MIRA INFORM REPORT

Report Date :

23.10.2008

IDENTIFICATION DETAILS

Name :	ARADHYA STEEL PRIVATE LIMITED
Formerly Known As :	ARADHYA STEEL WIRES PRIVATE LIMITED
Registered Office :	Aradhya House , Door No. 385 2^nd Cross, 1^st Main K B , Extension, Davangere – 577 002, Karnataka
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	09.01.1989
Com. Reg. No.:	08-9761
CIN No.: [Company Identification No.]	U00361KA1989PTC009761
IEC No.:	0794013147
TAN No.: [Tax Deduction & Collection Account No.]	BLRA02643E
PAN No.: [Permanent Account No.]	AACCA3266D
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer of Steel Wires.

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 800000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well – established and reputed company having satisfactory track. Trade relations are fair. Business is active. Payments are reported as usually made as per commitments. The company can be considered good for normal business dealings.

INFORMATION PARTED BY

Name :	Mr. Pampapathi
Designation :	Accountants
Date :	21.10.2008

LOCATIONS

Registered Office :	Aradhya House, Door No. 385 2^nd Cross, 1^st Main K B , Extension, Davangere – 577 002, Karnataka, India
Tel. No.:	91-8192-272990
Fax No.:	91-8192-259551
E-Mail :	sales@aradhyasteel.com info@aradhyasteel.com
Website :	www.aradhyasteel.com
Area :	2400 Sq.fts
Location :	Rented
Factory 1 :	Avaragere Village, Pb Road, Davangere - 577 003, Karnataka, India
Area :	3 Acre
Location :	Leased
Factory 2 :	Halwarthe, Karnataka, India
Area :	18 Acre
Location :	Owned

DIRECTORS

Name :	Mrs. Aradhya Avinash
Designation :	Director
Address :	2980 MCC B Block , Davangere – 577 004, Karnataka, India
Date of Birth/Age :	12.05.1978
Date of Appointment :	12.05.2006
Directorship in the other companies :
CIN of Company :	U31300KA1996PTC19558
Name of Company :	Aradhya Wire Ropes Private Limited
Designation :	Director
Name :	Mr. Inahalli Puttappa Mallokaradhya
Designation :	Director
Address :	2580 Avinash, 7^th Main Davangere Extn, P/S, Davangere – 577 004, Karnataka, India
Date of Birth/Age :	05.08.1950
Date of Appointment :	09.01.1989
Name :	Mrs. I M roopa
Designation :	Director
Date of Birth/Age :	01.06.1956
Date of Appointment :	18.09.2000

KEY EXECUTIVES

Name :	Mr. Pampapathi
Designation :	Accountants

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (As on 30.05.2008)		No. of Shares
Mr. I P Mallokaradhya		19085
Mrs. I M Roopa		5855
Mr. Avinash Aradhya		30
Mrs. I M Anju		30
	Total	25000

Names of Allottees (As on 30.03.2007)	No. of Shares
Mr. I p Mallokaradhya	5000
Mrs. I M Roopa	5000

Equity Share Breakup (Percentage of Total Equity):-

Category (As on 31.03.2007)	Percentage
Directors or relative of directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Steel Wires.
Products :	· Steel For Spring Steel · Steel For Auto Cabel Industry · Steel For Conductor Industry · Steel For Infrastructure · Steel For Steel Wire Rope · Steel For Tyre Industry
Imports :
Products :	Plant and machinery
Countries :	China, Italy
Terms :
Selling :	Credit (60-90 days)
Purchasing :	L/C, Cash

PRODUCTION STATUS (As on 31.03.2008) :-

Particulars	Unit	Job Work Production	Wire rope production	Installed Capacity	Actual Production
			(In Lac Mtrs)
Steel Wires	Mt	135	80.90	24000	10509

GENERAL INFORMATION

Customers :

