MIRA INFORM REPORT

Report Date :

29.07.2011

IDENTIFICATION DETAILS

Name :	VXL INSTRUMENTS LIMITED
Registered Office :	House of Excellence No. 17, Electronics City, Hosur Road, Bangalore – 560 100, Karnataka
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	28.02.1986
Com. Reg. No.:	08-007492
Capital Investment / Paid-up Capital :	Rs.133.353 Millions
CIN No.: [Company Identification No.]	L85110KA1986PLC007492
TAN No.: [Tax Deduction & Collection Account No.]	BLRV00109E
PAN No.: [Permanent Account No.]	AAACV4734D
Legal Form :	Public Limited Liability Company. Company’s shares are listed on Stock Exchanges.
Line of Business :	Manufacturers and Providers of Thin Client Devices.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (28)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 1000000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. There appears huge accumulated losses recorded by the company. However, trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some caution.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office / Factory 1 :	House of Excellence No. 17, Electronics City, Hosur Road, Bangalore-560100, Karnataka, India
Tel. No.:	91-80-28520046 / 36832705 / 28523252
Fax No.:	91-80-28520095
E-Mail :	narayanbhat@vsl.net
Website :	http://www.vxl.net
Factory 2:	No. 86 A/B, 4^th Cross, Electronics City, Hosur Road, Bangalore-560100, Karnataka, India
Tel No.:	91-80-28520790
Branches:	Located At: Mumbai Bangalore Secunderabad Kochi New Delhi Lucknow Kolkata Chennai
Overseas Offices:	Located At: Manchester Germany Tomball Paris

DIRECTORS

As on 31.03.2010

Name :	Mr. Arun Kumar Bhuwania
Designation :	Chairman
Name :	Mr. D. S. Rao
Designation :	Vice Chairman
Name :	Mr. M. V. Nagaraj
Designation :	Managing Director
Name :	Mr. M. V. Shetty
Designation :	Whole Time Director
Name :	Mr. Kumar Shyam
Designation :	Director
Name :	Mr. K. Prakash
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Narayan Bhat
Designation :	Chide Finance Officer and Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2011

Names of Shareholders	Total No. of Shares	Total Shareholding as a % of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	1,438,120	10.79
Sub Total	1,438,120	10.79
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	1,438,120	10.79
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	3,000	0.02
Financial Institutions / Banks	900	0.01
Foreign Institutional Investors	48,150	0.36
Sub Total	52,050	0.39
(2) Non-Institutions
Bodies Corporate	1,674,345	12.57
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	1,153,762	8.66
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	784,135	5.89
Any Others (Specify)	8,220,088	61.70
Clearing Members	220	-
Foreign Corporate Bodies	7,585,600	56.94
Foreign Nationals	437,600	3.28
Non Resident Indians	196,668	1.48
Sub Total	11,832,330	88.81
Total Public shareholding (B)	11,884,380	89.21
Total (A)+(B)	13,322,500	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers and Providers of Thin Client Devices.

Products :

Product Description	Item Code
Data Processing Units	8471 50 00
Information Technology Software	8523 80 20

PRODUCTION STATUS (AS ON 31.03.2010)

Particulars	Unit	Installed Capacity*	Actual Production
Data Processing Units	Nos.	120000	39730

Note:

• * Certified by the managing directors.
• Actual production excludes bought out items/ components.

