MIRA INFORM REPORT

Report Date :

23.07.2008

IDENTIFICATION DETAILS

Name :	CHEMICAL PROCESS EQUIPMENTS PRIVATE LIMITED
Registered Office :	C P E Plots BSD Marg, Govandi Station Road, Govandi, Mumbai – 400 088, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	21.10.1970
Com. Reg. No.:	11-14849
CIN No.: [Company Identification No.]	U74999MH1970PTC014849
TAN No.: [Tax Deduction & Collection Account No.]	MUMC13438F
PAN No.: [Permanent Account No.]	AAACC0465C
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer, Exporter and Importer of FRP Tanks & Vessels, Fibreglass Reinforced Plastic Pipings, Pollution Control Equipments and Other Chemical Equipments.

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 750000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company engaged in manufacturing and selling of Chemical Process Equipments, such as FRP Tanks and Vessels, FRP Piping and other Chemicals equipment. The company’s trade relations are reported as fair. Payments are usually correct and as per commitments. It can be considered normal for business dealings at usual trade terms and conditions.

INFORMATION PARTED BY

Name :	Mr. Nitin Shetty
Designation :	Finance Executive
Date :	22.07.2008

LOCATIONS

Registered Office :	C P E Plots BSD Marg, Govandi Station Road, Govandi, Mumbai – 400 088, Maharashtra, India
Tel. No.:	91-22-55978141-44 / 25563275 / 67230500
Fax No.:	91-22-25562248 / 3375
E-Mail :	cpe@giasbm01.vsnl.net.in cpe@vsnl.com
Website :	http://www.cpel.com
Area :	3600 Sq. Mtrs.
Location :	Owned
Administrative Office :	40 Hamam Street (Ambalal Doshi Marg), Mumbai - 400 023, India
Factory :	· CPE Plots, Bhaktkavi Shivajibai Devshi Marg, Govandi Station Road, Govandi, Mumbai – 400 088, INDIA. · Silvassa, Union Territory · Navi Mumbai, Maharashtra · Baroda · Ghansoli

DIRECTORS

Name :	Mr. Baghsingh Rajpurohit
Designation :	Managing Director
Date of Birth/Age :	01.09.1936
Date of Appointment :	21.10.1970
Address :	B-1, Runwal Park, Chembur, Mumbai – 400 071
Name :	Mr. Eswar Param Harihar
Designation :	Director
Date of Birth/Age :	29.01.1937
Date of Appointment :	31.10.1970
Address :	6/82, Brahmanwada Road, Matunga, Mumbai – 400 019
Name :	Mr. Hasmukh R. Gandhi
Designation :	Director
Date of Birth/Age :	11.03.1941
Date of Appointment :	31.10.1970
Address :	602, Neelkanth Towers, Garodia Nagar, Ghatkopar, Mumbai – 400 077
Name :	Mr. Subbaraman Melarkode
Designation :	Director
Date of Birth/Age :	15.02.1945
Date of Appointment :	20.08.1996
Address :	B-41, Usha Vihar, Gus Road, Mulund (West), Mumbai – 400 081
Name :	Mr. Vardichan Rajpurohit
Designation :	Director
Date of Birth/Age :	01.10.1941
Date of Appointment :	20.08.1996
Address :	27/3, Sindhi Society, Chembur, Mumbai – 400 071
Name :	Mr. Ashwin B. Rajpurohit
Designation :	Director
Date of Birth/Age :	04.05.1964
Date of Appointment :	20.08.1996
Address :	B-1, Runwal Park, Chembur, Mumbai – 400 071
Name :	Mr. Vijay B. Rajpurohit
Designation :	Director
Date of Birth/Age :	06.08.1965
Date of Appointment :	20.08.1996
Address :	B-1, Runwal Park, Chembur, Mumbai – 400 071

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 30.09.2005)

Names of Shareholders	No. of Shares
Jagdish Rajpurohit	2477
Vijay Rajpurohit	8564
B.S. Rajpurohit	25740
Ashwin Rajpurohit	7938
Aryaman Rajpurohit	8362
Akshay Rajpurohit	7892
Abhijit Rajpurohit	7891
H. R. Gandhi	2900
Aditya Rajpurohit	7450
Aryaman Rajpurohit	8450
Vardichand Purohit	1300
M. A. Subbaraman	1300
Aditya Rajpurohit	8736
Total	99000

