MIRA INFORM REPORT

Report Date :

07.03.2008

IDENTIFICATION DETAILS

Name :	SPICER INDIA LIMITED
Registered Office :	29, Milestone, Pune Nashik Highway, Village Kuruli Taluka Khed, Pune – 410501, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	29.07.1993
Com. Reg. No.:	25-73227
CIN No.: [Company Identification No.]	U34300MH1993PLC073227
TAN No.: [Tax Deduction & Collection Account No.]	PNES11424A
PAN No.: [Permanent Account No.]	AAECS1869C
Legal Form :	It is a closely held public limited liability company
Line of Business :	Designing, Manufacturing, Assembling, Contract for Buying, Selling, Hiring, Exporting, Importing, Distributing and Dealing in all types of universal joints, axles, transfer cases, drive shafts and components thereof for automotive applications whether in finished or semi-finished forms.

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 5400000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are fair. General financial position is satisfactory. Payments are usually correct and as per commitments. Nothing adverse reported. The company can be considered normal for business dealings at usual trade terms and conditions. It can be regarded as a promising business partner in a medium to long – run.

LOCATIONS

Registered Office :	29, Milestone, Pune Nashik Highway, Village Kuruli Taluka Khed, Pune – 410501, Maharashtra, India
Tel. No.:	91-20-24102501/ 02 / 03/ 04 / 05 / 562501
Fax No.:	91-2135-252229/24120516 / 562516
E-Mail :	shrikantchoudhary@dana.com subhashgupta@dana.com mahendra.goyal@dana.com
Website :	http://www.dana.com
Corporate Office:	Survey No. 24/P and 29 /9 Village, Jodalli – 580 114, Karnataka, India
Factory :	· Village, Jodalli, Taluka Kalghatgi, District Dharwad, Jodalli - 580 114, Karnataka Tel. No. 91-836-2310482/3 Fax. No. 91-836-2310481 · Plot 144, Sipcot Industrial Comples, Phase – I, Hosur - 635126, Tamilnadu Tel. No. 91-4344-277026 Fax. No. 91-4344-277803 · Gat No. 74/A, Tulja Bhavani Industrial Estate, Near to Additional M. I. D. C. Karandwadi, Satara –415004, Maharashtra Tel. No. 91-2162-246503/4/6 Fax. No. 91-2162-246505 · 622-626, Kuruli - 410 501, Chakan, Pune, Maharashtra Tel. No. 91-2135-252228

