MIRA INFORM REPORT

Report Date :

06.10.2008

IDENTIFICATION DETAILS

Name :	NOSCH LABS PRIVATE LIMITED
Registered Office :	Flat No. 201 & 202, Bhanu Enclave, Sunder Nagar, Erragadda, Hyderabad – 500 038, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	02.08.2001
Com. Reg. No.:	037086
CIN No.: [Company Identification No.]	U24231AP2001PTC037086
TAN No.: [Tax Deduction & Collection Account No.]	HYDN00704E
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturers and Exporters of Bulk Drugs and Intermediates.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 909784
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company having satisfactory track. Profit margin is under pressure. Trade relations are fair. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

INFORMATION PARTED BY

Name :	Mr.K.U.Kpeckly
Designation :	Accountant
Date :	25.09.2008

LOCATIONS

Registered Office :	Flat No. 201 & 202, Bhanu Enclave, 7-1-638 to 643/1, Sunder Nagar, Erragadda, Hyderabad – 500 038, Andhra Pradesh, India
Tel. No.:	91- 40-23818065 / 23704075 / 23818059 / 23818068
Fax No.:	91-40-23818059
E-Mail :	hyd2_nosch@sancharnet.in vasanth@noschlabs.net dadda@noschlabs.net gpc@noschlabs.net noschlaba@noschlabs.net
Website :	http://www.noschlabs.com www.noschlabs.net www.indiamart.com/noschlabs
Location :	Rented
Factory 1 :	Bonthapally, Hyderabad, Andhra Pradesh, India
Location :	Owned
Factory 2 :	5-5-35/33/3, Prashanthi Nagar, IDA, Kukatpally, Hyderabad – 500 072, Andhra Pradesh, India
Location :	Owned
Factory 3:	Survey No.14, IDA Gadda Potharam Village, Kazipally Jinnaram, Medak District, Andhra Pradesh-500319, India
Location :	Owned

DIRECTORS

Name :	Dr. Bhimireddy Satyanarayana Reddy
Designation :	Managing Director
Address :	Plot No. 10 B, Srinivasa Nagar Medical Society, Water Tank Lane, Kukatpally, Hyderabad, Rangareddy, Andhra Pradesh – 500072
Qualification :	P.H.D
Date of Birth :	14.01.1964
Date of Casing :	01.10.2006
Date of Appointment :	01.10.2001
Name :	Mr. Desireddy Kesava Reddy
Designation :	Whole Time Director
Address :	Flat No. T 1, plot No. 144, OM Shakti Towers, Moti Nagar, Erragadda, Hyderabad, Rangareddy, Andhra Pradesh – 500072
Date of Birth :	02.06.1960
Date of Casing :	27.06.2005
Date of Appointment :	01.10.2001
Name :	Mr. Dodda Vera Venkata Satyanarayana Reddy
Designation :	Director
Address :	A / Pujithaapts, Sunder Nagar, Hyderabad, Rangareddy, Andhra Pradesh – 500038
Date of Birth :	10.06.1917
Date of Appointment :	01.10.2001
Name :	Mr. Tummuru Rajasekhar Reddy
Designation :	Whole Time Director
Address :	Plot No. 15 B, Srinivasa Nagar Medical Society, Water Tank Lane, Kukatpally, Hyderabad, Rangareddy, Andhra Pradesh – 500072
Date of Birth :	19.02.1973
Date of Appointment :	01.10.2001
Name :	Ch. Venkata Nageswara Rao
Designation :	Director
Address :	Plot No. 1, Sirishaapts, Yellareddyguda, Hyderabad, Rangareddy, Andhra Pradesh – 500073
Date of Birth:	15.10.1948
Date of Casing :	15.09.2003
Date of Appointment :	21.02.2003
Name:	Mr.Gustavo Daniel Lorenzo Pelizzari, Foreigner
Designation :	Director
Address :	Calle Costa Brava, 24, Madrid - 28034
Date of Birth :	07.09.1972
Date of Appointment :	22.06.2006
Name:	Ms. Lsabel Alcalde Giraudo, Foreigner
Designation :	Director
Address :	Calle Nueva 16, Las Rozas, Madrid - 28231
Date of Birth :	07.08.1969
Date of Appointment :	22.06.2006

