MIRA INFORM REPORT

Report Date :

26.03.2008

IDENTIFICATION DETAILS

Name :	MANGANESE ORE INDIA LIMITED
Registered Office :	Moil Bhawan, Moil Chowk, 1-A Katol Road, Nagpur – 440013, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	22.06.1962
Com. Reg. No.:	12398
CIN No.: [Company Identification No.]	U99999MH1962GOI012398
TAN No.: [Tax Deduction & Collection Account No.]	NGPM00664G
Legal Form :	A Public Limited Liability Company. The company’s entire shares are held by the President of India.
Line of Business :	Producer of manganese ores

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 18000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established Government of India Company. It has fine track records of performance and financial status. Trade relations are fair. Payments are correct and as per commitments. The company can be considered good for any normal 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 :	Moil Bhawan, Moil Chowk, 1-A Katol Road, Nagpur – 440013, Maharashtra, India
Tel. No.:	91-712-2590050
E-Mail :	contact@moilind.com
Website :	http://moil.nic.in

DIRECTORS

Name :	Mr. K. L. Mehrotra
Designation :	Chairman-cum-Managing Director
Tel. No.:	91-712-2592070
Fax No.:	91-712-2591871
E-Mail :	cmd@moilind.com
Name :	Mr. M. A. V. Gautam
Designation :	Director (Finance)
Tel. No.:	91-712-2592072
Fax No.:	91-712-2221864
E-Mail :	df@moilind.com
Name :	Mr. C. P. N. Pathak
Designation :	Director (Pr. & Pl.)
Tel. No.:	91-712-2590775
Fax No.:	91-712-2570562
E-Mail :	prod@moilind.com
Name :	Mr. A. K. Mehra
Designation :	Director (Commercial)
Tel. No.:	91-712-2592272
Fax No.:	91-712-2520560
Name :	Mr. A N Palwankar
Designation :	Director
Name :	Mr. Ajoy Kumar
Designation :	Director
Name :	Mr. B B Choudhary
Designation :	Director (Commercial)
Name :	Mr. Devraj Birdi
Designation :	Director
Name :	Mr. M K Moitra
Designation :	Director
Name :	Mr. P P Mathur
Designation :	Director
Name :	Mr. S K Banerjee
Designation :	Director
Name :	Mr. S Manoharan
Designation :	Director
Name :	Mr. S N Padhi
Designation :	Director
Name :	Mr. V K Jairath
Designation :	Director

KEY EXECUTIVES

Name :	Mr. G. P. Kundargi
Designation :	General Manager (Pro. & Div.)
Tel. No.:	91-712-2590153
Fax No.:	91-712-2594171
E-Mail :	gpk@moilind.com
Name :	Mr. V. R. Sengupta
Designation :	General Manager (Personnel)
Tel. No.:	91-712-2590771
Fax No.:	91-712-2593594
Name :	Mr. G. Wangneo
Designation :	General Manager (Tech.)
Tel. No.:	91-712-2590646
Fax No.:	91-712-2593009
E-Mail :	wangneo@moilind.com
Name :	Mr. S.B. Dhar
Designation :	Sr. DGM (System)
Tel. No.:	91-712-2591473
Fax No.:	91-712-2582610
E-Mail :	dhar@moilind.com
Name :	Mr. B Dasgupta
Designation :	Company Secretary

BUSINESS DETAILS

Line of Business :

Producer of manganese ores

GENERAL INFORMATION

Bankers :

State Bank of India, Nagpur

Banking Relations :	Good
Auditors :
Name :	Rodi Dabir and Company Chartered Accountants
Address :	Nagpur, Maharashtra, India