OEM’s

· Suprajit Engineering

· Remsons Group

· Pricol

· INFAC Cables

· Suhner

· Tata Ficosa

· Stumpp Schuele and Somappa

· Suma Springs

· Kemen Springs

· Bellite Springs

· Nagappa Springs

· Accurate Springs

· Fenner India

· Deepak Cables

· Sesa Goa

· Chowgule

· VS Dempo

· Mormugao Port Trust

· Cochin Shipyard

· Vizag Steel Plant

· Mukand Iron and Steel

· Jindal Vijaynagar

· Neyveli Lignite

· Larsen and Toubro

· Oil and Natural Gas Corp

No. of Employees :

420 (20 in Office and 400 in Factory)

Bankers :

· Union Bank of India, IFB Branch, No. 10/A, Chandrakiran, Kasturba Road, Bangalore – 560 001, Karnataka, India

· State bank of India, SSI Branch, Kumara Park, 179, Subedar Chatram Road, Seshadripuram, Bangalore – 560 020, Karnataka, India

· HDFC Bank

· ICICI Bank

Facilities :

Cash Credit – Rs. 90.000 millions (Union Bank of India)

Cash Credit – Rs. 100.000 millions (State Bank of India)

Secured Loan	31.03.2008
(Rs. in millions)
Term Loan
KSFC, Bangalore (Secured by hypothecation of additions to the plant and machinery, second charge over existing plant and, machinery and guaranteed by the Director of the company )
Union Bank of India (Secured by hypothecation of additions to the plant and machinery, second charge over existing plant and machinery and guaranteed by the Director of the company )	42.500
State Bank of India – TL
Interest accrued and due thereon	156.748
(secured by hypothecation of additions to the plant and machinery, second charge over existing plant and machinery, second charge over existing plant and machinery and guaranteed by the Director of the company )
HDFC Bank, Hubli	0.098
ICICI Bank, Hubli	1.733
(Secured by hypothecation of Motor Car)
Secured – Working Capital Loans
Union Bank of India
Cash Credit	66.907
State Bank of India
LC Bills Discounting	2.048
Cash Credit	106.477
(Secured by hypothecation of raw materials finished goods, work in process, consumables stores, Trade Debtors, Second charge over Fixed assets and guaranteed by the Director of the company)
Total	376.511
Unsecured Loans
From Director / Members (per Bank Terms)	46.320

Banking Relations :

Satisfactory

Auditors :

Name :

Santhappa and Company

Chartered Accountants

Address :

Ganesh Complex, Behind Hotel Darshan, P B Road, Davanagere-577 002, Karnataka, India

Associates/Subsidiaries :

· Aradhya Wires Ropes Private Limited

Address : Davangere Karntaka, India

Activity : Manufacturer of Steel Wires.

· I-Mag Wire Products

· Shankar Concrete Products

· Afx Logistics

· Avinash Concrete Products

· Chetana Concrete Products

· Mysore Cement Pipes, Mysore

· Aradhya Ropes and slings

CAPITAL STRUCTURE

(As on 30.09.2008):-

Authorised Capital :

No. of Shares	Type	Value	Amount
50000	Equity Shares	Rs. 1000/- each	Rs. 50.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
25000	Equity Shares	Rs. 1000/- each	Rs.25.000 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		25.000	25.000	15.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		115.909	83.642	63.106
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		140.909	108.642	78.106
LOAN FUNDS
1] Secured Loans		376.511	230.913	86.078
2] Unsecured Loans		46.320	8.266	7.200
TOTAL BORROWING		422.831	239.179	93.278
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		563.740	347.821	171.384
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		239.246	145.131	67.753
Capital work-in-progress		31.845	84.003	14.347
INVESTMENT		0.321	0.321	0.322
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	113.779	66.918	36.517
	Sundry Debtors	139.706	50.892	53.422
	Cash & Bank Balances	34.259	0.904	0.903
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	34.919	17.339	10.658
Total Current Assets		322.663	136.053	101.500
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	30.451	17.841	12.538
	Provisions	0.000	0.000	0.000
Total Current Liabilities		30.451	17.841	12.538
Net Current Assets		292.212	118.212	88.962
MISCELLANEOUS EXPENSES		0.116	0.154	0.000
TOTAL		563.740	347.821	171.384