KEY EXECUTIVES

Name :	Mr.B Sathya Reddy
Designation :	Company Secretary
Name:	Mr.G. P. Chowdhury
Designation :	General Manager (Marketing)

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
Dr. Bhimireddy Satyanarayana Reddy	225000
Mr. Tummuru Rajasekhar Reddy	93750
Mr. Dodda Vera Venkata Satyanarayana Reddy	116750
Bhimireddy Vijayalakshmi	45000
Mr. Bhimireddy Goutham Reddy	15000
Mr. Bhimireddy Vivek Reddy	15000
Mr. Bhimireddy Gopi Reddy	7500
Mr. Bhimireddy Kanthamma Reddy	7500
Mr. Tummuru Rajasekhar Reddy	30000
Tummuru Radhadevi	33750
Mr. Tummuru Venkatarami Reddy	30000
Mr. Tummuru Avinash Reddy	15000
Dodda Madhavi	33750
Dodda Vijaya Spandana	29500
Konda Dayakar Reddy	3000
Appala Ramprasad	7500
Mandapati Satyanrayaa A Reddy	7500
Mandapati Shobarani	7500
Mandapati Krishina Reddy	1875
Attunuri Nivasa Reddy	1875
Bhimireddy China Krishna Reddy	1875
Attunuri Venkata Reddy	1875
Dodda Vijay Samhita	16250
Gali Pradeep Chodhyry	1500
Kanubadhula Sangeetha	1000
Chennareddy Sasidhar Reddy	750
Desireddy Umadevi	15000
Miryala Srinivasa Rao	2250
Danda Venkatrami Reddy	4500
Mandapati Malavika	7500
Mandapati Sushma	11250
Gaddam Srinivasa Reddy	3000
Chilukuri Sridhareddy	3000
Bhimireddy Srinivasa Reddy	3000
Munnagi Kishore Reddy	3000
Mahadeva Veera Bhramha Chary	4500
Bhimireddy Satyanarayana Reddy	3750
Verram lavanya	7500
Verram Bharat Reddy	11250
Bhimireddy Anitha	6250
Desireddy Dhamani	12500
Desireddy Umadevi	7500
Bhimireddy Krishnareddy	25000
Desireddy Neehareddy	15000
Desireddy Kesavareddy	25000
Mandapati Kishorereddy	15000
Desireddy Dhamani	7250
Desireddy Kesavareddy	47500
Desireddy Kesavareddy	2500
Mandapati Kishoreddy	7500
Bhireddy Krishnareddy	12500
Desireddy Neehareddy	7500

Category	Percentage
Foreign holding(Foreign institutional investor(s),Foreign Companies(s), Foreign financial institution(s), Non-resident indian(s), or Overseas corporate bodies or other	40.00
Directors or relatives of directors	60.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers and Exporters of Bulk Drugs and Intermediates.

Products :

Product Description	ITC Code No:
Bulk Drugs and Intermediates	2942.00

• List of active pharmaceutical Ingredients
• Semi – Finished Formulations
• Intermediate Chemicals

Exports :

Countries :

v European Countries

Imports :

Countries :

v South Korea

v Europe

Terms :

Selling :

LC,Credit ,T/T

Purchasing :

LC

PRODUCTION STATUS

Particulars	Installed Capacity	Actual Production
Bulk Drugs and Intermediates (Manufactured goods)	150 MT (varies based on product Mix as certified by Management)	133963.83 Kgs
Formulations	--	9057600

GENERAL INFORMATION

Suppliers :

• Sri Chavadi Pharma Private Limited
• S S Pharma Chem
• Ankar Engineers and Fabrication
• Suyash Organics Private Limited
• Prabhat Chemi Pharma Limited
• Nouveaw Exports Private Limited
• R A Chem Pharma Limited
• Archimedis Laboratories Private Limited

Customers :

• End Users (Traders)

No. of Employees :

200 ( in office + in factory)

Bankers :

• UTI Bank, Begumpet, Hyderabad, Andhra Pradesh, India
• Axis Bank Limited, Begumpet Branch, Hyderabad - 500016

Facilities :