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
100000000	Equity Shares	Rs. 10/- each	Rs. 1000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
28000000	Equity Shares	Rs. 10/- each	Rs. 280.000 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		280.000	153.300	153.300
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		4334.800	3440.500	2522.500
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		4614.800	3593.800	2675.800
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	0.000	0.000
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		4614.800	3593.800	2675.800
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1172.200	549.200	520.500
Capital work-in-progress		0.000	125.600	12.600
INVESTMENT		0.100	0.200	0.200
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	313.200	599.200	485.200
	Sundry Debtors	499.900	455.600	653.700
	Cash & Bank Balances	3214.900	2181.400	1726.800
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	256.700	244.600	122.000
Total Current Assets		4284.700	3480.800	2987.700
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	871.000	585.200	739.300
	Provisions	93.500	110.100	209.000
Total Current Liabilities		964.500	695.300	948.300
Net Current Assets		3320.200	2785.500	2039.400
MISCELLANEOUS EXPENSES		122.300	133.300	103.100
TOTAL		4614.800	3593.800	2675.800

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		4288.500	3341.000	3787.800
Other Income		316.400	224.600	94.700
Total Income		4604.900	3565.600	3882.500
Profit/(Loss) Before Tax		2017.600	1690.100	2022.700
Provision for Taxation		675.500	544.900	753.700
Profit/(Loss) After Tax		1342.100	1145.200	1269.000
Expenditures :
	Raw Materials	123.100	60.100	95.800
	Excise Duty	35.900	39.200	55.400
	Power & Fuel Cost	218.900	192.300	226.400
	Other Manufacturing Expenses	341.600	455.100	461.500
	Employee Cost	947.900	873.700	925.000
	Selling and Administration Expenses	342.100	200.000	194.300
	Miscellaneous Expenses	161.700	83.800	86.700
	Interest & Financial Charges	0.400	0.500	1.300
	Depreciation	123.500	104.700	83.800
	Stock Adjustments	292.200	[110.900]	[234.800]

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	29.15	32.12	32.69
Net Profit Margin (PBT/Sales)	(%)	47.05	50.59	53.40
Return on Total Assets (PBT/Total Assets}	(%)	36.97	41.94	57.66
Return on Investment (ROI) (PBT/Networth)		0.44	0.47	0.76
Debt Equity Ratio (Total Liability/Networth)		0.21	0.19	0.35
Current Ratio (Current Asset/Current Liability)		4.44	5.01	3.15

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Manganese Ore India (MOIL), a Miniratna Public Sector undertaking was originally set up in 1896 as Central Provinces Syndicate which was later taken over by the Central Provinces Manganese Ore Company Limited (CPMO) a British Company incorporated in United Kingdom. It is one of the oldest and largest producer of manganese ores in India and markets various grades and blends of ores to suit individual requirements of consumers particularly for the steel, ferro manganese, dry battery and chemical industries.  

In 1962 Govt.of India reached an agreement with CPMO to take over the assets of CPMO and MOIL was formed with 51% capital held by Govt of India and the State Governments of Maharashtra and Madhya Pradesh and the balance 49% was held by CPMO. 

In 1977 the Govt. of India acquired the balance 49% stake from CPMO and MOIL became 100% Government Company under the administrative control of Ministry of Steel. 

MOIL has got 10 major mines 6 in Maharashtra and 4 in Madhya Pradesh of which 3 are worked by opencast and balance by underground method. 

MOIL is catering nearly 60% of the ferro grade requirement for the Indian Ferro Alloy Industry. 

The Company took the expansion plans relating to value addition to Manganese Ore by establishing Electrolytic Manganese Di Oxide Plant with a capacity to manufacture 1000 Tonnes Per Anum and Ferro Manganese Plant with an installed capacity of 10,000 Tonnes Per Anum.