Equity shares Breakup (percentage of total equity)

(As on 30.09.2007)

Category	Percentage
Directors or relative of directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer, Exporter and Importer of FRP Tanks & Vessels, Fibreglass Reinforced Plastic Pipings, Pollution Control Equipments and Other Chemical Equipments.
Products :	· FRP Piping · Other chemical equipments · FRP Tanks and vessels
Exports :
Countries :	· Singapore · Germany · Italy · France · Canada · Spain · USA · Finland · Kuwait · Jordan · Bahrain · Malaysia · Taiwan · Indonesia · Thailand
Imports :
Countries :	· Singapore · Germany · Italy · France · Canada · Spain · Europe
Terms :
Selling :	L/C, Cash and Credit (30 days)
Purchasing :	L/C – 120 days, Cash and Credit (90 days)

GENERAL INFORMATION

Customers :	Manufacturer
No. of Employees :	436 (In Office 71, In Factory 65 and Contract Workers 300)
Bankers :	· Bank of Baroda Corporate Financial Services Branch, 0/12 Mumbai Samachar Marg, Mumbai – 400 023, Mahaarshtra, India · State Bank of Bikaner & Jaipur Cooks Building, D. N. Road, Fort, Mumbai - 400001,Maharashtra, India · Standard Chartered Grindlays Bank Limited, Mumbai · The Saraswat Co-operative Bank Limited, Mumbai · Punjab National Bank, Mumbai and New Delhi · Dena Bank, Mumbai · Dena Bank, Alkapuri, Baroda, Gujarat · Development Corporation of Bank Limited, Fort, Mumbai · State Bank of India
Facilities :	CC – Rs.190.000 millions

Banking Relations :	Satisfactory
Auditors :
Name :	Gupta Verma and Associates Chartered Accountants
Address :	A/103, Rajeshree Accord, Telly Gully, Cross Lane, Andheri (E), Mumbai – 400 059, Maharashtra, India
Associates/Subsidiaries :	· Chemical Process Piping Private Limited · Deluxe Polyfab Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
100000	Equity Shares	Rs.100/- each	Rs.10.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
99000	Equity Shares	Rs.100/- each	Rs.9.900 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		9.900	9.900	9.900
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		139.490	137.222	123.986
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		149.390	147.122	133.886
LOAN FUNDS
1] Secured Loans		50.275	47.035	32.062
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		50.275	47.035	32.062
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		199.665	194.157	165.948
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		24.906	17.454	13.020
Capital work-in-progress		0.425	0.000	0.000
INVESTMENT		0.517	0.557	0.183
DEFERREX TAX ASSETS		1.943	4.425	2.985
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	143.258	107.167	146.599
	Sundry Debtors	66.563	56.462	29.942
	Cash & Bank Balances	33.410	41.255	18.364
	Other Current Assets	1.203	0.462	0.364
	Loans & Advances	48.465	91.205	85.125
Total Current Assets		292.899	296.551	280.394
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	77.733	89.754	110.608
	Provisions	43.293	35.076	20.026
Total Current Liabilities		121.026	124.830	130.634
Net Current Assets		171.873	171.721	149.760
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		199.665	194.157	165.948

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005
Sales Turnover [including other income]	483.137
Profit/(Loss) Before Tax	14.838
Provision for Taxation	5.426
Profit/(Loss) After Tax	9.412
Export Value	NA
Import Value	NA
Total Expenditure	468.299

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	NA	NA	1.95
Net Profit Margin (PBT/Sales)	(%)	NA	NA	3.07
Return on Total Assets (PBT/Total Assets}	(%)	NA	NA	5.06
Return on Investment (ROI) (PBT/Networth)		NA	NA	0.11
Debt Equity Ratio (Total Liability/Networth)		1.15	1.17	1.21
Current Ratio (Current Asset/Current Liability)		2.42	2.38	2.15

LOCAL AGENCY FURTHER INFORMATION

Trade References :

· Sterlite Industries India Limited

· Hindustan Zinc Limited

History

Subject was incorporated on 21^st October 1970 at Mumbai in Maharashtra having Company Registration Number 14849.

