MIRA INFORM REPORT

Report Date :

02.06.2011

IDENTIFICATION DETAILS

Name :	LANCO KONDAPALLI POWER LIMITED
Formerly Known As :	LANCO KONDAPALLI POWER PRIVATE LIMITED
Registered Office :	Plot No.4, Software Units Layout, Hitec City, Madhapur, Hyderabad – 500081, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	21.08.1995
Com. Reg. No.:	01-021459
Capital Investment / Paid-up Capital :	Rs.3400.007 millions
CIN No.: [Company Identification No.]	U40101AP1995PLC021459
TAN No.: [Tax Deduction & Collection Account No.]	HYDK00662E
PAN No.: [Permanent Account No.]	AAACK5423A
Legal Form :	A Closely Held Public Limited Liability Company.
Line of Business :	Generation and Transmission of Electric Energy Produced in Gas based Thermal Power Plants.
No. of Employees :	Not Available.

RATING & COMMENTS

MIRA’s Rating :

Ba (51)

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

Maximum Credit Limit :	USD 39000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. General financial position is good. Trade relations are reported as fair. Business is active. Payments are reported to be correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

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 :	Plot No.4, Software Units Layout, Hitec City, Madhapur, Hyderabad-500081, Andhra Pradesh, India
Tel. No.:	91-40-40090400
E-Mail :	ikpl@lancogroup.com ksn@lancogroup.com
Website :	www.lancogroup.com
Plant Office :	IDA Kondapali Ibrahimpatnam Mandal, Krishna Dist-521228, Andhra Pradesh, India
Tel. No.:	91-866-2872804
Fax No.:	91-866-2872801