AS PER WEBSITE

Profile

At present, subject operates 10 mines – six located in the Nagpur and Bhandara districts of Maharashtra and four in the Balaghat district of Madhya Pradesh. All these mines are about a century old. Excepting three, rest of the mines are worked through underground method. The Balaghat Mine is the largest mine of the Company which produces one of the best quality manganese ore in the country is also the deepest underground manganese mine in Asia. The mine has now reached a depth of over 500 meters from the surface. Dongri Buzurg Mine located in the Bhandara district of Maharashtra is the largest opencast mine that produces manganese dioxide ore used by dry battery industry. This ore in the form of manganous oxide is used as micro-nutrient for cattle feed and fertilizers. Subject fulfills about 70% of the total requirement of dioxide ore in India. The total production of manganese ore from all the mines constitutes about 65% of requirement of the country. At present, the annual production is around 0.9 million tonnes which is expected to grow in the coming years. Subject has set up Ferro Manganese Plant (10,000 TPY) and Electrolytic Manganese Dioxide (EMD) Plant (1000 TPY) as per its diversification plan for value addition to manganese ore. Subject is further considering setting up Captive Power Plant, expanding the capacity of ferro manganese plant and setting up a new Silico Manganese Plant to meet the ever increasing demand of the ferro alloys globally.

Subject is also the largest employer in the manganese mining industry with a total work force of about 7000 employees. 

PURCHASE PROCEDURE RELATING TO PURCHASE OF   EQUIPMENTS, SPARE PARTS AND STORES ITEMS.

1. BRIEF INTRODUCTION: Subject is engaged in Mining of Manganese ore from the mines located in the states of Maharashtra and Madhya Pradesh. The Company has two large processing Plants producing Electrolyte Manganese Dioxide and Ferro Manganese. The company requires various equipments, spare parts and store items to carry out the above mining and processing activities. The Company has a Central Purchase Department located at Nagpur. The responsibility of this department are broadly listed below :-

i) To purchase materials for the Company's use within the sanctioned budget most economically, keeping guard, quality and delivery schedules in view

ii) To ensure that supplies are received expeditiously within the stipulated delivery period

iii) To maintain a constant touch with the market condition and the commercial community and explore possibilities of new sources of supply at competitive rates

iv) To maintain proper records, to watch claims of the company on the suppliers due to shortage or defective supplies

v) To process suppliers bill promptly to ensure correct and early payment by A/Cs Department.

vi) To maintain such records of purchase as will facilitate audit and to comply with audit requirements.

2. PROCEDURE FOR PLACING INDENT ON THE CENTRAL PURCHASE DEPARTMENTS.

i) The company has identified various store items and raw materials, which are regularly required. The demand for such items are being compiled by the Production department at Head office. Based on the previous years consumption pattern and the anticipated production, quantities are approved which are required to be procured during the year. Such approved quantities are treated as indent by the Central Purchase Department for the purpose of entering in Annual Rate/Running contract(s).

ii) Items which are not regularly required or which are required in very small quantity and the Spare part(s) are indented by the concerned mine/plant stores after verifying the stock position and taking into account the lead period. Such indents raised to the Production department are scrutinized and technically vetted for the quantity and specification. The indent must accompany with the certificate that the budget provision exist so also administrative approval is obtained from the Competent Authority prior to forwarding the indent to the Central Purchase Department.

iii) In respect of capital items, the Production department obtains administrative approval from the Competent Authority for the items which exist in the Capital budget and such approvals are forwarded to the Central Purchase Department along with the indent duly technically vetted for the specification and quantity.

3. PURCHASE METHOD.

THE CAPITAL EQUIPMENTS, SPARE PARTS, STORE AND OTHER ITEMS ARE PURCHASED THROUGH ANY OF THE FOLLOWING METHODS DEPENDING ON THE SITUATION :-

i. Purchase without quotation and hand quotation.

ii. Single tender.

iii. Limited tender.

iv. Open tender.

v. Firm registered with DGS&D.

vi. Annual Rate contract.

i. PURCHASE WITHOUT QUOTATION OR HAND QUOTATION: Purchase for less than Rs.200/- at a time can be made without quotation but with formal enquiries. Purchases upto Rs.1000/- per item can be made by obtaining through hand quotation. Hand quotation will be collected by a rotation system so as to ensure fair and equitable distribution to all suppliers.

ii. SINGLE TENDER: Whenever proprietory stores items are to be purchased single tender system are resorted to.

iii. LIMITED TENDER: In cases where purchase are of the order of Rs.0.200 Million or less, enquiries are sent to Firms registered with the company or DGS&D. The tender need not be advertised. Enquiry are sent to as many firms as possible to ensure fair competition. In cases where the number of registed firms dealing with stores are large, say more than 8, enquiry are sent by rotation to allow all firms to compete.