Particulars	31.03.2005 Rs. in millions
SECURED LOANS
Hire Purchase Loans	1.303
OCC with UTI Bank	25.732
Term Loans with UTI Bank	24.000
TOTAL	51.035

Banking Relations :	Satisfactory
Auditors :	Suryanarayana Reddy & Company Chartered Accountants
Address :	D No. 8-3-941, Flat No. 504, Vijayashree Apartments, Opposite Kamma Sangam, Ameerpet, Hyderabad – 500073, Andhra Pradesh, India
	P S N Ravishankar and Associates Chartered Accountants
Address:	Flat No. 205, Second Floor, B-Block, Khushal Towers, Khiratabad, Hyderabad – 500004, Andhra Pradesh, India
Tel No.:	91-40-23320558/23393381
Fax No.:	91-40-23393381
Email:	psnra@yahoo.com
Associates/Subsidiaries :	Nil

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1500000	Equity shares	Rs.10/-	Rs.15.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
1333333	Equity shares	Rs.10/-	Rs.13.333 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		13.333	8.000	8.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		214.113	64.497	37.376
4] (Accumulated Losses)		0.0000	0.000	0.000
NETWORTH		227.446	72.497	45.376
LOAN FUNDS
1] Secured Loans		49.853	68.829	51.035
2] Unsecured Loans		0.000	0.000	2.650
TOTAL BORROWING		49.853	68.829	53.685
DEFERRED TAX LIABILITIES		12.209	8.769	5.658
TOTAL		289.508	150.095	104.719
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		106.702	84.907	77.742
Capital work-in-progress		15.478	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	92.537	67.385	41.366
	Sundry Debtors	164.415	121.586	57.868
	Cash & Bank Balances	24.587	2.523	1.396
	Other Current Assets	24.219	32.046	0.000
	Loans & Advances	2.663	4.735	23.033
Total Current Assets		308.421	228.275	123.663
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	119.449	137.882	91.713
	Provisions	21.657	25.242	5.043
Total Current Liabilities		141.106	163.124	96.756
Net Current Assets		167.317	65.151	26.907
MISCELLANEOUS EXPENSES		0.010	0.036	0.070
TOTAL		289.508	150.095	104.719

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		615.147	526.095	345.643
Other Income		17.450	0.000	0.000
Total Income		632.597	526.095	345.643
Profit/(Loss) Before Tax		99.479	54.053	20.690
Provision for Taxation		24.772	18.810	7.429
Profit/(Loss) After Tax		74.707	35.243	13.261
Earnings in Foreign Currency :
	Export Earnings	373.469	258.967	104.560
	Commission Earnings	0.000	0.000	0.000
	Other Earnings	0.020	0.056	0.000
Total Earnings		373.489	259.023	104.560
Imports :
	Raw Materials	69.278	61.400	25.921
	Stores & Spares	0.000	0.000	0.000
	Capital Goods	3.283	0.750	0.000
	Others	0.000	0.000	0.000
Total Imports		72.561	62.150	25.921
Expenditures :
	Interest	0.000	0.000	0.000
	Insurance Expenses	0.000	0.000	0.000
	Power & Fuel	0.000	0.000	0.000
	Financial Charges	9.271	9.721	0.000
	Depreciation & Amortization	5.088	4.257	0.000
	Other Expenditure	0.000	0.000	324.953
Total Expenditure		14.359	13.978	324.953

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	11.81	6.70	3.84
Net Profit Margin (PBT/Sales)	(%)	16.18	10.28	5.99
Return on Total Assets (PBT/Total Assets}	(%)	23.97	17.26	10.27
Return on Investment (ROI) (PBT/Networth)		0.44	0.75	0.46
Debt Equity Ratio (Total Liability/Networth)		0.83	3.19	3.32
Current Ratio (Current Asset/Current Liability)		2.18	1.39	1.28

LOCAL AGENCY FURTHER INFORMATION

TRUSTSEAL ACCEPTANCE CHART

Parameters	Detail
Existence Verification
Name	NOSCH LABS PRIVATE LIMITED
Statutory Approvals
Legal Status of Firm	PRIVATE LIMITED
Income Tax Registration	AABCN2833Q
VAT / TIN Registration	28690161838
Excise Registration	AABCN2833Q XM001
Import Export Code	0401005065
Name of Bank	Axis Bank
Current account Number	008010300012634
Account Since	2007
Creditability Factors
India Mart Client Since	3 years
Standards and Certifications
Quality Management Systems	6881 issued-7.5.2006 Expires - 7.4.2009 (Aqua International)

