MIRA INFORM REPORT

Report Date :

21.03.2011

Note : The correct name of the company is SHAKTI PUMPS (INDIA) LIMITED.

IDENTIFICATION DETAILS

Name :	SHAKTI PUMPS (INDIA) LIMITED
Registered Office :	Plot No. 401, 402 and 413, Sector-III, Industrial Area, Pithampur-454774, Madhya Pradesh
Country :	India
Financials (as on) :	30.06.2010
Date of Incorporation :	21.04.1995
Com. Reg. No.:	009327
CIN No.: [Company Identification No.]	L29120MP1995PLC009327
TAN No.: [Tax Deduction & Collection Account No.]	BPLS02081C
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturers of Stainless Steel Submersible Pumps.

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

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

Maximum Credit Limit :	USD 2000000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be usually 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/ Works :	Plot No. 401, 402 and 413, Sector-III, Industrial Area, Pithampur-454774, Madhya Pradesh, India
Tel. No.:	91-7292-410500/ 410699
Fax No.:	91-7292-407044/ 400371
E-Mail :	mkt@shaktipumps.com spilit@satyam.net.in cs@shaktipumpsindia.com
Website :	http://www.shaktipumps.com
Branch :	Shakti Pumps – Turkey Pompa San Ve Dis Tic. Limited. Sti. Perpa Ticaret Merkezi A Blok, Kat 11 No.1328 Okmeydani, Istanbul, Turkey
Tel. No.:	GSM : 90-538-3910351 Tel. No.: 90-212-2202690
Fax No.:	90-212-2202693
E-Mail :	atul@shaktipumps.com, spilit@satyam.net.in

DIRECTORS

As On : 31.12.2010

Name :	Mr. Manu Punnoose
Designation :	Director
DIN No :	001645461
Name :	Mr. Dinesh Patidar
Designation :	Managing Director
DIN No :	00549552
Name :	Mr. Sunil Patidar
Designation :	Executive Director
DIN No :	02561763
Name :	Mr. Shyam Sunder Raghuwanshi
Designation :	Independent Director
DIN No :	02285727
Name :	Mr. Lalit Garg
Designation :	Independent Director
DIN No :	00188146
Name :	Mr. Prabhakar Nene
Designation :	Independent Director
DIN No :	00228620
Name :	Mr. Ramesh Patidar
Designation :	Additional Director
DIN No :	00931437
Name :	Mr. Raj Kumar Jain
Designation :	Additional Director
DIN No :	01092456

KEY EXECUTIVES

Name :	Mr. Manoj Maheshwari
Designation :	Secretary
PAN No :	AJCPM2032K

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.12.2010

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Any Others (Specify)	3089000	49.64
Directors & their Relatives & Friends	3089000	49.64
Sub Total	3089000	49.64
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	3089000	49.64
(B) Public Shareholding
(1) Institutions
(2) Non-Institutions
Bodies Corporate	1657985	26.64
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	1054176	16.94
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	367596	5.91
Any Others (Specify)	54143	0.87
Clearing Members	12494	0.20
Non Resident Indians	41649	0.67
Sub Total	3133900	50.36
Total Public shareholding (B)	3133900	50.36
Total (A)+(B)	6222900	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers of Stainless Steel Submersible Pumps.

Products :

Product Description	Item Code No.
Submersible Pumps	8413

PRODUCTION STATUS (As On 30.06.2010)

Particulars	Unit	Licensed Capacity	Actual Production
Submersible Pumps	Nos.	600000	123375

GENERAL INFORMATION

Bankers :

· Barclays Bank Plc, 601/603, Ceejay House, Shivsagar Estate, Dr. Annie Besant Road, Worli, Mumbai-400018, Maharashtra, India

· State Bank of India

· State Bank of Indore

Facilities :

SECURED LOAN	30.06.2010 Rs. In Millions	30.06.2009 Rs. In Millions
Working Capital Loan
Cash Credit, Packing Credit, PCFC, Buyer's Credit from Banks	503.565	382.427
Liquid Fund
Madhya Pradesh Financial Corporation	0.000	24.000
Term Loan
State Bank of Indore	31.624	12.203
State Bank of India	24.864	11.063
Madhya Pradesh Financial Corporation	49.980	60.000
External Commercial Borrowings
From Banks	169.875	0.000
Vehicle Loan
[Secured against respective vehicles]	1.451	1.100
Total	781.359	490.793

Note-1 Borrowing from banks are secured by way of :-

(a) First parri-passu charge by way hypothecation of the Company's Stock comprising of raw materials, stock in process, finished goods, consumable stores and spares and receivables and other current assets.