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		596.872	344.461	329.717
Other Income		0.000	0.000	0.000
Total Income		596.872	344.461	329.717
Profit/(Loss) Before Tax		35.936	23.588	29.764
Provision for Taxation		12.900	8.333	10.385
Profit/(Loss) After Tax		23.036	15.255	19.379
Export Value		23.394	72.070	17.639
Expenditures :
	Financial Charges	36.523	13.211	9.468
	Depreciation & Amortization	13.847	7.282	5.864
	Other Expenditure	510.566	300.380	284.621
Total Expenditure		560.936	320.873	299.953

KEY RATIOS

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
PAT / Total Income	(%)	3.86	4.43	5.88
Net Profit Margin (PBT/Sales)	(%)	6.02	6.85	9.03
Return on Total Assets (PBT/Total Assets}	(%)	6.05	6.45	16.18
Return on Investment (ROI) (PBT/Networth)		0.26	0.22	0.38
Debt Equity Ratio (Total Liability/Networth)		3.22	2.37	1.36
Current Ratio (Current Asset/Current Liability)		10.59	7.63	8.95

LOCAL AGENCY FURTHER INFORMATION

Additional Requirement of Indiamart for Trust-Seal

Excise Registration No.: AACCA3266D X M001

Vat: 29050110419v (As claimed by management but not available online)

IEC Code : 0794013147

PAN / TAN : AACCA3266D

Bank Name : Union Bank of India

Bank Address :IFB Branch

Bank A/c. No.: 10134006

Account Since :2005 (Since 3 years)

In case of any certifications :

Name : ISO Certificate

Type : 9001 - 2000

Expiry Date : 2010

FIXED ASSETS:-

· Plant and Machinery

· Electrical Installation

· D G Sets

· Lab Equipments

· Office Equipments

· Computer and Accessories

· Weighing Scale

· Furniture and Fixtures

· Vehicles

· Pollution Control Equipments

· Effluent Treatment Plant

· Computer Software

· Cycle

form 8:-

Name of the company	ARADHYA STEEL WIRES PRIVATE LIMITED
Presented By	Union Bank of India, industrial Finance Branch, Hafeeza Chambers, 1st Floor, No. 117/74, K H Road, Bangalore – 560 027, India
1) Date and description of instrument creating the change	09.08.2005 Hypothecation (goods) Agreement
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 5.500 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 first charge on entire current assets. Stock of steel and Iron Rods, Wires, semi finished and finished goods, receivables including Cheque, instruments, drafts, etc belonging to the company.
4) Gist of the terms and conditions and extent and operation of the charge.	· Interest at 14.25% p.a · Margin : 25% · Repayable on Demand
5) Name and Address and description of the person entitled to the charge.	Union Bank of India Industrial Finance Branch, Hafeeza Chambers, 1^st Floor, No. 111/74, K H Road, Bangalore – 560 027, Karnataka, India

Corporate identity number of the company	U00361KA1989PTC009761
Name of the company	ARADHYA STEEL PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	Aradhya House, Door No. 385 2^nd Cross, 1^st Main K B , Extension, Davangere – 577 002, Karnataka, India
This form is for	Modification of charge
Type of charge	· Book Debts · Movable Property
Particular of charge holder	Union Bank of India, Industrial Finance Branch, No. 10/A, Chandrakiran Kasturba Road, Bangalore – 560 001, Karnataka, India E-Mail: ifbbangalore@unionbankofindia.com
Nature of instrument creating charge	Supplementary deed to SD – 20, Hypothecation Deed (SD-20 S)
Date of instrument Creating the charge	30.05.2005
Amount secured by the charge	Rs. 146.600 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest : Interest at · Cash Credit (Hypothecation) Rs. 90.000 millions -15.25% (BPLR +2.50% · Term Loan – Rs. 41.600 millions – 16.25% (BPLR +3.50% · Import L/C – Rs. 15.000 millions –Usual Terms of Repayment : On Demand Margin : 25% Extent and Operation of the charge : The charge on the assets being charged shall operate to the extent of Rs. 146.600 millions plus interest, costs, commission, expenses and other charges thereon.
Short Particulars of the property charged	Hypothecation of all goods, stock, plant, machinery, fixtures, implements, fittings, installation, future, vehicles, all articles and things, both present and future book debts, outstanding monies, receivables claims, bills, contracts, securities, investment, rights and assets and all other movable assets /things belonging to the company at Aradhaya House, K B Extn. Davanagere or factory premises or in transit or wherever else belonging to the company.
Particulars of the present modification	Overall limits have been enhanced from Rs. 135.000 millions to Rs. 146.600 millions as detailed as below: a) Cash Credit (Hypothecation) Rs. 90.000 millions b) Term Loan – Rs. 41.600 millions c) Import L/C – Rs. 15.000 millions And all other Terms and conditions continue to operate.