DIRECTORS

AS ON 14.07.2010

Name :	Mr. L Madhusudhan Rao
Designation :	Chairman
Address :	Plot No.1277, Road No.63A, Jubilee Hills, Hyderabad-500034, Andhra Pradesh, India
Date of Birth/Age :	08.01.1966
Date of Appointment :	14.08.1998
DIN No :	00074790
Name :	Mr. L. Sridhar
Designation :	Director
Address :	Plot No.65, Survey No.4 and 6, Whisper Valley, Hussain Shaklall Dargah Village, Serillingapally Mandal, R. R. District, India
Date of Birth/Age :	14.06.1968
Date of Appointment :	08.09.2003
DIN No :	00075809
Name :	Mr. P. Panduranga Rao
Designation :	Director and CEO
Address :	Plot No.36, Rao and Raju Colony, Road No.2,Banjara Hills, Hyderabad-500034, Andhra Pradesh, India
Date of Birth/Age :	02.03.1956
Date of Appointment :	19.12.2005
DIN No :	00037740
Name :	Mr. J. Suresh Kumar
Designation :	Director
Address :	62, Road No.72, Prashashan Nagar, Jubilee Hills, Hyderabad-500033, Andhra Pradesh, India
Date of Birth/Age :	25.07.1969
Date of Appointment :	12.05.2010
DIN No :	01858774
Name :	Mr. Ong Tiong Soon
Designation :	Director
Address :	Apt. N0.A-28-1, North Tower, 6, Persiaran Hampshire, Off. Jaian Ampang, Kuala Lumpur-50450, Malaysia
Date of Birth/Age :	18.01.1944
Date of Appointment :	16.06.2003
DIN No :	00037847
Name :	Mr. Hee Kang Yow
Designation :	Director
Address :	51, JLN BU 312, Bandar Utama, Petaiing Jaya, Kuaia Lumpur-47400, Malaysia
Date of Birth/Age :	21.05.1968
Date of Appointment :	18.07.2007
DIN No :	01654270
Name :	Mr. Tan Kong Han
Designation :	Director
Address :	11, Jalan Punchak, Setiawangsa-1, Taman Setiawangsa, Kuala Lumpur-54200, Malaysia
Date of Birth/Age :	21.05.1965
Date of Appointment :	16.01.2008
DIN No :	01945228
Name :	Mr. Kang Seon Kim
Designation :	Director
Address :	No.203-403, Hanbo Mido Mansion, 511, Daechi-Dong, Kangnam-Ku, SEOUL-135282, Korea
Date of Birth/Age :	24.12.1955
Date of Appointment :	18.07.2007
DIN No :	01626544
Name :	Mr. K. Jayabharath Reddy
Designation :	Independence Director
Address :	6-3-1186/6, Begumpet, Hyderabad-500016, Andhra Pradesh, India
Date of Birth/Age :	12.04.1937
Date of Appointment :	29.06.1999
DIN No :	00038342
Name :	Dr. Pamidi Kotaiah
Designation :	Independence Director
Address :	102, Pooja Pride Apartment, Srinagar Colony, Hyderabad-500073, Andhra Pradesh, India
Date of Birth/Age :	15.05.1938
Date of Appointment :	29.06.1999
DIN No :	00038420
Name :	Mr. D. Ravi
Designation :	Nominee Director (PFC)
Address :	314, Nagin Lake Apartment, Peeragarhi, New Delhi, Delhi, India
Date of Birth/Age :	24.05.1958
Date of Appointment :	16.06.2003
DIN No :	00038452
Name :	Mr. V.V. Warty
Designation :	Nominee Director (SBI)
Address :	6, Unmesh, N.P.Thakkar Road, Vile Parle (E), Mumbai-400 057, Maharashtra, India
Date of Birth/Age :	03.07.1942
Date of Appointment :	13.12.2004
DIN No :	00701010
Name :	Mr. R.N. Bhardwaj
Designation :	Nominee Director (IFCI)
Address :	402, 'Moksh' Apartment, Upper Govind Nagar, Malad (East), Mumbai-400 097, Maharashtra, India
Date of Birth/Age :	18.05.1945
Date of Appointment :	15.10.2007
DIN No :	01571764
Name :	Mr. D. Venkateswara Rao
Designation :	Director
Address :	6-1/17, DLF City, Phase-1,Gurgaon, Haryana-122001, India
Date of Birth/Age :	01.06.1965
Date of Appointment :	22.01.2007
DIN No :	00031325
Name :	Mr. G. Venkatesh Babu
Designation :	Director
Address :	Flat No.66 and 68, Ashwani Layout, Hallmark Hill View, Road No.78, Jubilee Hills, Hyderabad-500033, Andhra Pradesh, India
Date of Birth/Age :	03.07.1968
Date of Appointment :	12.05.2010
DIN No :	00075079
Name :	Mr. G. Bhaskara Rao
Designation :	Director
Address :	Flat No.42, Type-A, Road No.6, Film Nagar,lubilee Hills, Hyderabad-500033, Andhra Pradesh, India
Date of Birth/Age :	17.12.2002
Date of Appointment :	01.06.1954
DIN No :	00075034

KEY EXECUTIVES

Name :	Mr. K. Satyanarayana
Designation :	Company Secretary
Address :	1-2-36, Fiat # 204, Pragathi Elegance, Nizampet Road, Kukatpally, Hyderabad-500072, Andhra Pradesh, India
Date of Birth/Age :	15.08.1957
Date of Appointment :	18.01.2010
PAN No :	ADDPK5015H
Name :	Mr. K. Suryanarayana
Designation :	Company Secretary
Address :	Flat# 301, Siddharth, Haven, Plot # 89/90, Mahesh Nagar, Kapra, ECIL Post, Hyderabad-5000762, Andhra Pradesh, India
Date of Birth/Age :	03.05.1971
Date of Appointment :	31.05.2008
PAN No :	AGJPK7305H

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 14.07.2010)

Names of Shareholders	No. of Shares
L Madhusudhan Rao	100
L. Sridhar	100
G. Bhaskara Rao	100
L. Padma	100
G. Pamavathi	100
L. Raja Laxmi	100
L. V. Ramanaidu	100
Lanco Infratech Limited, India	200600000
Web Energy Limited, India	58140000
Web Energy Limited, India	43860000
Doosan Heavy Industries and Construction Company Limited, India	37400000
Total	340000700

(AS ON 14.07.2010)

Equity Share Breakup	Percentage of Holding
Category
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	41.00
Bodies corporate	59.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Generation and Transmission of Electric Energy Produced in Gas based Thermal Power Plants.