(b) Second pari passu charge by way of Equitable Mortgage of the Company's land and Building situate at Sector-A, Mhow Neemuch Road, Pithampur and Plot No. F-14 and F-15, Special Economic Zone, Pithampur and Plot No. 401, 402 and 413, Industrial Area, Sector-III, Pithampur, District- Dhar and

(c) Personal Guarantee of Directors

Note-2 By way of equitable mortgage of Land, Building, Plant and Machineries (Existing and Future) of the future) of the Company situated at plot no. 401, 402 and 413 Industrial Area, Sector-III, Pithampur, District-Dhar, Madhya Pradesh, India

Note-3

(a) First pari passu charge by way of Equitable Mortgage of the Company's land and Building situate at Sector-A, Mhow Neemuch Road, Pithampur and Plot No. F-14 and F-15, Special Economic Zone, Pithampur and Plot No. 401, 402 and 413, Industrial Area, Sector-III, Pithampur, District- Dhar and

(b) Second parri-passu charge by way hypothecation of the Company's Stock comprising of raw materials, stock in process, finished goods, consumable stores and spares and receivables and other current assets.

UNSECURED LOAN	30.06.2010 Rs. In Millions	30.06.2009 Rs. In Millions
From Corporate Bodies	0.000	0.551
Foreign Currency Convertible Bonds	0.000	265.083
Total	0.000	265.634

Banking Relations :	--
Financial Institute :	Ø Madhya Pradesh Financial Corporation.
Auditors :
Name :	Vinay Gandhi and Associates Chartered Accountant
Address :	105, Man Haritage, 6/2, South Tukoganj, Near High Court, Indore-452001, Madhya Pradesh, India
Promoters Group Company :	Ø SPIL Industries Limited

CAPITAL STRUCTURE

As On : 30.06.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
9000000	Equity Shares	Rs. 10/- each	Rs. 90.000 millions

Issued Capital:

No. of Shares	Type	Value	Amount
6403100	Equity Shares	Rs. 10/- each	Rs. 64.031 millions

Subscribed & Paid-up Capital

No. of Shares	Type	Value	Amount
6222900	Equity Shares	Rs. 10/- each	Rs. 62.229 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		30.06.2010	30.06.2009	30.06.2008
SHAREHOLDERS FUNDS
1] Share Capital		62.229	62.229	62.229
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		445.099	348.019	277.226
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		507.328	410.248	339.455
LOAN FUNDS
1] Secured Loans		781.359	490.793	337.105
2] Unsecured Loans		0.000	265.634	266.422
TOTAL BORROWING		781.359	756.427	603.527
DEFERRED TAX LIABILITIES		27.229	19.684	14.318
TOTAL		1315.916	1186.359	957.300
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		523.228	462.323	364.811
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	22.813
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	517.684	411.840	323.869
	Sundry Debtors	296.093	269.538	222.726
	Cash & Bank Balances	1.545	1.117	1.052
	Other Current Assets	25.130	16.523	41.045
	Loans & Advances	91.275	50.888	42.196
Total Current Assets		931.727	749.906	630.888
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	149.627	35.812	51.213
	Other Current Liabilities	0.479	0.540	0.726
	Provisions	14.692	11.359	9.273
Total Current Liabilities		164.798	47.711	61.212
Net Current Assets		766.929	702.195	569.676
MISCELLANEOUS EXPENSES		25.759	21.841	0.000
TOTAL		1315.916	1186.359	957.300