GENERAL INFORMATION

Bankers :

State Bank of India

Facilities :

Secured Loan	As on 31.03.2010 (Rs. in Millions)	As on 31.03.2009 (Rs. in Millions)
Working Capital from a Bank	91.913	83.171
Term Loan from Banks	0.000	22.023
Hire Finance from a Bank for purchase of Vehicle	0.769	0.000
Total	92.682	105.194
Unsecured Loan
From Directors	2.835	9.172
From Others	0.000	3.698
From Companies	280.392	355.841
Total	283.227	368.711

Note:

1. Working Capital from a Bank is secured by hypothecation of Inventories, Receivables, Book-Debts and other Current Assets, Equitable Mortgage of Factory Land and Building and immovable property of the company and charge on unencumbered Plant and Machinery and personal guarantee of some of the Directors.
2. Installments of term loan due within a year Rs. Nil (Rs. 16.500 millions)
3. Installments of vehicle loan due within a year Rs. 0.331 millions (Rs. Nil)

Banking Relations :	--
Auditors :
Name :	Ishwar and Gopal Chartered Accountant
Address :	Bangalore, Karnataka, India

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
15000000	Equity Shares	Rs.10/- each	Rs.150.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
13350000	Equity Shares	Rs.10/- each	Rs.133.500 Millions
	Less: Allotment and Call Money in Arrears other than director		Rs.0.147 Million
	Total		Rs.133.353 Millions

NOTE:

OF THE ABOVE:

1. 2,326,830 Equity Shares of Rs.10/- each allotted as bonus shares by Capitalization of free reserves and Securities Premium Account.

2. 273,360 Equity Shares of Rs.10/- each issued pursuant to a scheme of amalgamation without payment being received in cash.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		133.353	66.747	66.747
2] Share Application Money		0.000	0.000	74.250
3] Reserves & Surplus		377.627	375.385	375.385
4] (Accumulated Losses)		(247.450)	(251.110)	(230.579)
NETWORTH		263.530	191.022	285.803
LOAN FUNDS
1] Secured Loans		92.682	105.194	128.499
2] Unsecured Loans		283.227	368.711	298.694
TOTAL BORROWING		375.909	473.905	427.193
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		639.439	664.927	712.996
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		247.671	246.345	249.203
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		5.220	6.495	7.995
DEFERREX TAX ASSETS		106.268	112.019	135.446
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	209.140	172.287	222.595
	Sundry Debtors	290.525	373.711	412.197
	Cash & Bank Balances	24.842	22.472	27.824
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	13.046	14.651	16.404
Total Current Assets		537.553	583.121	679.020
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	108.648	127.547	209.160
	Other Current Liabilities	141.935	149.144	144.043
	Provisions	6.690	6.362	5.465
Total Current Liabilities		257.273	283.053	358.668
Net Current Assets		280.280	300.068	320.352
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		639.439	664.927	712.996

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	766.040	803.808	934.286
		Other Income	8.722	3.047	11.399
		TOTAL (A)	774.762	806.855	945.685
Less	EXPENSES
		Cost of Materials	653.759	664.575	840.829
		Employee Related Expenses	22.613	18.524	28.563
		Other Expenses	53.221	74.337	80.739
		TOTAL (B)	729.593	757.436	950.131
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		45.169	49.419	(4.446)
Less	FINANCIAL EXPENSES (D)		30.313	34.359	67.417
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		14.856	15.060	(71.863)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		11.482	11.865	17.617
	PROFIT BEFORE TAX (E-F) (G)		3.374	3.195	(89.480)
Less	TAX (H)		0.000	23.726	(33.784)
	PROFIT AFTER TAX (G-H) (I)		3.374	(20.531)	(55.696)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(251.109)	(230.578)	(173.927)
Less/ Add	EXCESS PROVISION FOR TAXATION WITHDRAWN		0.285	0.000	0.955
	BALANCE CARRIED TO THE B/S		(247.450)	(251.109)	(230.578)
	EARNINGS IN FOREIGN CURRENCY
		Director Exports	0.519	2.098	11.306
		Deemed Exports through Others	676.399	704.262	784.480
	TOTAL EARNINGS		676.918	706.360	795.786
	IMPORTS
		Raw Materials	641.545	674.098	725.629
	Earnings Per Share (Rs.)		0.28	(3.07)	(8.33)