Subject was started in a humble way by the present Chairman & Managing Director Mr. B. S. Rajpurohit. Over a short span of years, it has grown to be a well diversified multi product company with an undisputed leadership in the field of fiberglass reinforced plastics.

Subject design, manufacture and erect field storage tanks, reaction vessels, pressure vessels, wet gas electrostatic precipators, scrubbing systems, exhaust systems, polymer concrete cells, process piping, gratings, cable trays, linings, etc.

Subject is undisputed leaders in the manufacture of fibreglass reinforced plastics (FRP) equipment.

The company has received the TOP Exporter Award many times for FRP products from the PLEXCONCIL sponsored by the Ministry of Commerce, Government of India

The company consumes raw materials viz. Thermostat Plastic, Fibreglass Reinforcement Material, Mild Steel and Synthetic Resin.

The company own large manufacturing facilities, land and building.

B. S. Rajpurohit - Chairman and Managing Director

Mr. B.S. Rajpurohit is the founder and presently the Chairman and Managing Director of Chemical Process Equipments Limited He is singularly responsible for the growth of the Fibreglass Reinforced Plastic Industry in India, serving the Chemical Engineering Industry in India.

His Qualifications: B. Sc (Tech) from UDCT, Mumbai University. Post Graduate Diploma in Chemical Engineering from the Battersea College of Advanced Technology, London.

He is a member of the Indian Institute of Chemical Engineers and Plastics Institute and is the Vice President of The All India Reinforced Plastic Moulders Association. He is a visiting faculty at UDCT, Mumbai University.

Ashwin Rajpurohit - Joint Managing Director.

Is a Mechanical Engineer from Bangalore University. He has been with the Company since 1986. He is presently the Works Director of the Company. His responsibility involves Manufacturing, Planning and Execution of all Fibreglass Reinforced Products in all CPE units.

Vijay Rajpurohit - Joint Managing Director

Mr. Vijay Purohit is an Environmental Engineer from Mumbai University. He has been associated with the Company since 1989. He is responsible for Project Sales, especially in selling equipments for SO2 Gas Cleaning Plants, Chlor Alkali Plants and exports world-wide.

He is a member of the Society of Plastic Engineers & Composites Fabricators Association.

H. R. Gandhi - Commercial Director

Mr. H. R. Gandhi joined the company in the year 1964 as a Commercial Superintendent and thereafter he became the Commercial Director of the Company in 1970. Today, he is involved in procurement, imports, exports, finance, accounts and taxations.

M. A. Subbaraman - Sales Director

Mr. M. A. Subbaraman is a Chemical Engineer from the Government Engineering College, Trichur, Kerala. He is presently the Sales Director of CPE and is responsible for the Design and Sales of FRP Chemical Equipments.

He is a member of the Indian Institute of Chemical Engineers.

V. C. Rajpurohit - Production Director

Joined the Company as one of its first members in 1964. He is today the Production Director of the Company. He is responsible for carrying out Erection and Commissioning of all CPE products in India and abroad.

Genesis and Evolution

Subject, started in a humble way by the present Chairman & Managing Director Mr. B. S. Rajpurohit. Over a short span of years, it has grown to be a well diversified multi product company with an undisputed leadership in the field of Fibreglass Reinforced Plastics (FRP) Fabrication. At present, CPE holds an esteemed position in the field of FRP products in India as well as abroad - a name that is synonymous with quality. It has manufacturing facilities in Bombay and Silvassa. There are over 500 personnel working with CPE including some of the most knowledgeable and experienced professionals in the industry.

Manufacturing Sites

Their manufacturing facilities are located at Mumbai (Maharashtra, India), New Mumbai (Maharashtra, India) and Vadodara (Gujarat, India). All these plant sites use state-of-the-art techniques for manufacture of various materials and other related work. There are more than 300 technically qualified and experienced professionals employed at both these places.