PROFIT & LOSS ACCOUNT

	PARTICULARS		30.06.2010	30.06.2009	30.06.2008
	SALES
		Income	1316.805	1067.458	1043.727
		Other Income	7.681	6.469	2.464
		TOTAL (A)	1324.486	1073.927	1046.191
Less	EXPENSES
		Cost of Materials	817.783	775.567	747.741
		Manufacturing Expenses	37.162	29.534	38.687
		Employees Remuneration	80.308	61.800	36.994
		Increase/(Decrease) in Finished Goods	(46.410)	(116.824)	(22.448)
		Selling and Distribution Expenses	146.278	112.769	66.788
		Legal and Professional Charges	4.186	2.781	1.864
		Repair and Maintenance Charges	1.730	1.204	2.434
		Administrative Expenses	25.033	21.862	19.116
		Taxes and Duties	16.245	5.390	0.000
		Deferred Expenditure W/O	6.440	5.280	5.703
		Other Expenditure	0.000	0.000	0.308
		TOTAL (B)	1088.755	899.363	897.187
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		235.731	174.564	149.004
Less	FINANCIAL EXPENSES (D)		81.247	57.205	44.311
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		154.484	117.359	104.693
Less/ Add	DEPRECIATION/ AMORTISATION (F)		34.866	29.155	25.589
	PROFIT BEFORE TAX (E-F) (G)		119.618	88.204	79.104
Less	TAX (H)		12.071	10.131	7.661
	PROFIT AFTER TAX (G-H) (I)		107.547	78.073	71.443
Less	APPROPRIATIONS
		Proposed Dividend	6.223	6.223	6.223
		Tax on Dividend	1.057	1.057	1.050
	BALANCE CARRIED TO THE B/S		100.267	70.793	64.170
	EXPORT VALUE		749.468	543.027	517.726
	IMPORTS
		Raw Materials	186.847	124.994	148.929
	TOTAL IMPORTS		186.847	124.994	148.929
	Earnings Per Share (Rs.)		17.28	12.54	11.48

QUARTERLY RESULTS

(Rs. In Millions)

PARTICULARS	30.09.2010	31.12.2010
	1^st Quarter	2^nd Quarter
Net Sales	372.680	447.750
Total Expenditure	313.710	381.220
PBIDT (Excl OI)	58.970	66.530
Other Income	4.740	0.110
Operating Profit	63.710	66.640
Interest	18.290	17.250
Exceptional Items	0.000	53.200
PBDT	45.420	102.590
Depreciation	10.210	10.330
Profit Before Tax	35.210	92.260
Tax	2.100	23.390
Provisions and contingencies	0.000	0.000
Profit After Tax	33.110	68.870
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	33.110	68.870

KEY RATIOS

PARTICULARS		30.06.2010	30.06.2009	30.06.2008
PAT / Total Income	(%)	8.12	7.27	6.83
Net Profit Margin (PBT/Sales)	(%)	9.08	8.26	7.58
Return on Total Assets (PBT/Total Assets}	(%)	8.22	7.28	7.77
Return on Investment (ROI) (PBT/Networth)		0.24	0.22	0.23
Debt Equity Ratio (Total Liability/Networth)		1.92	2.01	2.00
Current Ratio (Current Asset/Current Liability)		5.65	15.72	10.31

LOCAL AGENCY FURTHER INFORMATION

OPERATING RESULTS AND BUSINESS

Overall 2009-10 has been a very satisfying year. During the year, the Company has registered a turnover Rs.1316.804 millions as compared Rs.1067.458 millions showing an increase of 23.36% over the previous year turnover. The export of the Company increased from Rs. 595.134 millions to Rs. 759.077 millions showing an increase of 27.55% over the previous year owing to enhanced production and better product/market penetration.

The Company earned profit before depreciation, interest and tax of Rs. 235.731 millions as against Rs. 174.564 millions in the previous year, showing a growth of 35.04%.