QUARTERLY RESULTS

PARTICULARS	30.06.2010	30.09.2010	31.12.2010	31.03.2011
Type	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Net Sales	228.500	275.800	220.500	254.200
Total Expenditure	210.300	258.800	197.600	233.700
PBIDT (Excl OI)	18.200	17.000	22.900	20.500
Other Income	0.000	0.000	2.900	4.900
Operating Profit	18.200	17.000	25.800	25.400
Interest	10.300	9.400	8.700	7.100
Exceptional Items	0.000	7.600	0.000	0.000
PBDT	7.900	15.000	17.100	18.300
Depreciation	3.000	3.000	5.800	3.000
Profit Before Tax	4.900	12.000	11.300	15.300
Tax	2.700	3.000	(8.900)	0.000
Profit After Tax	2.200	9.000	20.200	15.300
Net Profit	2.200	9.000	20.200	15.300

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	0.44	(2.54)	(5.89)
Net Profit Margin (PBT/Sales)	(%)	0.44	0.40	(9.57)
Return on Total Assets (PBT/Total Assets}	(%)	0.43	0.39	(9.64)
Return on Investment (ROI) (PBT/Networth)		0.01	0.02	(0.31)
Debt Equity Ratio (Total Liability/Networth)		2.40	3.96	2.75
Current Ratio (Current Asset/Current Liability)		2.09	2.06	1.89

LOCAL AGENCY FURTHER INFORMATION

FINANCIAL RESULTS

During the year, the Company achieved a net turnover of Rs. 775.000 million as compared to Rs.807.000 million in the previous financial year. The Company has earned a profit after taxation of Rs. 3.400 million in the financial year as against Rs. 20.500 million loss in the previous year.

OVERSEAS OPERATIONS

The Company continues the tie up with Priya Limited for providing support in Logistics and Distribution of its products in Europe and USA. VXL-UK has been able to extend good support in terms of marketing of the Company’s products in Europe and especially in USA during the year. Subject has been one of the first Indian Companies to venture into the export market and in spite of many obstacles and misconceptions about Indian progress as IT Hardware compared to Indian Software, subject has established itself worldwide as a player of the long run.

FUTURE PROSPECTS

GENERAL

As has been informed to the shareholders in earlier years the Company keeping in mind its overall competitiveness in international markets is taking steps to close the unit at No. 86A and B, 4th Cross, Electronics City, Hosur Road, Bangalore – 560 100. This unit used to manufacture CRT Terminals (GVX) for which there is no demand over many years. The workforce had become surplus. The closure would involve payment of compensation under the provisions of the Industrial Disputes Act, 1947. The closure would involve review by the concerned Labour Authorities of the Government of Karnataka, under The Industrial Disputes Act, 1947. The company is confident of defending the closure before the concerned Labour Authorities.

EXPORT

Market Forecast

The Research firm IDC reports that the thin-client market has grown by 46% in the four years since 2005 and that unit sales for 2009 were an estimated 2.4 million units. Forecast for the coming years vary by analyst but they all report a dramatic increase in growth, particularly in the Asian market. The most conservative estimate is from Forrester which is predicting annual growth rates of 45% in thin client shipments for the next four years. IDC forecasts a dramatic increase for 2010 with unit sales more than doubling to reach 5.3 million units with total sales of $1.25 billion. At the same time virtually all analysts agree that PC shipments will remain flat at best with some predicting negative growth. Two key market drivers are primarily responsible for these growth projections in the thin client sector; virtualisation and environmental concerns.

Virtualisation

In just about every organisation, IT departments are being asked to do more with less. Virtualisation technologies offer a direct and readily quantifiable means of achieving this goal by consolidating computing resources. Employing virtualization yields both an immediate, one-time cost saving and potentially significant ongoing savings in reduced heating, time management etc. Additionally, virtualisation can greatly enhance an organization’s business agility. A virtualised infrastructure is better positioned to respond to the changing demands that an organisation places on its I.T. infrastructure.