Products :

ITC CODE	PRODUCT
400.4	Generation and Transmission of Electric Energy Produced in Gas based Thermal Power Plants

PRODUCTION STATUS

Particulars	Unit	2010	2010
Installed Capacity (50hz)*	(MW)	368.144	233.000
Actual Generation	(Million KWH)	2792.930	467.286
Auxiliary Consumption	(Million KWH)	59.431	4.922
Line Loss	(Million KWH)	--	18.364
Units Sold	(Million KWH)	2733.499	444.000

Note: * As certified by the Management and relied upon the Auditors, being a technical matter.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· Bank of Baroda,

3-6-262/6, Tirumala Estates, 3^rd Floor, Himayat Nagar, Hyderabad-500029, Andhra Pradesh, India

Facilities :

SECURED LOAN	31.03.2010	31.03.2009
	(Rs. In Millions)
Debentures - Phase – I
a) 3,750,000 Secured Redeemable Non- Convertible Debentures of Rs.100 each	0.000	55.145
[Bearing interest at the rate of 3.5% per annum over and above the prime lending rate (12.5% per annum with effect from January 15, 2006). The debentures are redeemable at par in 34 quarterly equal installments commencing on March 15, 2002.]. The balance debentures were redeemed fully during the year.
b) 35 Secured Redeemable Non-Convertible Debentures of Rs.1,00,00,000 each	0.000	41.765
[The debentures bearing interest at the rate of 12% per annum are redeemable at par in 34 quarterly equal installments commencing on April 15, 2002 (Rescheduled on April 15, 2003 to 30 quarterly equal installments commencing on April 15,2003).] The balance debentures were redeemed fully during the year. [The debentures are secured on pari-passu basis with the charges created for securing the term loans and working capital loans by a charge by way of registered mortgage of the Company’s freehold property in the State of Maharashtra and assignment of project contracts, by a first charge on pari passu basis with the charges created for securing the term loans and working capital loans by way of an equitable charge by deposit of title deeds of all the immovable properties of the Company, both present and future situated at Krishna District in the State of Andhra Pradesh and by way of hypothecation of all the movable properties of the Company including its movable plant and machinery, spares, tools, accessories and other movables, both present and future including book debts ranking pari passu with charges created for securing the working capital requirements. Further secured by pledge of a portion of shares held by promoters. Debentures referred in a) above, are further secured by personal guarantees of certain directors/erstwhile director, and corporate guarantee of the holding company.]
Term Loans-Phase-1
a) Rupee Loans
From Banks	8.931	124.458
From Financial Institutions	129.117	387.352
b) Foreign Currency Loans
From Banks	708.890	1201.330
From Financial Institutions	33.191	192.594
[Rupee Term Loans, Foreign Currency Term Loans from Banks and Financial Institutions, Guarantees issued by Banks for securing the Foreign Currency Term Loans from banks are secured on a pari passu basis, with the charges created for securing the debentures by a charge by way of registered mortgage of the Company’s freehold property in the State of Maharashtra and assignment of project contracts; by a first charge on a pari passu basis with the charges created for securing the debentures by way of an equitable mortgage by deposit of title deeds of all the immovable properties of the Company, both present and future situated at Krishna District in the State of Andhra Pradesh and by way of hypothecation of all the movable properties of the Company including its movable plant and machinery, spares, tools, accessories and other movables both present and future including book debts ranking pari passu with charges created for securing the working capital requirements. Further secured by personal guarantees of certain directors / erstwhile director, pledge of a portion of shares held by promoters and corporate guarantee of the holding company.]
Term Loans-Phase-II
From Banks	6325.044	3229.300
From Financial Institutions	235.690	117.845
[Rupee Term Loans from Banks and Financial Institutions are secured by a first ranking pari passue charge on all the immovable properties present and future, hypothecation of all the borrowers movables present and future, operating cash flows, book debts, receivables and other revenues present and future and first priority charge over all bank accounts and on the immovable properties of the Company in the State of Maharashtra, right, title over Trust and Retention Account together with permitted investments, rights, title interest and benefits over insurance contracts and all other assets including uncalled capital and intellectual property together with the Phase-I Lenders and the debenture trustees for the holders of debentures. Further, secured by first charge on a pari passu basis on all the movable properties including receivables, book debts, equipments, plant and machinery, machinery spares, tools and accessories, furniture, fixtures, vehicles and other movables, both presenet and future, whether installed or not, brought into or to be stored in borrowers factory premises, warehouse, stockyards and godowns at Kondapalli, at Krishna District in the state of Andhra Pradesh or at various work sites or at any other place. Further secured by pledge of portion of shares held by promoters.]
Cash Credits from Banks - Phase-I	393.312	326.308
[Cash Credits from Banks are secured by way of charge on Company’s inventories, consumable stores, book debts and all the movable properties of the Company including its movable plant and machinery, spares, tools, accessories and other movables both present and future and further secured by way of a equitable charge by deposit of title deeds of all the immovable properties of the Company situated at Krishna District in the State of Andhra Pradesh, both present and future ranking pari passu with charges created for securing the debentures and term loans of the Company and secured on a pari passu basis by way of registered mortgage of the company’s freehold properties in the State of Maharashtra and assignment of project contracts. Further secured by personal guarantees of certain directors / erstwhile director, pledge of a portion of shares held by promoters and corporate guarantee of the holding company.]
Total	7834.175	5676.098