OTHER INFORMATION:-

Review of operation

Financial year 2007-2008 has been an exciting year with the commissioning of all the equipment of phase I of the expansion in April 2007 and sales has steadily increased to 1000 Tons per month of the planned 2000 Tons Per month capacity. The company also flagged off phase 2 of expansion into Tyre Bead Wire in May 2007 and the plant is expected to get commissioned in July 2008. This will rake the company past the milestone of Rs. 1000.0000 millions in Turnover for Financial year RS 2008-09.

The company faced some unique challenges in the year. Raw materials and other input prices shot up more than 37% from April 2007 to march 2008 and since, availability was poor even at these prices, raw material had to be sourced from open secondary market sources at premium prices to ensure supplies to customers. However, there was resistance from the market to accept these prices as vertically integrated competitors increased wire prices on a different cycle in comparison to wide rod sand other input price increases.

Inspite of the tremendous challenges faced by the company. The company has posted a satisfactory performance for the year. The company’s top-line increased with increased volumes but the net profit from operations reduced due to reduction of margin and increased interests costs.

The company has achieved sales and operating income of Rs. 555.000 millions for the year which is an increase of 65% growth over 2006-07. The net profit of the company for the year under report after considering the deferred tax and MAT credit entitlement provisions was Rs. 23.036 millions as against Rs. 15.255 millions in previous year.

Change of name

The company name has been changed to Aradhya Steel Private Limited vide Fresh certificate of Incorporation consequent upon change of name issued by the Registrar of Companies, Karnataka, Bangalore on 24.01.2008.

WEBSITE DETAILS:-

Incepted in the year 1989, they are vertically integrated company proficient engaged in production and export of manufacturing high carbon wires. Their products are designed to meet all the international quality standards owning to their precision steel wires manufactured with the usage of state-of –the-art process equipment and wire drawing technologies, they stand apart from their competitors.

Aradhya steel wire is working under the able guidance of Mr. IM Aradhya and are directed and supported by Mr. Avinash Aradhya. Consistently creating value for their customers by providing efficient products, they have achieved remarkable growth with reasonable EBITDA margins. They have employed a team of expert professionals that efficiently operates the advanced wire drying machine and straight line drawing machine that they have installed at their production unit.

Constant efforts are also given to maintain quality of the product through innovation and advancement in technology and rigorous quality checks.

Achievements

They have achieved desirable heights of growth in the industry with their premier quality product named as bead wire with initial capacity of 7000MTPA. Further, expansion has been made in automotive strands to 50 Mill Meters per yer to meet the bulk requirements of their customers with ease. Highly durable window regulator cable strand of assured quality and technical excellence with a capacity of 50 Mill Meter per year have been launched.

Group
The roots of the Aradhya Family can be traced back 200 years before and is currently indulged into diverse spheres of Hospitals, Education and Banking, Packaged Drinking Water, Steel Wire and Ropes and Cement Products.