DIRECTORS

Name :	Mr. Deepak Chand Anand
Designation :	Chairman
Address :	1, Sri Aurobindo Marg, Hauz Khas, New Delhi - 110 016
Date of Birth/Age :	26/08/1933
Date of Appointment :	29/07/1993
Name :	Mr. Chandrakant Somabhai Patel
Designation :	Managing Director
Address :	A-1, Srirang Heavens, Pimplesh Saudagar Road, Anudh Camp, Pune - 411 027, Maharashtra
Date of Birth/Age :	10/09/1939
Date of Appointment :	20/01/2001
Profile :	Mr. C. S. Patel has a MS in Industrial Engineering from University of Minnesola and a MBA from the University of Detroit. He served with Ford Motor Company, USA for a period of five years before returning to India. Mr. Patel has held several assignments of increasing responsibility in Anand Group since 1974 especially as President of Human Resources and Business Development. Mr. Patel has spearheaded the operations of Spicer India Limited as Managing Director and greenfielded Driveshaft factories and Axle Plant. Presently, he is Chief Operating Officer of Anand Group
Name :	Mr. Sanjay Saksena
Designation :	Director
Address :	103 Bahunia, Nyati Estate, Off NIBM Road, Pune – 411001, Maharashtra
Date of Birth/Age :	02/01/1962
Date of Appointment :	27/09/2005
Name :	Mr. Dennis John Greenwald
Designation :	Director
Address :	3475, Shadywood Road, Lambert Ville, Michigan, USA – 48144
Date of Birth/Age :	31/01/1947
Date of Appointment :	27/09/2005
Name :	Mr. Erine Johnson
Designation :	Director
Address :	Wingarte, Orchard, 25.3 Km. Palem – Gurgaon Road, Dundhara, Gurgaon, Haryana – 122001
Date of Birth/Age :	14/03/1952
Date of Appointment :	30/06/2003
Name :	Mr. Prakash Bhalekar
Designation :	Director
Address :	15 – 16 Anand Farm, Anfilco Colony, Dundahera, Gurgaon – 122001, Haryana
Date of Birth/Age :	09/12/1968
Date of Appointment :	27/02/2004
Name :	Mr. Daniel Thomas Cavanagh
Designation :	Director
Address :	7701 Blg Bend Ct., Sylvania, Ohio, U.S.A.
Date of Birth/Age :	22/06/1961
Date of Appointment :	27/09/2005
Name :	Mr. Krishnamurthy Naga Subramaniam
Designation :	Director
Address :	13-14, Anfilco Colony, 25.3 Km, Palam - Gurgaon Road, Dundhara, Gurgaon, Haryana – 122001
Date of Birth/Age :	15/07/1953
Date of Appointment :	27/09/2005
Name :	Mr. Deepak Chopra
Designation :	Director
Address :	7 & 8, Anfilco Housing Colony, Palam Gurgaon Road, Dundhara, Gurgaon – 122001, Haryana
Date of Birth/Age :	15/12/1954
Date of Appointment :	27/09/2005
Name :	Mr. Thomas R. Stone
Designation :	Director
Address :	332E, Front Street, Perrysburg, Ohio, U.S.A.
Date of Birth/Age :	12.06.1952
Date of Appointment :	27.09.2005
Name :	Mr. K. Mohan
Designation :	Director
Address :	A – 407, Casaansal, 18 B G Road, Bangalore – 560076, Karnataka, India
Date of Birth/Age :	17.03.1948
Date of Appointment :	21.12.2005
Name :	Mr. Ernest Albert Johnson
Designation :	Director
Address :	Blacksmith Lodge, Main Street, Grand Borough, Rugby CV 238DO , United Kingdom
Date of Birth/Age :	14.03.1952
Date of Appointment :	30.06.2003
Name :	Mr. Margot Lee Hoffman
Designation :	Director
Address :	6368 Champions DR Westerville Ohio – 43082, USA
Date of Birth/Age :	27.07.1962
Date of Appointment :	29.03.2007
Name :	Mr. Ismael Jose Melgar
Designation :	Director
Address :	Holland Ohio - 43528, USA
Date of Birth/Age :	12.07.1947
Date of Appointment :	29.06.2002
Name :	Mr. Karl Alfred Nitsch
Designation :	Director
Address :	LA Pilerriere, C – 1029, Villars – Ste – Croix
Date of Birth/Age :	15.01.1951
Date of Appointment :	29.06.2002
Date of Ceasing:	27.09.2005
Name :	Mr. Cornelia Langenstadt Vonkuensberg
Designation :	Director
Address :	Switzerland
Date of Birth/Age :	18.03.1965
Date of Appointment :	25.07.2003
Date of Ceasing:	27.09.2005
Name :	Mr. Ernie Johnson
Designation :	Director
Address :	Wingarte Orchard St NN 11, Sex, UK
Date of Birth/Age :	14.03.1952
Date of Appointment :	30.06.2003
Name :	Mr. Prakash Bhalekar
Designation :	Director
Address :	15-16 Anand Farm Anfilco Colony Dundahera Gurgaon – 122 001, Haryana, India
Date of Birth/Age :	09.12.1968
Date of Appointment :	27.02.2004
Name :	Mr. Deepak Chopra
Designation :	Director
Address :	Anfilco Colony, 25.3KM Palam Gurgaon Road, Dundhera, Gurgaon – 122 001, Haryana, India
Date of Birth/Age :	15.12.1954
Date of Appointment :	27.09.2005

KEY EXECUTIVES

Name :	Mr. Mahendra Kumar Goyal
Designation :	Secretary
Address :	Flat 7, Building CB, 2^nd Floor, Clarion Park, Aundh, Pune – 411007, Maharashtra, India
Date of Birth/Age :	01.11.1969
Date of Appointment :	09.06.2005
Name :	Mr. Mahendra Goyal
Designation :	Secretary
Address :	503 Building B Sylan Heights Sanewadi Pune – 411 007, Maharashtra, India
Date of Birth/Age :	01.11.1969
Date of Appointment :	09.06.2005