Banking Relations :	--
Auditors :
Name :	Price Waterhouse Chartered Accountant
Address :	8-2-293/82/A/1131/A, Road No.36, Jubilee Hills, Hyderabad-500033, Andhra Pradesh, India
Holding Company :	Lanco Infratech Limited CIN No : L45200AP1993PLC015545
Fellow Subsidiaries :	Lanco Power Trading Limited
Associates :	v Lanco Devihalli Highways Private Limited v Lanco Hoskote Highway Private Limited v Lanco Vidarbha Thermal Power Private Limited (formerly Lanco Mahanadi Power Private Limited

CAPITAL STRUCTURE

AS ON : 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
1500000000	Equity Shares	Rs.10/- each	Rs.15000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
340000700	Equity Shares	Rs.10/- each	Rs.3400.007 millions

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		3400.007	3400.007	3400.007
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		6389.616	4270.058	3022.167
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		9789.623	7670.065	6422.174
LOAN FUNDS
1] Secured Loans		7834.175	5676.098	2540.225
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		7834.175	5676.098	2540.225
DEFERRED TAX LIABILITIES		504.501	0.000	0.000
TOTAL		18128.299	13346.163	8962.399
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		10721.872	4283.454	4863.345
Capital work-in-progress		6872.372	5512.783	904.196
INVESTMENT		0.055	0.055	0.004
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	452.690	987.356	1339.949
	Sundry Debtors	1271.321	1408.691	1553.983
	Cash & Bank Balances	1631.232	4328.149	1851.106
	Other Current Assets	9.413	15.989	2.135
	Loans & Advances	1140.624	541.383	951.047
Total Current Assets		4505.280	7281.568	5698.220
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1578.950	601.006	94.838
	Other Current Liabilities	2361.094	3111.155	2399.351
	Provisions	31.236	19.536	9.177
Total Current Liabilities		3971.280	3731.697	2503.366
Net Current Assets		534.000	3549.871	3194.854
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		18128.299	13346.163	8962.399

