MIRA INFORM REPORT

Report Date :

21.04.2012

IDENTIFICATION DETAILS

Name :	WATSON PHARMA PRIVATE LIMITED
Registered Office :	21-22, Kalpataru Square, Kondivita Lane, Off Andheri Kurla Road, Andheri (East), Mumbai – 400 059, Maharashtra
Country :	India
Financials (as on) :	31.12.2010
Date of Incorporation :	21.10.2005
Com. Reg. No.:	11-156968
Capital Investment / Paid-up Capital :	Rs.550.025 Millions
CIN No.: [Company Identification No.]	U24230MH2005PTC156968
TAN No.: [Tax Deduction & Collection Account No.]	MUMW02844C
PAN No.: [Permanent Account No.]	AAACW6074D
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer of Drugs and Pharmaceuticals.
No. of Employees :	700 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (58)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 16200000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a subsidiary of Watson Laboratories Inc., USA. It is a well established company having fine track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal 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.

INFORMATION PARTED BY

Name :	Mr. Rajesh Sharma
Designation :	Finance Department
Contact No.:	91-22-66886801

LOCATIONS

Registered Office :	21-22, Kalpataru Square, Kondivita Lane, Off Andheri Kurla Road, Andheri (East), Mumbai – 400 059, Maharashtra, India
Tel. No.:	91-22-66886700
Fax No.:	91-22-66886799
E-Mail :	rajesh.sharma@watsonpharm.co.in sekhchem@bom3.vsnl.net.in muralidharan.cs@watsonpharma.co.in shivshanker.shenoy@watsonpharm.co.in vishal.kulkarni@watsonpharm.co.in manoj.ehalve@watsopharm.co.in
Website :	www.watson.com
Factory 1 :	Plot No. A/3 to a/6, Phase I/A, Verna Industrial Estate, Salcette, Goa – 403 173, India
Factory 2 :	Plot No.15, MIDC, Additional Ambernath Anand Nagar, Ambernath (East), Maharashtra, India

DIRECTORS

AS ON 22.06.2011

Name :

Mr. Muralidharan Sundaresan Chinnadharavaram

Designation :

Director

Address :

302 B Wing, Avalon Building, Hirenandani Garden, Powai, Mumbai – 400 076, Maharashtra, India

Date of Birth/Age :

05.02.1963

Date of Appointment :

20.05.2010

DIN No.:

00014740

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U24230GJ1984PLC007440	CONCORD BIOTECH LIMITED	Director	10-02-06	10-02-06	29-09-07	Active	NO
2	U24230MH2005PTC156968	WATSON PHARMA PRIVATE LIMITED	Director	21-06-10	20-05-10	-	Active	NO

Name :

Mr. David Adam Irving Buchen

Designation :

Director

Address :

1967, LA France Avenue, South Pasadena, California – 91030, United States of America

Date of Birth/Age :

22.06.1964

Date of Appointment :

21.10.2005

DIN No.:

00839184

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U24230MH2005PTC156968	WATSON PHARMA PRIVATE LIMITED	Director	30-11-06	21-10-05	Active	NO
2	U24100MH1970FLC014927	SEKHSARIA CHEMICALS LIMITED	Director	29-09-06	16-03-06	Amalgamated	NO
3	U24230MH1981PTC024570	SEKHSARIA LABORATORIES PRIVATE LIMITED	Director	29-09-06	16-03-06	Amalgamated	NO
4	U24239MH2006PTC164194	WELESEARCH DRUG MONITORING PRIVATE LIMITED	Director	21-11-06	21-11-06	Amalgamated	NO

Name :

Mr. Jayant Shyam Sunder Bapna

Designation :

Director

Address :

6 Cutler CT, Suffern, New York 10901, United States of America

Date of Birth/Age :

17.07.1958

Date of Appointment :

23.05.2011

DIN No.:

03511093

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U24230MH2005PTC156968	WATSON PHARMA PRIVATE LIMITED	Director	22-06-11	23-05-11	Active	NO

Name :

Mr. Robert Allan Stewart

Designation :

Director

Address :

Heritage Village VIII, 4 Quail Run BLK 47.02 LT 1.02 Randolph New Jersey - 07869, United States of America

Date of Birth/Age :

03.05.1967

Date of Appointment :

23.05.2011

DIN No.:

03515778

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U24230MH2005PTC156968	WATSON PHARMA PRIVATE LIMITED	Director	22-06-11	23-05-11	Active	NO

Name :

Mr. Philip Abraham Biju

Designation :

Director

Address :

Supreme Mill Tower, Flat 204, Alto Monte, Margao – 403 601, Goa, India

Date of Birth/Age :

04.11.1969

Date of Appointment :

23.05.2011

DIN No.:

03515838

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U24230MH2005PTC156968	WATSON PHARMA PRIVATE LIMITED	Director	22-06-11	23-05-11	Active	NO