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders		No. of Shares
Dana Corporation		81416300
Anand Technology Resource Park Private Limited		6133491
Asia Investments Limited		21150205
Mr. Pravesh Kumar Srivastava		1
Mr. Chandrakant Somabhai Patel		1
Mr. Subhash C Gupta		1
Mr. Deepak Chopra		1
	Total	108700000

Equity Shares Breakup (Percentage of Total Equity):

Sr No.	Category	Percentage
1	Foreign holdings (Foreign institutional investors ) foreign companies foreign financial institutions , non residents or Overseas corporate bodies or others	74.90
2	Bodies corporate	25.10
	Total	100.00

BUSINESS DETAILS

Line of Business :

Designing, Manufacturing, Assembling, Contract for Buying, Selling, Hiring, Exporting, Importing, Distributing and Dealing in all types of universal joints, axles, transfer cases, drive shafts and components thereof for automotive applications whether in finished or semi-finished forms.

Products :

Item Code No.	Product Description
8708.99.8080	Axles
8708.99.8080	Propeller Shafts Assembly
8708.99.8080	Yokes

PRODUCTION STATUS (as on 31.03.2006):-

Particulars	Unit	Installed Capacity [ Per Annum]	Actual Production
Yokes	Nos.	3000000	2542459
Companion Flange	Nos.	500000	479257
V J Kits	Nos.	600000	36864
Propeller Shaft Assembly	Nos.	350000	617547
Axles	Nos.	150000	89203

GENERAL INFORMATION

Suppliers :	Ø Naveen Engineering Ø Amba Engineering Work Ø Vijaylaxmi Gears Ø Shardha Tools & Dies Ø Avi Auto Riders Private Limited Ø Mantri Metalics Limited Ø Phoenix Sheet Converters Ø Siddhi Forge Limited Ø Water Treatment Services Ø Surnedra Forgings Limited Ø Wire Rings Ø Akshay Pressings
No. of Employees :	2000
Bankers :	· Deutshe Bank · Bank of Nova Scotia Mittal Towers, 'B' Wing, Nariman Point, Mumbai - 400 021 · Standard Charted Grindlays Bank Limited · HDFC Bank Limited HDFC Bank House Senapati Bapat Marg, Lower Parel , Mumbai – 400 013, Maharashtra, India
Facilities :	Secured Loans : Loans from Financial Institutions : Rs. 0.080 million
Banking Relations :	Satisfactory
Auditors :
Name :	Price Waterhouse Chartered Accountants
Address 1:	252, Veer Savarkar Marg, Dadar, Mumbai – 400028, Maharashtra, India
Address 2:	305-311, Century Arcade, 243-244, B / 2, 149, Narangibaug Road, Off Boat Club Road, Pune – 411 001, Maharashtra, India
PAN No.:	AAEFP3641G
Holding Company :	Dana Corporation P. O. Box 1000, Toledo, OH 43697, USA Tel. No. 419 535 4500 Subject is one of the world's largest suppliers of components, modules and complete systems to global vehicle manufacturers and their related after markets. Founded in 1904 and based in Tolledo, Ohio, subject operates some 300 major facilities in 35 countries and employs more than 75000 people. It reported sales of US $ 12.3 billions in the year 2000.
Subsidiaries :	Ø ROC Keeper, Taiwan Ø Dana Global Logistics Limited Ø Dana Spicer (Thailand) Limited Ø Dana Italia SPA Ø Dana Spicer Axle Europe Ø Dana Spicer Axle Carden SA Ø Dana India Private Limited Ø Spicer Assembly Plant U.K. Ø Spicer France Ø Spicer Australia Ø Spicer Italy Ø Spicer Germany Ø Dana Technical Centre [GITC], U.S.A. Ø Spicer Axle South Africa