Form 8

Corporate identity number (CIN) Foreign company registration number	U24231AP2001PTC037086
Name of the Company	NOSCH LABS PRIVATE LIMITED
Address	Flat No. 201-202, Bhanu Enclave, 7-1-638 to 843/1, Sunder Nagar, Erragadda, Hyderabad – 500 038, Andhra Pradesh, India
This form is for	Modification of Charge
Type of Charge	Immovable property Book debts Floating charge
Particulars of the charge holder	Axis Bank Limited 6-3-879/B, Greenlands Road, Begumpet, Hyderabad – 500016, Andhra Pradesh, India n.bapiraju@utibank.co.in
Nature or description of the instrument(s) creating or modifying the charge	Letter of agreement: Cash Credit advances – CCD-3 Agreement for indemnity for export Credit – CCD-8 Undertaking for the bills purchased - CCD -9 General undertaking / Indemnity for letters of Credit – CCD -6 General undertaking / Indemnity for letters of Credit – CCD -6Memorandum of entry – New CCD – 10 Supplementary agreement of hypothecation for stocks, Bookdebts, Receivables,Movable assets etc Declaration cum deed of Confirmation for the Extension of Mortagage – New CCD -11,(A-1)
Date of the instrument creating or modifying the charge	13.12.2006
Amount secured by the charge	Rs.223.000 Millions
Brief particulars of the principal terms and conditions and extent and operation of the charge	Rate of Interest: 1.Rate of interest on cash credit –BPLR – 2.00%.,11%p.a. at present 2.Rate of interest on Foreign Bills discounting is as follows: Up to 180 days BPLR – 4.00%,. 9.00%p.a. Beyond 180 days and up to 270 days:BPLR+0.50%, Ie 13.50% p.a. 3. Rate of Interest:on export packing credit as follows: Demand Bills BPLR – 4.00%, Ie, 9.00 % p.a. at present. Usance Bills BPLR – 4.00% Ie 9.00 % P.a. at present. Terms of repayment: The working capital facilities would be valid for a period of twelve months Margin : Stocks and Book Debts 25% LC and BG margin: 5% up front Extent and operation of the charge: Primary First Charge on the entire current assets, present and future of the company. Collateral: First charge on the entire fixed assets (movable and immovable) present and future(except vehicles acquired under hire purchase schemes) of the company.
Short particulars of the property charged (including location of the property)	Primary First Charge on the entire current assets, present and future of the company. Collateral: First charge on the entire fixed assets (movable and immovable) present and future(except vehicles acquired under hire purchase schemes) of the company.
Particular of the present modification	The Loan Amount has increased from Rs. 123.000 Millions to Rs.223.000 Millions Interest rate has charged at 11.00 p.a. on cash credit.

Presented By	Dr. Bhimireddy Satyanarayana Reddy Managing Director
1) Date and description of instrument creating the change	Date : 08.04.2002 Letter of agreement: Cash Credit advances – CCD-3 General undertaking / Indemnity for letters of Credit – CCD -6 General undertaking / Indemnity for letters of Credit – CCD -6 Undertaking for the bills purchased - CCD -9 Agreement of hypothecation od current assets CCD-13 Deed of Hypothecations of machinery and other movable fixed assets CCD-15
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 7.000 Millions Facilities Limit Cash Credit (Sub Limit PC) Rs.3.500 Millions Biils Discounting Rs.1.000 Millions (Inland/Foreign) Foreign letter of Credit Rs.2.000 Millions Bank Guarantee Rs.0.500 Million Total: Rs. 7.000 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	First Charge onentire current assets of the company Present and future. Collateral Security on entire existing and propsed fixed assets except vehicle of the company.
4) Gist of the terms and conditions and extent and operation of the charge.	C C Rate of Interest 14% (PLR+2%) Rate of Interest linked to PLR, Subject to change from time to time
5) Name and Address and description of the person entitled to the charge.	Axis Bank Secunderabad Branch, Rastrapathy Road, Secuenderabad - 3
6) Date and brief description of instrument modifying the charge	Nil
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.	Nil

Website details:

Subject is amongst the foremost names in the pharmaceutical business today. It has carved a distinct niche for itself in the areas of continuous R and D, and the manufacture and marketing of Active Pharmaceutical ingredients, Intermediates and Chemicals.