FUTURE OUTLOOK

1. SRN vertical multistage centrifugal pumps

Introduction

The SRN pump is a non-self priming, vertical multistage centrifugal pump. The inline design enables the pump to be installed in a horizontal one pipe system where the suction and discharge ports are in the same horizontal plane and have the same pipe dimensions. This design provides a more compact pump design and pipe work.

SHAKTI SRN pumps come with various pump sizes and various numbers of stages to provide the flow and the pressure required. SRN pumps are suitable for a variety of applications from pumping of potable water to pumping of chemicals. The pumps are therefore used in a wide diversity of pumping systems where the performance and material of the pump meet specific demands.

The pump unit comprises optimized hydraulics, various types of connections, an outer sleeve, a top and various other parts. SRN pumps are available in various material versions according to the pumped liquid.

Features and benefits

· Reliability

· High efficiency

· Service friendly

· Space saving

· Suitable for slightly aggressive liquids

Applications

The pumps are suitable for liquid transfer in

v Washing systems

v Cooling and air conditioning systems

v Water supply system

v Water treatment system

v Fire fighting system

v Industrial plants

v Boiler feeding system.

2. Eletric motors (energy efficient centrifugal motors)

Introduction

In today’s power scenario, we are facing a major power crunch. Day by day, the gap between demand and supply of electric energy is widening at the rate of 3%. Bridging this gap from supply side is very difficult and expensive proposition. The only viable way in handling these crises, in addition to capacity addition, is the efficient use of available energy, which is possible by use of energy devices.

Electric motors are industry’s basic need. Electric motors consume around 70% of the total electricity used in the industrial sector. As motors are the largest users of electrical energy, even small efficiency improvements can produce very large savings across the country. As energy efficient motors produces the same shaft output power but draws less input power than a standard motor. Hence, EE motors consume less electricity than comparable standard motor.

Advantages

Ø Saves energy and money

Ø Near uniform efficiency from 50% to 100% of full load ensuring energy savings even at part load condition

Ø Short payback period

Ø Substantial savings after payback period

Applications

Ø Energy efficient motors are specially suited for industries which power intensive and equipments which run on constant load for long duration

Areas of application

· Booster pumps

· Compressors

· Fans

· Blowers

· Mills

· Crushers

· Conveyors

· Ring granulators

· Rubber mills

· Rubber mixers

· Disc refiners

3. Open well submersible pumps Application of open well submersible pumps

Industrial and public water supply schemes, domestic water supply, lift irrigation schemes. Drip / sprinkler irrigation schemes, fire lighting, booster application, cooling water circulation, ornamental fountain installation and air conditioning plants, dewatering of mines, offshore and platforms, among others.

Special features

NO suction and priming problems, No need of pump house, noiseless operations, single shaft for pump and motor ensures permanent correct alignment, high operating efficiency, extremely hardwearing water lubricated bearing, highly durable water cooled rewind able motor, can be easily dismantled and repaired.

MANAGEMENTS’ DISCUSSION AND ANALYSIS REPORT

i) Industry structure and development

The industry is registering a good growth in the submersible pumps – the Company’s main product. Several orders are expected from various State Governments/Government agencies and foreign customers. Efforts are being made for increasing energy efficiency through dealer net work.

ii) Opportunities and threats

There is significant change in the outlook compared with last year. The Company, with increased installed production capacity continues to enhance opportunities for growth by focusing on the introduction of innovated upgraded existing products/energy efficient submersible pumps. The Company faces the normal threats, risks and concerns, which are associated with competition from local and overseas manufacturers.

iii) Segment wise performance

The Company has only one segment namely submersible pumps.

iv) Outlook

In the current year, the Company is confident of growing much faster in comparison with the economy and agriculture, looking at the present level of response and orders and increased installed production capacity. The Company’s outlook on overseas markets and domestic market is positive on account of its strength in technology, cost and power saving.