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
109000000	Equity Shares	Rs. 10/- each	Rs. 1090.000 millions
100000	Preference Shares	Rs. 100/- each	Rs. 10.000 millions
	TOTAL		Rs. 350.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
108700000	Equity Shares	Rs. 10/- each	Rs. 1087.000 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		1087.000	1087.000	1087.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		264.341	57.378	3.886
4] (Accumulated Losses)		0.000	0.000	[171.872]
NETWORTH		1351.341	1144.378	919.014
LOAN FUNDS
1] Secured Loans		0.552	0.706	0.080
2] Unsecured Loans		22.008	33.189	52.762
TOTAL BORROWING		22.560	33.895	52.842
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		1373.901	1178.273	971.856
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		736.817	749.983	800.810
Capital work-in-progress		77.412	50.712	26.820
INVESTMENT		26.012	26.012	0.012
DEFERREX TAX ASSETS		30.293	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	424.776	339.051	268.765
	Sundry Debtors	851.010	684.490	576.769
	Cash & Bank Balances	704.100	513.554	235.294
	Other Current Assets	4.215	4.758	52.303
	Loans & Advances	163.027	254.255	164.413
Total Current Assets		2147.128	1796.108	1297.544
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	1506.776	1305.357	1114.093
	Provisions	136.985	139.717	40.188
Total Current Liabilities		1643.761	1445.074	1154.281
Net Current Assets		503.367	351.034	143.263
MISCELLANEOUS EXPENSES		0.000	0.532	0.951
TOTAL		1373.901	1178.273	971.856

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		5696.502	4116.895	3291.789
Other Income		144.655	139.454	144.538
Total Income		5841.157	4256.349	3436.327
Profit/(Loss) Before Tax		534.651	344.989	210.466
Provision for Taxation		63.790	55.722	88.277
Profit/(Loss) After Tax		470.861	289.267	122.189
Export Value		1677.929	1336.096	1036.620
Import Value		0.000	0.000	481.230
Expenditures :
	Raw Material Consumed	3728.039	2584.572	2098.222
	Purchases made for re-sale	1.361	3.630	0.000
	Consumption of stores and spares parts	278.375	230.441	[33.945]
	Increase/(Decrease) in Finished Goods	[33.945]	[46.144]	0.000
	Salaries, Wages, Bonus, etc.	159.769	123.983	128.162
	Managerial Remuneration	4.986	5.534	3.966
	Payment to Auditors	2.221	2.085	2.020
	Interest	0.076	1.692	3.599
	Insurance Expenses	6.362	6.012	5.687
	Power & Fuel	61.068	47.767	39.865
	Depreciation & Amortization	122.848	121.752	0.000
	Other Expenditure	975.343	830.033	944.338
Total Expenditure		5306.503	3911.357	3225.859

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	8.06	6.79	3.55
Net Profit Margin (PBT/Sales)	(%)	9.39	8.37	6.12
Return on Total Assets (PBT/Total Assets}	(%)	18.05	13.28	10.03
Return on Investment (ROI) (PBT/Networth)		0.39	0.30	0.22
Debt Equity Ratio (Total Liability/Networth)		1.23	1.29	1.31
Current Ratio (Current Asset/Current Liability)		1.31	1.24	1.12

LOCAL AGENCY FURTHER INFORMATION

BUSINESS

Subject is engaged in the business as designing, manufacturing, assembling, buying, selling, hiring, exporting, importing, distributing and dealing in all types of universal joints, axles, transfer cases, drive shafts and components thereof for automotive applications whether in finished or semi-finished forms.

Dana, USA is the world leader in Auto component manufacturing. The company in 1904 invented the Universal Joint. Since then Dana is leading the technology in propeller shafts worldwide. Dana is having around 500 facilities in 33 countries.

Anand Group, the Indian partner, is a leading manufacturer of a wide range of automotive components in India. The Group was established in 1961, and consists of 19 multi-location Companies, employing 4,000 people. The Group is a supplier of components to virtually every vehicle and engine manufacturer in India. The relationship of Dana with Anand is built over last 40 years and they are partners in India on many products including Brakes, Piston Rings and Gaskets.

The company was founded in 1993 to manufacture Drive shafts and Axles in India. During 2000, Company's Sales was nearly $35 Million. Company has two Divisions. Axle Division and Drive shaft Division.