The normal limits for sending inquiries under limited tender are :-

a) For Tender upto Rs.25,000/- - 3 parties.

b) For Tender from Rs.25,001/- to Rs.0.100 million - 6 parties.

c) For Tender from Rs.1,00,001/- to Rs. 0.2 million - 8 parties.

Wherever the number of firms dealing with stores is less than the limits prescribed above enquiries are sent to all available firms.

iv. OPEN TENDER: Open tender is invited through open advertisement in papers whenever it is considered necessary and desirable to do so in order to obtain competative rates. Normally open tender are invited where the total value of the tender is more than Rs.0.200 Million. Open Tender documents are issued to the Tenderer on application at a price fixed by Material Department. The period for the submission of tenders after the date of advertisement is clear 21 days but in emergent cases it is curtailed to 15 days.

Sometimes stores confirming to the given specification are not easy to procure. In such cases alternative specification, which may be acceptable are laid down in consultation with Indenting Technical Department.

v. FIRMS REGISTERED WITH D.G.S & D.:

a) Orders can be placed on DGS&D.

b) Direct orders on the firms through rate contract concluded by DGS&D.

vi. ANNUAL RATE CONTRACT: The Central Purchase Department enters into contract with firms on annual rate contract basis with supply spread over one year at specified intervals, in respect of items required, continuously through out the year in large quantities. These contracts are finalised after inviting Limited/Open Tenders as the case may be. The total quantity to be indented are determined on past consumption or anticipated consumption.

vii. EMERGENCY PURCHASE: Emergency purchase are resorted to wherever conditions warranting such action due to break-down or likely break down or stoppage of work for any reason.

viii. REPEAT ORDERS: Repeat order can be placed with the firm against a previous order placed, but in any case not later than 3 months after the supply is completed, provided :-

• That no repeat order is placed if the original order was placed to cover demands.
• The new demand does not exceed 50% of the quantity originally ordered in each case.
• There is no downward trend of the prices since the original order was placed.

4. PROCEDURE ON ISSUE OF LIMITED/OPEN TENDERS AND OPENING THEREOF:

i) In case of limited enquiries the name of the firms to whom the enquiries are addressed is entered in the Register to watch the disposal. This register is maintained in the Purchase Department. All the Officers present at the time of opening the tenders sign the register.

5. DELAYED & LATE TENDERS:

i) All tenders whether Open or Limited are opened at the stipulated time and place stated in the enquiry letter unless the date is extended by a similar notice or individual intimation as was given at the call of the initial tender.

ii) DELAYED TENDERS: Delayed Tenders are those which are posted at least one day prior to the due date of closing of the tender but received after the closing date and time. Such (delayed) tender received upto the 3rd day (excluding the date of tender opening) may be considered only if the response is not enough. Justification for considering delayed tender(s) are to be clearly recorded in Tender Process Committee's recommendations. Tenders qualifying to be classified as 'delayed' with reference to the time limits prescribed above but not considered by the TPC and/or tenders received after the above prescribed time limit though may have been posted in time, are returned to the parties concerned, unopened, under Registered Post.

iii) LATE TENDER: Late tenders are those which are posted and received after due date/time of opening. A tender posted on the same day on which the tender is due to be opened, but not received before due time, will also be considered as a late offer. Late tenders should not be considered. After finalization of tenders, late tenders if any received, are returned to the party concerned unopened by Registered Post. However, a late tender may be considered if it is against "Single Tender" enquiry, that too with CMD's prior approval.

6. ACTION ON TENDER

The tenders received by hand or by post are put in the locked Tender Box specially prepared and maintained for the purpose.

Tenders are opened by a team of officers in the presence of such of the representative of the tenderer at the stipulated place, date and time. The officers present for opening the tender intials under date, each and every page of the tender as well as the cover and encircle the quotation. A list of the tenderers or their representatives present are prepared and their signature obtained.