They have the infrastructure and the facilities for the manufacture of FRP equipment using Isophthalic Polyester, Bisphenol Polyester, Vinyl Ester, Furane and other Plastics such as Polyvinyl Chloride (PVC), Chlorinated Polyvinyl Chloride (CPVC), Polypropylene (PP), High Density Polyethylene (HDPE), Poly Vinylidene Flouride (PVDF) and Flourinated Ethylene Propylene (FEP). Dual Laminates using thermoplastics as liners for chemical resistance and external FRP armour for strength are also fabricated.

The locations of their manufacturing sites are strategic and well thought of. The nature of the immense size of the products requires good facilities as far as transport is concerned. This is especially so because CPE's major activity is in the field of exports.

Mumbai is the commercial capital of India. A mega metropolitan city, it offers abundant skilled as well as unskilled labour. Again, being a port city it provides added advantages. 

Achievements

At subject, the competence of their design team backed by proven expertise - accumulated and updated over three decades and strengthened with experience in fabrication, has resulted in several "FIRSTS" and "BIGGESTS" to their credit. With this pioneering spirit, they have undertaken many developmental projects.

Through the years subject has received the 'TOP EXPORTER AWARD' many times for FRP products from the PLEXCONCIL sponsored by the Ministry of Commerce, Govt. of India.. They received the first award in 1988-1989, next in 1991-1992 and from 1993 onwards till date, they have retained this distinction.

They design, manufacture and erect Field Storage Tanks, Reaction Vessels, Pressure Vessels, Wet Gas Electrostatic Precipitators, Scrubbing Systems, Exhaust Systems, Polymer Concrete Cells, Process Piping, Gratings, Cable Trays, Linings etc.

Applications
Chemical	Food Processing
Textile	Metallurgical
Pharmaceutical	Mining
Engineering	Paper & pulp
Paints	Railways
Water & WasteWater Treatment	Fertiliser
Pigments and Dyestuff	Nuclear Power Plant

Design

Majority of subject’s products are custom-made conforming to the International standards like:

BS 4994 : 1987
ASTM D 3299 - 81
ASME - Section X
ASME RTP-1-2000
AWWA C950
AD 2000 - Merkblatt N1 g. NBS Voluntary Products Standard, PS 15 – 69

Subject has its own Design department with full-fledged facilities for designing and drafting. These departments are manned by qualified personnel who have abundant experience in their field of work with the latest CAD & FEA programmes.

The MAIN characteristics of thermosets (literally 'setting under heat') is that they require curing, when they undergo a molecular cross-linking process which is irreversible and renders them infusible. They thus offer high thermal stability, plus good rigidity and hardness and resistance to creep. It also means that, once cured, the resin and its laminate cannot be reprocessed, except by methods of chemical break-down, which are currently under active development. For practical purposes, therefore, cured thermosetting resins can be recycled most effectively if ground to fine particles, when they can be incorporated into new laminates, as cost-effective fillers.

Thermosetting resins have little use as pure resin, but require addition of other chemicals to render them processable. For reinforced plastics, the compounds usually comprise a resin system (with curing agents, hardeners, inhibitors, plasticisers) and fillers and or reinforcement. The resin system provides the 'binder', to a large extent dictating the cost, dimensional stability, heat, chemical resistance and basic flammability. The reinforcement can influence these (particularly heat-and dimensional-stability), but the man effect is on tensile strength and toughness. High-performance fibres, of course, have a fundamental influence on cost.

Special fillers and additives can influence mechanical properties, especially for improvement in dimensional stability, but they are mainly used to confer specific properties, such as flame retardancy, UV stability or electrical conductivity.

Thermosetting resins are normally used in the liquid state and solidify and harden on curing. With some resins it is possible to part-cure and then hold the resin in what is termed the B-stage, for the cure to be completed at later time.

FRP Properties

Epoxy
Excellent composite properties. Very good chemical resistance. Good thermal properties. Very good electrical properties. Low shrinkage on curing. Can be B-staged.

Phenolic
Very good thermal properties. Good fire resistance (self-extinguishing). B-stage possible. Good electrical properties.

Polyester
Wide choice of resins; easy to use. Cure at room temperature and elevated temperature. Very good composite properties. Good chemical resistance. Good electrical properties.

Polymide and polyamide-imide

Excellent thermal properties. Good composite properties. Good Electrical Properties. Good fire properties.

Polyurethane
Good composite properties. Very good chemical resistance. Very high toughness (impact). Good abrasion resistance.