Axle Division is located at Chakan in Pune, Maharashtra State, where Axle components are manufactured, assembled into Axles and supplied to the OE customers for vehicle fitment.

Drive shaft Division has 2 Operating Plants. Jodalli Plant near Hubli in Karnataka State manufactures components and Satara Plant, in Maharashtra State assembles the components into Drive shafts and supplies to the OE customers for vehicle fitment. The Division Office as well as the Corporate Office is located at Chakan, Maharashtra, along with the Axle Division office and Axle Plant.

Driveshaft Component Plant at Jodalli, Karnataka, meets the entire requirement of components both for domestic as well as for export. More than 50% of production capacity of this plant is currently exported to Dana plants in USA, UK, France, Australia, Mexico and Canada.

The company’s globally standard parts are common for Domestic and Export. It provides us opportunity to serve its domestic customers with the same products, which get fitted on Ford and GM trucks.

All facilities of the company have QS-9000 Certification. The company has also secured ISO 14001 Certification for environment protection system and OHSAS 18001 certification for health and safety assurance system. The company may be the first Auto component manufacturing company in India, securing all above certificates

Product Features for drive shaft

Superior features of Spicer Propeller Shafts include :

Ø Glidecoated Tube Shaft to reduce friction and increase wear life of Slip Joint and Centre Bearing.

Ø Better balanced and lightweight shafts with Half Round End Yoke design, which also reduce assembly / dismantling time and increase servicing efficiency in Field.

Ø Superior Universal Joint, having metal backed seals, cold formed bearing cups with crowning, radius - ground trunnions for enhanced life and better seal fitting.

Ø Centre Bearings specially designed for Propeller Shaft application and greased for life at factory. Design incorporates double race bearing, land-riding seals for improved grease retention and honeycomb rubber design to reduce vibrations and noise transmission.

The company is in trade terms with :

· A. G. Plast

· Accurate Products

· Akshay Pressing

· Beejay Engineers, Hubli

· Creative Metal Craft

· Delux Engineering, Mumbai

· Dynam Pressing, Pune

· Gaurav Engineers, Pune

· Hindustan Gears Private Limited, Hubli

· Innovative Concepts, Dharwad

· Nichrome, Hubli

· SMG Industries, Hubli

· Suri Inudstries, Hubli

· Udit Packaging Private Limited, Pune

· Wire Rings, Mumbai

Fixed Assets :

· Freehold Land,

· Leasehold Land,

· Buildings,

· Plant and Machinery,

· Furniture and Fixtures,

· Office Equipments,

· Computers and

· Vehicles.

FORM 8:-

Name of the company	SPICER INDIA LIMITED
Presented By	Mr. C. S. Patel, Managing Director
1) Date and description of instrument creating the change	Unattested Deed of Hypothecation of Stocks and Book Debts dated 02.11.1998
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 180.000 millions
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	Hypothecation of company’s all present and future moveable current assets comprising of : [a] Stock – in – trade including stocks of raw materials, goods-in-process, semi-finished and finished goods, consumable stores, spares; [b] Book debts, outstanding, monies receivable, claims, bills, contracts, engagements and securities
4) Gist of the terms and conditions and extent and operation of the charge.	Interest Rate : Deutsche Bank Prime Lending Rate [DBPLR] Repayment : Repayable on Demand Charge created as security for the credit facilities of Overdraft / Short Term Loan, Pre-Export Advance / Export Bill Purchased, Import / Inland usance Letter of Credit and Customs / Excise Guarantees totally aggregating to Rs. 180.000 millions
5) Name and Address and description of the person entitled to the charge.	Deutsche Bank Hazarimal Somani Marg, Fort, Mumbai – 400001
6) Date and brief description of instrument modifying the charge	First Supplemental Deed of Hypothecation of stocks & book debts dated 03.10.2000
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.	a. The amount of charge increased from Rs. 180.000 millions to Rs. 210.000 millions b. Amount of credit facilities increased by the Bank from Rs. 180.000 millions to Rs. 210.000 millions

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.40.53
UK Pound	1	Rs.81.54
Euro	1	Rs.62.40

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--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	YES
--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/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
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