Green Computing

The growth of the environmental lobby and the rising cost of energy has helped to create the green computing movement which seeks to reduce the environmental impact of I.T. The client server model works particularly well in this regard as thin client desktops use about a quarter of the power required to run PC’s because they have no moving parts. This in turn means greater reliability and longer lifecycles, thus greatly reducing the quantity of obsolete computer hardware.

Focus

Subject has been making terminals and thin clients for many years. Unlike many of their competitors that is all that we do – their total focus as a company is to produce thin clients which the market requires. Subject is a true manufacturer, i.e. they actually make the majority of the products they sell at their own manufacturing facility. This gives subject a significant advantage over their competitors in that it allows us to be flexible in producing exactly what the customer requires.

Fixed Assets:

• Own Assets Land
• Building
• Plant and Machinery
• Plastic Mould
• Electrical Installation
• Office Equipment
• Air Conditioner
• Furniture and Fittings
• Vehicles

AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31^ST MARCH, 2011

Rs. in Millions

Particular	Quarter Ended	Quarter Ended	Year Ended
	31.12.2010	31.03.2011	31.03.2011
		Unaudited	Audited
(a) Net Sales / Income from operations	719.300	214.600	933.900
(b) Other Operating Income	0.700	5.900	6.600
Total Income	720.00	220.500	940.500
Expenditure
a) (Increase) / Decrease in stock in trade and work in progress	4.300	7.400	11.700
b) Consumption of raw materials	587.000	164.100	751.100
c) Employees cost	18.000	4.400	22.400
d) Depreciation	9.000	5.800	14.800
e) Other expenditure	64.000	21.700	85.700
Total	682.300	203.400	885.700
Profit from operations before other income, interest and exceptional Items	37.700	17.100	54.800
Other income	0.000	2.900	2.900
Profit before interest and exceptional Items	37.700	20.000	57.700
Interest	28.100	8.700	36.800
Profit after Interest but before Exceptional Items	9.600	11.300	20.900
Exceptional Items income	10.200	0.000	10.200
Profit (+)/Loss(-) from Ordinary Activities before tax	19.800	11.300	31.100
Deferred tax credit / reversal	(8.900)	8.900	0.000
Net Profit (+)/Loss(-) from Ordinary Activities after tax	10.900	20.200	31.100
Extra ordinary items (net of tax expenses)	0.000	0.000	0.000
Net Profit (+) / Loss (-) for the year period	10.900	20.200	31.100
Paid up equity share capital (Face value of Rs.10/- per share)	133.400	13.400	133.400
Reserves excluding revaluation reserves as per balance sheet of previous accounting year	--	--	160.300
Accumulated Loss	--	--	216.600
Earning per share (EPS)
(a) Basic and diluted EPS before Extraordinary items for the period, for the year to date and for the previous year (not to be annualised)	0.82	1.51	2.34
Segment Reporting
Segment Revenue
Domestic Segment	41.900	12.700	54.600
Export Segment	677.400	201.900	879.300
Net revenue form operations	719.300	214.600	933.900
Segment Results
Profit / Loss before tax and interest
Domestic market	8.000	4.600	12.600
Export market	77.300	35.300	112.600
Total	85.300	39.900	125.200
Less: Interest	28.100	8.700	36.800
Less: Other Unallocable expenditure / income	37.400	19.900	57.300
Total Profit / Loss before tax	19.800	11.300	31.100
Add: Deferred tax credit / reversal	(8.900)	8.900	0.000
Net profit after tax	10.900	20.200	31.100
Public shareholding
Number of shares	11910230	11911780	11911780
Percentage of shareholding	89.22	89.23	89.23
Promoters and Promoters group Shareholding-
a) Pledged /Encumbered
Number of shares	--	--	--
Percentage of shares (as a % of total shareholding of the promoter and promoter group)	--	--	--
Percentage of shares (as a % of total share capital of the company)	--	--	--
b) Non Encumbered
Number of shares	1439770	1438220	1438220
Percentage of shares (as a % of total shareholding of the promoter and promoter group)	100.00	100.00	100.00
Percentage of shares (as a % of total share capital of the company)	1.78	10.77	10.77