Further, Aradhya Steel Group was incepted in the year 1971 by Mr. IM Aradhya and his brothers who is in the business of hardware products such as Nails with backward integration into Mild Steel Wires. The Group has three core businesses which are Steel Wire, Steel Rope and Concrete Pipes and Poles.

Core management team

The members of the various wings are master of their profile. Their proficient management team comprises of:'

Mr. Dilip Deshmukh is Director-Technical and has experience working with companies like Rajratan Global Wire, Venus Wires, Hindustan Wires, Mukand, Usha Martin, Aarti Steel, Ramsarup Industries, Modi Steel.

Mr. Ram Athreya is VP-Technical and has worked with renowned companies like Tata Steel and Panyam Cement and Mineral Industries.

· Mr. Krishnan Nair is GM-Unit

· Mr. R Muralidharan is GM-Projects

· Mr. Raghuram Shetty is GM-Production

· Mr. Venkataswamy is GM-Process and Systems Audit

· Mr. SN Pandey is GM-Marketing ,South

· Mr. Amit Sudan is SM-Marketing ,West

Products

They offer a wide range of products that includes steel for Steel for Spring Steel, Auto Cable Industry, Conductor Industry, Infrastructure, Steel Wire Rope and Tyre Industry. These products are manufactured with help of advanced machines that they have installed at their unit. All their products are of tested quality and are delivered within designed time frame. These products are globally renowned for their silent features which include:

· Uniform surface finish

· High tensile strength

· High torsion value

· Ductility
Excellent cast

· Helix properties with up to 1 Ton coil weights on formers

Manufacturing Facilities

They have two state-of-the-art manufacturing unit to carry the work of production as per the exact specification and requirements of their clients. located in Davangere, it has the production capacity of 2000 Metric Tonnes per month and offering varied sizes ranging from 0.13 MM to 5.00 MM.

Unit 1 which is their old plant has the total land area of 5 acres wherein the building area is 4500 square meters. It has the manufacturing capacity of 2000 MTPA finished wires and 200 MTPA of strands or rope

The unit 2 has the total land area of 25 acres which includes 14000 square meters of building area. The plant has the high manufacturing capacity of 24000 MTPA for Rod Processing, 12000 MTPA for Finishing. The various products they manufacture in this unit comprises of Auto Cable Wires, Rope Wire,Spring Steel, Bead Wire, Automotive Strands (50 Mill. Mtrs/Year), Rope (1200 MTPA).

Some of the machines that has installed in their units comprises of

· Pre-Drawing Machines

· LPG Fired Furnace with Lead Bath

· Furnace Cleaning Line

Further they also have

Rod Surface Treatment with In-line de-scaling, acid fume-less pickling, phosphate and borax coating Line for superior uniform surface finish. This line has the status of being India’s First Line with inline Phosphate coating.

Wire Drawing Machines imported from Mario Frigerio (First In India) are Straight line drawing machines (with Roto-dies, Pressure Dies and Thin-Wall Drum Cooling) to get superior wire properties of uniform tensile, torsion, ductility and surface

Dead Block Coiler on the wire drawing machines produce wire with excellent cast and helix properties with up-to 1 Ton coil weights on formers

Quality compliance

Quality is of foremost importance to them and they make sure that they deliver premium quality products. They procure their raw material from certified vendors to ensure the highest performing and technically excellent product. They strictly abide by their company’s quality standards and therefore the quality is inspected critically at various manufacturing stages to serve their clients with the best of products. To accomplish the task of testing varied sophisticated machinery are used such Tensile Testing Machine (Computerized) 5 Tons Capacity, Torsion Testing Machine, Wrap Testing Machine, Bend Testing Machine Metallurgical Microscope, Stereo Microscope ,Salt Spray Testing Machines. The various stringent tests that they follow are:

· Physical test

· Chemical test

· Metallurgical Test

· Chemical Test

· Deep etch test

Further, to meet the requirements of the new automotive quality management system they are under implementation of acquiring TS16949 technical specification and also - ISO14000

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.49.29
UK Pound	1	Rs.80.40
Euro	1	Rs.63.35

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		51

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