments.

Technology:

Subject has focused on polymorphs of various products and particle size of major products. The Technology adopted by the company is an innovative cost effective and non infringing.

SWOT Analysis :

Strengths:

1. Tonira is a quality producer of exclusive products of its customers as per their specific requirements.
2. Its Nandsari Unit is USFDA compliant plant and ISO 9002 certified, Good Manufacturing practiese (GMP) certificates for the products is obtained.
3. Tonira has developed a stste of the art R & D center at Nandesari, Dist. Vadodara having world- class capabilities. The center is in the process of continuously developing nerer value- added molecules through innovative and cost effective process routes to tape the opportunities. These Facilities have been inspected and approved by some reputed MNCs who have shown their interest in business tie-ups.
4. Tonira is constantly involved in R & D to achieve cost reduction through alternative process routes, manufacturing excellence and reduction in energy costs.
5. Tonira should also be able to provide dedicated facilities for CRAMS (Contract Research and manufacturing service).
6. it has also filed patent for three molecules.
7. tonira has four Drug Master Files in CTD Format.
8. it has a very well- developed M/S And System of internal control, Which helps the management to take informed and timely decisions.

Weaknesses :

The R&D center of tonira is constantly involved in development of new molecules, which are scheduled to go off patent in the near future. Recent apporeciation of rupee is suppressing margins of the export oriented companies.

Opportunities and Threats :

All medium sized pharmaceutical companies, which have Succeeged in achieving manufacturing excellence over the years and have developed cost-effective synthesis routes have scope for partnering with multi- national companies for contract manufacturing and research service i. e. CRAMS. With the state of the art R&D center and extensive manufacturing facilities, Tonira is geared up to cash in the all opportunities.

The threat of Chinese competition seems to be diminishing slowly as Chinese costs have been increasing recently probably due to infrastructure bottlenecks. Chinese Govt. Policy of concentrating on more environmental friendly chemical plants is forcing some plants in china to close down. Also a revaluation of Chinese currency is expected in the near future.

Outlook and Future Strategy :

With commencement of commercial production at new unit at nandesari, the company is confident of registering higher production and seles in the coming future. The company is also in process of getting necessary approvals of various regulatory authorities such as US FDA and JAPAN MHL which Will help the company to export its products to these countries and reflect / signify Global presence.

The company depends more on strengthening core business with proven skills. Research and development to put on fast track for cost effectiveness and to have World Class Manufacturing Facility so it can continue to cater to developed countries in long run. Cost reduction and Control at all levels has been carried out as a regular practice for retention of profit in overall interest.

Armed with strong resource base and a vision to be a leading manufacturer of bulk drugs and high value Active pharma ingredients (APIs) in selected therapeutic areas. Tonira is poised to unleash its true potentials to meet the challenges and exploit the growth opportunities ahead.

Contingent Liabilities :

a) Unexpired letter of credit Rs.20.414 millions (previous year Rs. 10.677 millions) with margin money.

b) Income Tax Liabilities:

Asstt. Years	Amount of demand (Rs. in Millions )	Remark
1997-98	-	Hon’able CIT – (A) decided the matter partly in favour of the company and reduced the demand of Rs. 42.800 million to NIL and company has preferred an appeal before Hon’ able Income Tax Appellate Tribunal, Abmedabad
1998-99	1.388	Hn’able CIT u/s 263 of the Income Tax Act 1961 has raised demand against the company for which company has preferred an appeal before Hon’ able income Tax Appellate Tribunal, Abmedabad
2000-2001	-	Hon’able CIT – (A) decided the matter partly in favour of the company and reduced the demand of Rs7.876 million to NIL, but income tax dept. has preferred an appeal before Hon’ able ITAT, Abmedabad against the decision of Hon’able CIT (A)
2001-2002	-	Hon’able CIT – (A) decided the matter partly in favour of the company and reduced the demand of Rs 4.468 million to NIL, but income tax dept. has preferred an appeal before Hon’ able ITAT, Abmedabad against the decision of Hon’able CIT (A)
2002-2003	-	Hon’able CIT – (A) decided the matter partly in favour of the company and reduced the demand of Rs 7.910 million to NIL, but income tax dept. has preferred an appeal before Hon’ able ITAT, Abmedabad against the decision of Hon’able CIT (A)
2004-2005	-	Hon’able CIT – (A) decided the matter partly in favour of the company and reduced the demand of Rs 2.615 million to NIL, but income tax dept. has preferred an appeal before Hon’ able ITAT, Abmedabad against the decision of Hon’able CIT (A)
Total	1.388
Less	4.884	The amount represents the amount deposited under protest and refunds adjusted by I.T Dept. against above Demands Raised.
Net	(3.496)	Refundable

Excise Liabilities :

Department of Central Excise and Customs has Raised a demand of Rs. 89.829 millions and imposed penalty of equivalent amount. The matter has heard by Hon’able CESTAT, West Zonal Branch, Mumbai and reduced the same to 48.100 millions and penalty to 10% of the same, second apprllate authorized did not consider other vital points relevant to the issue and hence company has approached to Hon’able Gujarat High Court.

Provision For Taxation :

1. The company has been approved as a 100% Export Oriented unit for which the company has utllized Plot No. 4723 and 4731 situated at G.I.D.C., Ankleshwar, The company has stared manufacturing in 100% E.O.U Unit w.e.f. 1.10.1999 at Ankleshwar the profit of the one of the unit at Ankleshwar is 100% deductible under section 10 B of the income tax Act, 1961.
2. The company project at Plot No. 23-24, GIDC Estate Nandesari, Baroda has been approved as 100% EOU and project has stared commercial production from 22 .06.2005 and Profit of this unit are 100% deductible under section 10 B of the income tax Act, 1961.

1. 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.43.13
UK Pound	1	Rs.85.02
Euro	1	Rs.67.77

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	8
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--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	YES
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		58

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