If there is any cutting, over writing or erasing that is stated and signed by the officers. The tenders are given serial number as below. If suppose the total number of tender received are 8 in numbers the tenders will be numbered as 1/8, 2/8, 3/8 and so on the last being 8/8. All delayed tenders should be marked and indicated seperately. The samples received along with the quotations are also signed by the officers. If the samples could not be signed then those samples should be sealed with the label mentioning the name of the firm and initialed.

ACTION ON SINGLE TENDER:

Before a comparative statement is prepared, following preliminary checks are exercised.

(i) Nature of Tender called for:-

(a) Open or Limited - If limited tenders are called for where open tender were necessary - whether it was done with proper authority.

(b) whether it is a first call for tenders or second call.

(ii) Dates and name of the News-papers and other agencies by which the tenders were published.

(iii) Time allowed for submission of tenders.

(iv) No. of tenders papers sold and No. of tenders received.

(v) Place, date and time of opening tenders. After this initial scrutiny a comparative statement is to be prepared in the standard form prescribed for this purpose. All details required will be entered in the statement. It is ensured that the rates mentioned in the comparative statement are in one unit so that comparison can be made at a glance. It is also indicated whether the quotation is inclusive of all taxes and F.O.R. destination or F.O.R. place of despatch. Any other condition put forth by the tenderer such as packing charges etc. and its impact on the interest of the company financially, time-wise or otherwise are also indicated.

Care is taken in preparing this statement and to ensure that entries are comparable. The entries are to be made from the original tenders and other relevant papers. Purchase Department will satisfy itself about the correctness of the comparative statement by initialing on each page by the officer in token of his having scrutinised it. If corrections become necessary the figures should be neatly recorded through and new (correct) figures entered. Each and every corrections shall be attested by the officer who checked the Comparative Statement. This Comparative Statement is checked up by Accounts Department before it is presented to Tender Committee of the Purchase Department. All these procedure are done on priority basis so that the Tender Committee has sufficient time to decide on the issue.

7. TENDER COMMITTEE

The senior most member of the Tender Committee is made the convenor for the Tender Committee and it is his responsibility to ensure that the work of the Committee is completed within the period of validity of the offer to enable time for sanction of Competent Authority and placement of order. In cases where the delay become unavoidable the convenor advises the Purchase Department to seek from the parties their written consent, to extend the period of validity. Where a higher value tender is recommended, adequate reasons in support of the recommendation will be recorded.

It should be the fundamental principle that a quotation which is considered to be high is not accepted until all possible efforts to obtain a more favourable quotation have failed. Negotiation will be undertaken after the Tender Committee's recommendation in this regard has been accepted by the Competent Authority.

When a particular tender has been accepted by the Competent Authority, the communication accepting the tender is issued in the prescribed purchase order. The in-operative clause are struck and fresh clause if any are added. The Purchases Order/A.T. shall be signed by the authorised person of Purchase Department.

8. C.V.C DIRECTIVES.

Implementation of CVC directives as issued in the following circulars are being adhered :-

1. Circular No.8(i)(h)/98(1) dated 18.11.98: Improving vigilance administration-Banning post tender negotiation except with L1.

2. Circular No.98/ORD/1 dated 15.03.99: Improving vigilance administration- Tenders.

3. Circular No.3(v)/99/9 dated 01.10.2000 : Applicability of CVC instruction of post tender negotiation to projects of the world bank and other international funding agencies.

4. Circular No.98/ORD/1 dated 24.08.2000 : Improving vigilance administration- Tenders.

The Company is adhered to purchase preference policy for products and services of Central Public Enterprises as laid down by the Govt. of India, Heavy Industries and Public Enterprises. Department of Public Enterprises vide their circular No.DPE/13(3)/2000-Fin/GL-30 dated 14.9.2000.

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.40.12
UK Pound	1	Rs.79.95
Euro	1	Rs.62.41

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	YES
--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

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