Silicone
Very good thermal properties. Excellent chemical resistance. Very good electrical properties. Resistant to hydrolysis, oxidation. Good fire properties (self-extinguishing)-Non-toxic.

Vinylester
Good fatigue resistance. Excellent composite properties. Very good chemical resistance. Good toughness.

Form No. 8

Name of the company	CHEMICAL PROCESS EQUIPMENTS PRIVATE LIMITED
Presented By	Bank of Baroda Corporate Financial Services Branch, 0/12 Mumbai Samachar Marg, Mumbai – 400 023, Mahaarshtra, India
1) Date and description of instrument creating the change	Composite Hypothecation Agreement Dated 20^th December, 2003.
2) Amount secured by the charge/amount owing on the securities of charge	Rs.165.000 Millions By way of cash credit, inland/ Foreign Letter to Credit and Inland/ Foreign Gurantee.
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	The company has hypothecated to the charges in favour of the Bank the following : the whole of he Borrowr’s stocks, both present and future including but without prejudice to the generality of the foregoing words, all stocks of raw materials viz. goods in process, semi finished and finished goods, goods in transit, packing materials and store, etc. whatsoever and wheresoever situate and / or in transit whether now belonging to or that may at nay time during the continuance of this security belonging to the Borrower or that may be held by any party anywhere to the order and disposition of the borrower. All the present and future book debts not exceeding 90 days outstanding monies receivable claims, bills, contracts, engagements and securities which are now due and owing or which may at any time hereafter during the continuance of this security become due and owing to the borrower in the course of the Government of India or any State Government or Indian Railways or any Government Department or office or any Municipal or local or Public or Semi Government body or authority whatsoever including those relating the assets leased out and / or given on hire purchase basis. All the present and future movable machinery, stores, spares, old machinery and new machinery acquired or to be acquired by the Borrower belonging to or that may at any time during the continuance of this security belong to that borrower situated at Borrowers factory, godown, warehouse or wherever else whether belonging to the borrower or rented or that may be held by any party to the order and disposition of the borrower including those in transit.
4) Gist of the terms and conditions and extent and operation of the charge.	To secure the Cash Credit, Inland / Foreign letter of credit and Inland / Foreign Guarantee facilities aggregating to Rs. 165 Millions subject to the exclusive / prior charge created / agreed to the created on the specific items of movable machinery in respect of the Term Loan / Deferred Payment Guarantee facility sanctioned to / availed by the Borrower from any bank or financial institution with the consent of the bank as security by way of first charge for the due payment on demand of the balance due to the bank in respect of account / account of the facilities / accommodation granted to the Borrower by the Bank a aforesaid.
5) Name and Address and description of the person entitled to the charge.	Bank of Baroda, Corporate Financeial Services Branch, 10/12 Mumbai, Samachar Marg, Mumbai – 400023, India
6) Date and brief description of instrument modifying the charge	Supplemental Agreement of Hypothecation of Stocks, Book Debts, Movable Machinery and Other Movables dated 20^th January, 2005 and Memorandum of Entry Relating to extension of Equitable Mortgage Dated 20^th January, 2005 (Both together constituting a single charge)
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	The Bank has sanctioned additional one time adhoc foreign Bank Guarantee upto Rs.7.500 Millions there by increasing the total limit from Rs.165.000 Millions to Rs.172.500 Millions. For due repayment of the said credit facilities by the borrower to the Bank, with interests thereon at the respective agreed rates, additional interests, liquidated damages, premium on repayment or on redemption, costs, charges and other expenses the charge created earlier is modified vide the supplemental agreement of hypothecation of stocks, Book Debts, Movable Machinery and Other Movable Dated 20^th January, 2005, and Memorandum of Entry Relating to extension of Equitable Mortgage Dated 20^th January, 2005.

Fixed assets

· Freehold land

· Flat

· Factory building

· Plant & Machinery

· Air conditioners & heating equipments

· Computers

· Moulds & Dies

· Office equipments

· Electrical fittings

· Transformers

· Cranes

· Forklifts

· Furniture & Fixtures

· Vehicles

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.42.71
UK Pound	1	Rs.85.51
Euro	1	Rs.68.02

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		63

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