SEGMENT OF ASSETS AND LIABILITIES AS AT 31^ST MARCH, 2011

Rs. in Millions

Particular	As on 31.03.2011
SHAREHOLDERS FUNDS
Share Capital	133.400
Reserves & Surplus	451.100
LOAN FUNDS	370.700
TOTAL	955.200
FIXED ASSETS	325.900
INVESTMENT	5.200
DEFERRED TAX ASSETS	100.400
CURRENT ASSETS, LOANS & ADVANCES
Inventories	243.700
Sundry Debtors	263.700
Cash & Bank Balances	16.900
Other Current Assets	0.000
Loans & Advances	13.300
Less : CURRENT LIABILITIES & PROVISIONS
Other Current Liabilities	225.000
Provisions	5.500
PROFIT AND LOSS ACCOUNT	216.600
TOTAL	955.200

Note:

1. The above results reviewed by the audit committee were approved by the board at its meeting held on 25.05.2011

2. Segment wise reporting is based on geographical regions. Since fixed assets are used to the company business interchangeable, segment wise disclosure on capital employed has not been furnished.

3. The auditors have qualified their report with regard to non-provision in respect of the company’s investment in and receivable from the subsidiary and accounting of deferred tax credits. In view of the long term prospects and steps taken to recover these receivables, the management feels that no provision need be made in accounts. Against the old receivables, Rs.8.900 millions has been received during the quarter and Rs.16.100 millions has been received during the whole year.

4. Investor’s complaints pending as on March 31, 2011 was nil. The company received two investors complaint during the quarter ended March 31, 2011, two complaints were resolved leaving balance of nil complaint unresolved.

WEBSITE DETAILS:

PROFILE:

Established in 1976, Subject is a global leader in thin client and server-based computing technologies and has been manufacturing world-class thin client devices for over three decades providing a high quality range of high-specification, value for money models that are made to the most exacting standards.

This single-minded focus on thin clients and commitment to product quality is at the core of what Subject represents today together with a passion to support companies around the world to successfully build efficient IT infrastructures that are flexible, secure, manageable and affordable.

A Citrix OEM partner since 1996 and lately a Microsoft OEM and VMware Technology Alliance partners, subject world-renowned ‘Itona’ brand of thin clients continues to go from strength to strength, with subject on course to achieve its strategic goal of 25% market share of the global thin client market by the end of 2011.

Available in a variety of operating systems (Gio Linux, Sylph-OS, Windows CE, XP-Embedded, Windows Embedded Standard (WES 2009) and WES 7-E, Subject comprehensive product portfolio, includes Entry-Level, Mid-Range and High- Performance Desktops, Xtona Zero Clients,  touch screen Integrated models and the very latest, co-branded, Lenovo notebooks. Furthermore, Subject own innovative ‘XLmanage’ device management software also provides administrators with the ability to effectively manage devices remotely across a network.

Subject corporate head quarters and main manufacturing is based in Bangalore, India’s ‘Silicon Valley’, while the European HQ and Logistics centre is located in Manchester, UK and also provides sales and technical support to the USA and EMEA (Europe, Middle East and Africa) markets. Dedicated Sales and Support offices are also based in key strategic markets including Germany, France and USA, together with distribution partners in many other countries.

Subject mission statement, as a global leader in thin client and server-based computing technology, is to ensure its customers receive a higher return on their investment combined with a lower total cost of ownership.

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.44.13
UK Pound	1	Rs.72.05
Euro	1	Rs.63.33

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	2
--RESERVES	1~10	3
--CREDIT LINES	1~10	2
--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	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		28

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	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
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.