FORM 8

Corporate identity number of the company	L29120MP1995PLC009327
Name of the company	SHAKTI PUMPS (INDIA) LIMITED
Address of the registered office or of the principal place of business in India of the company	Plot No. 401, 402 and 413, Sector-III, Industrial Area, Pithampur-454774, Madhya Pradesh, India
This form is for	Modification of charge
Type of charge	Immovable property
Particular of charge holder	Barclays Bank Plc, 601/603, Ceejay House, Shivsagar Estate, Dr. Annie Besant Road, Worli, Mumbai-400018, Maharashtra, India
Nature of instrument creating charge	Memorandum of Entry.
Date of instrument Creating the charge	26.05.2010
Amount secured by the charge	Rs. 207.000 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest As may be specified by the Bank from time to time. Terms of repayment As may be specified by the Bank from time to time. Margin As may be specified by the Bank from time to time. Extent and operation of the charge First Pari Passu Charge on the Immoveable Properties of the Company in favour of Barclays Bank Plc, to secure the repayment of financial facilities granted by Bank to the Company.
Short particulars of the property charged (Including location of the property)	Plot No.401 and 402,Sector-III,Industrial Area Pithampur, Dist. Dhar, Madhya Pradesh,adms.8362 Sq. Mtrs and Plot No.413,Sector-III,Industrial Area Pithampur, Dist. Dhar, Madhya Pradesh,adms.40470 Sq. Mtrs.
Charge identification number of the charge to be modified	10213311
Particulars of the present modification	Bank had granted financial facilities of Rs.207.000 millions which was secured by way of Hypothecation on Current Assets and Fixed Assets of the Borrower. Now, by this modification, Collateral Security offered on the Immoveable Property of the Company and the said charge is modified accordingly.

FIXED ASSETS

ü Land and Building

ü Plant and Machinery

ü Furniture and Fixture

ü Vehicle

ü Computer

ü Mould, Dies

WEBSIDE DETAILS

HISTORY

Subject supplies pump sets and motors in India. They guarantee quality pumps and motors along with energy saving water pumps India and submersible pumps India.

Subject has successfully developed its cost-efficient indigenous technology for the manufacture of fully fabricated stainless steel pump sets with a quality level at par with internationally recognized pump sets. The company with present level of quality has been successful in penetrating the international market and is on the way to broad base its exports by offering quality products that are energy efficient and eco-friendly at a modest price. The company has achieved the target of one million pumps per annum. It is exporting pump sets to more than 50 countries, developing as well as developed, where quality is well accepted.

Policy:

Subject takes care of the customer needs by supplying them quality products as per international standards for their total satisfaction.

The company is fully committed to effect timely deliveries and to extend effective services besides maintaining the quality levels.

PROFILE

Subject became a public limited company in 1995 and is engaged in manufacturing of Submersible pumps along with Submersible motors and associated controls panels in the name "Shakti". Shakti Pumps has successfully developed its cost efficient indigenous technology for manufacture of fully fabricated stainless steel pumps sets with the quality level at par with internationally recognized pump sets. The company has also obtained BIS certificate for ISI mark in 1989 and through continuous process improvement and streamlining the quality system at par the international standards have now acquired ISO: 9001:2000 certifications. Subject takes care of the customer's need by supplying them the quality product as per international standards for their total satisfaction.

They manufacture and export energy efficient pumps and motors

such as submersible pumps, SRN-booster pumps or submersible motors and many more. The company is fully committed to deliver timely and to extend effective services besides maintaining the quality levels. In pursuit of excellence, the company will adopt practices that support conservation, sustenance and rejuvenation of energy, environment and natural resources. This would be achieved by educating our people, continual improvement of technology and processes and application of research. This policy has been communicated to all employees and will be made available to public on demand. Their specialties are Stainless Steel Submersible pump sets from 0.5 H.P. to 60 H.P.

Innovation

Subject represents innovative and energy efficient products. At Shakti, empowerment of individuals has taken the front stage and could achieve more by working together than any person could ever achieve alone. To be a 100 Million - Dollar customer value enhancing international company by 2010. This will be achieved by becoming a global industry leader among the stainless steel submersible pump manufacturing companies. They shall strive for excellent service and customer delight through teamwork and consistent improvement in Quality Management System.

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.45.09
UK Pound	1	Rs.72.82
Euro	1	Rs.63.43

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	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--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	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		50

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

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