Subjectss has emerged as the partner of choice of many transnational and multinational pharmaceutical companies in Asia, Africa, Middle East, South America and parts of Europe. A tribute to its ability in sucessfully bringing about a unique blen of quality and cost effectiveness.

'Making the world a healthier place'

This is the dream that drives us at subject. The laudable goal that we aim for. The vision that suffuses them with the passion to innovate and excel.

Over the past five years, they have been ceaselessly engaged in a quest to sustain and improve the quality of life through creating safe pharmaceutical solutions. Their competencies have grown to embrace the entire pharmaceutical value chain API's, Intermediates and Semi-finished Formulations.

Today, with an impeccable reputation for uncompromising quality and timely delivery, Subject has emerged as the partner of choice of many transnational and multinational pharmaceutical companies in Asia, South America, Europe and the Middle East.Nosch is ISO 9001-2000 accredited and has WHO GMP certification for semifinished formulations.

Production Prowess

Subject manufacturing operations span across 2 units in the south Indian state of Andhra Pradesh. While one is a dedicated API Unit, the other concentrates on Semi-finished Formulations/Pellets. The plants built and operated in conformance with the latest CGMP norms, house R and D labs, technical services, quality control, quality assurance and regulatory affairs and are regularly inspected and approved by major customers from around the world.

The state-of-the-art equipment and instruments provide us the necessary competitive edge on the global state. Moreover, the infrastructure with its optimum installed capacities and capital costs, lends us a sustainable cost advantage.

R and D an eye to the future

At present, our R and D activities are focused on process development. The sophisticated labs, manned by a talented, well-qualified team of professionals, develop proprietary process for organic and custom-made intermediates. The department plays on active role in the selection of new products and charting non-infringing routes for manufacturing the same.

One of the main keys to subject success has been the development and launch of products at the right time, in the right form and at the right price. An operation our R and D department enables us to perform to perfection, time after time!

To take on the challenges of the future, an advanced Research Centre is fast taking shape at Hyderabad. Its aim: to discover breakthrough pharmaceutical solutions in select therapeutic areas by harnessing cutting-edge technology.

Committed to Customer Delight

They believe in forging strong bonds with their customers through delivery of products on time, cost-effectively and securely. Quick response time, comprehensive technical support and top-notch quality products have seen Nosch record a healthy turnover of US$ 15.2 million, with export sales accounting for US$ 9.5 million.

While the product portfolio is focused on Anti-ulcerative's, which contribute to 50% of the company's turnover, they also have CTD's and Technical Documentation for numerous products.

Since the products are manufactured right from the basic to the penultimate stage, they are strategically positioned to supply any intermediate adhering to the customers specifications.

Strength in Formulations

Subject has acquired the necessary expertise to develop formulations for various products like Orlistat Pellets and Tamsulosin SR Pellets. They look forward to successfully partnering you in your formulation development projects.

Team Strength

The true prized assets at Nosch, are their people. Highly motivated and trained, they reflect a perfect blend of zeal and commitment. Sensitive to the needs of customers and proactive with solutions, they rise to meet the challenges of a constantly changing pharma world with a competitive spirit and a winner's attitude. In fact, the superior technical and innovative capabilities of our team lend us the confidence of emerging as a major player in the international arena.

Caring for the environment

As a responsible social citizen, protecting the environment is an issue that is close to their heart. They have made substantial investment in installing the latest pollution control equipment to keep pollution levels to the absolute minimum. A green belt of lush vegetation around the plants lends a scenic setting.

To conclude, we are determined to forge strong bonds with customers. Through continuous improvement in performance. Delivering products that meet individual specifications. And operating in an efficient, cost-effective and quality-driven manner.

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.46.88
UK Pound	1	Rs.82.97
Euro	1	Rs.64.99

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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		43

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