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	10571.828	12320.111	8256.571
		Other Income	452.779	273.616	435.954
		TOTAL (A)	11024.607	12593.727	8692.525
Less	EXPENSES
		General Expenses	7093.252	9596.454	5789.576
		Administrative and Other Expenses	195.849	434.184	171.568
		TOTAL (B)	7289.101	10030.638	5961.144
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		3735.506	2563.089	2731.381
Less	FINANCIAL EXPENSES (D)		315.552	200.208	291.340
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		3419.954	2362.881	2440.041
Less/ Add	DEPRECIATION/ AMORTISATION (F)		740.831	806.710	832.324
	PROFIT BEFORE TAX (E-F) (G)		2679.123	1556.171	1607.717
Less	TAX (H)		559.564	179.970	182.902
	PROFIT AFTER TAX (G-H) (I)		2119.559	1376.201	1424.815
	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		3509.790	2255.598	1086.102
	APPROPRIATIONS
		Transfer to General Reserve	190.000	140.000	145.000
		Transfer to Debenture Redemption Reserve	24.227	17.990	17.990
	BALANCE CARRIED TO THE B/S		5463.575	3509.790	2383.908
	IMPORTS
		Stores & Spares	275.896	18.641	82.073
		Capital Goods	1099.978	2119.531	0.000
	TOTAL IMPORTS		1375.874	2138.172	82.073
	Earnings Per Share (Rs.)		6.23	4.05	4.19

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	19.23	10.93	16.39
Net Profit Margin (PBT/Sales)	(%)	25.34	12.63	19.47
Return on Total Assets (PBT/Total Assets}	(%)	17.59	13.45	15.22
Return on Investment (ROI) (PBT/Networth)		0.27	0.20	0.25
Debt Equity Ratio (Total Liability/Networth)		1.26	1.23	0.79
Current Ratio (Current Asset/Current Liability)		1.13	1.95	2.28

LOCAL AGENCY FURTHER INFORMATION

NOTE:

Registered Office of the company has been shifted from Lanco House, 141 Avenue 8, Banjara Hills, Hyderabad-500034, Andhra Pradesh, India to the present address w.e.f. 18.01.2008.

FORM 8

Corporate identity number of the company	U40101AP1995PLC021459
Name of the company	LANCO KONDAPALLI POWER LIMITED
Address of the registered office or of the principal place of business in India of the company	Plot No.4, Software Units Layout, Hitec City, Madhapur, Hyderabad-500081, Andhra Pradesh, India
This form is for	Modification of charge
Type of charge	Immovable property Any Interest in Immovable Property
Particular of charge holder	Bank of Baroda, 3-6-262/6, Tirumala Estates, 3^rd Floor, Himayat Nagar, Hyderabad-500029, Andhra Pradesh, India
Nature of instrument creating charge	No instrument was executed. A mortgage by deposit of title deeds was created by the company on 10th January 2011 in favour of IFCI Limited, IFCI Limited. acting as security trustee for itself and for benefit of Bank of Baroda, State Bank of India, Canara Bank and Axis Bank in respect of immovable properties situate at Village Kondapalli, Ibrahimpatnam, Krishna District , AP to secure the loans of Rs.5362.000 millions
Date of instrument Creating the charge	10.01.2011
Amount secured by the charge	Rs.5362.000 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest (1) BOB-3% above base rate (2) SBI-4% above base rate (3) CB-Base rate plus 3.5% p.a.(4) AB-Base rate plus 2.75% p.a. subject to changes from time to time. Terms of repayment On demand Margin 25% on Stocks and Book debts, 5% on Bank Guarantee and Letter of Credit. Extent and operation of the charge Charge operates as security for repayment of working capital facilities of Rs.5362.000 millions together interest and other monies payable by the Company to the BOB, SBI, CB and AB and BOB being the lead Bank.
Charge identification number of the charge to be modified	80007236
Date of instrument modifying the charge	30.12.2010
Particulars of the present modification	The working capital loan of Rs.5362.000 millions of Bank of Baroda, State Bank of India, Canara Bank and Axis Bank originally secured by Joint supplemental Deed of Hypothecation dated 30.12.2010 is now additionally secured by mortgage of deposit of the title deeds dated 10.01.2011 over immovable properties.

FIXED ASSETS

· Land Side Development

· Building

· Plant and Machinery

· Office Equipment

· Furniture and Fixture

· Vehicles

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.44.89
UK Pound	1	Rs.73.85
Euro	1	Rs.64.76

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	6
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--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	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	-

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