Name :

Ronald Jefferey Morrod

Designation :

Managing Director

Address :

Hotel Leela Kempinski, Sahar Road, Mumbai – 400 059, Maharashtra, India

Date of Birth/Age :

20.06.1957

Date of Appointment :

03.08.2010

DIN No.:

03139797

Name :

Patrick Gerard Brunner

Designation :

Director

Address :

10231, Key Plum ST, Plantation, Florida – 333248265, United States of America

Date of Birth/Age :

13.06.1963

Date of Appointment :

20.05.2010

DIN No.:

03024470

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U24230MH2005PTC156968	WATSON PHARMA PRIVATE LIMITED	Director	21-06-10	20-05-10	Active	NO

Name :

Francois Andre Menard

Designation :

Director

Address :

12 Governor, Dr. Basking Ridge NJ, New Jersey 07920, United States of America

Date of Birth/Age :

02.04.1959

Date of Appointment :

03.08.2010

DIN No.:

03081831

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U24230MH2005PTC156968	WATSON PHARMA PRIVATE LIMITED	Director	22-06-11	03-08-10	Active	NO

Name :

Mr. Chandrashekhar Gopal Kaluskar

Designation :

Director

Address :

25/2A, Ramkrishna Nagar, Highway, Thane – 400 604, Maharashtra, India

Date of Birth/Age :

29.02.1952

Date of Appointment :

23.05.2011

DIN No.:

03511089

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U24230MH2005PTC156968	WATSON PHARMA PRIVATE LIMITED	Director	22-06-11	23-05-11	Active	NO

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 22.06.2011

Names of Shareholders	No. of Shares
Watson Laboratories Inc., California, USA	55002431
Dhaval Kishore Vussonji	1
Kalpana Vithaldas Merchant	6
Shailesh Vaidya	6
Falguni Desai	6
Kedar Desai	6
Gary Ivan Charles Holloway	5
Total	55002461

AS ON 22.06.2011

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]	99.999945
Directors or relatives of directors	0.000009
Other top fifty shareholders	0.000046
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Drugs and Pharmaceuticals.

Products :

Item Code No.	Product Description
2942 00 90	Imiquimod Bulk Drug
3004 90 69	Carisoprodol Tablets
3004 90 39	Minocycline Capsules
3004 39 12	Other – Prednisone Tablets
3004 90 71	Other – Lisinopril Tablets

Exports :

Products :

Pharmaceutical Drugs

Countries :

· European Country

· Germany

· Italy

Imports :

Products :

Pharmaceutical Drugs

Countries :

European Countries

Terms :

Selling :

Cash / Credit

Purchasing :

Cash / Credit

PRODUCTION STATUS (AS ON 31.12.2010)

Licensed and Installed Capacity:

Drugs and Pharmaceuticals	Units	Licensed Capacity	Installed Capacity @
		Quantity	Quantity
Active Pharmaceuticals Ingredients	Tonnes	*	76
Formulations – Tablets and Capsules	Million Nos.	*	3310

* Licensed Capacity is not applicable as industrial licensing has been abolished in respect of theses products vide notification No.SO-477 (E) dated 25^th July, 1991 as amended vide press release note No.4 of the 1994 series dated 25^th October 1994 issued by the department of Industrial Development, Ministry of Industry, Government of India

@ Installed Capacity (active pharmaceuticals Ingredients at Ambernath plants on triple shift basis, Formulations at Goa plant on triple shift basis and formulations at Ambernath plant on single shift basis) being a technical matter, is certified by the management and relied upon by the auditors.

Production **

Drug and Pharmaceuticals	Units	31.12.2010
		Quantity
Active pharmaceuticals ingredients	Tonnes	48
Formulations –Tablets and Capsules	Million Nos.	2293

** Includes Quantities captively consumed.

GENERAL INFORMATION

Customers :

Wholesalers, End Users and Manufacturing Company

No. of Employees :

700 (Approximately)

Bankers :

v ABN Amro Bank,

Branch Fort, Mumbai, Maharashtra, India

v HDFC Bank Limited,

HDFC Bank House Senapati Bapat Marg, Lower Parel (West), Mumbai – 400013, Maharashtra, India

v Standard Chartered Bank,

Mumbai Branch, 90 MG Road, Mumbai – 400001, Maharashtra, India

Facilities :

Secured Loans	31.12.2010 (Rs. In Millions)		31.12.2009 (Rs. In Millions)
Term Loan – Foreign Currency Loan form a Bank.	0.000		75.024
Total	0.000		75.024
NOTE: 1. Term loan – Foreign Currency Loan from a Bank is secured by specific mortgage / charge on immovable property situated at Plot No. N-15 additional MIDC Area, Jombivali, Ambernath District, Thane and Hypothecation of all the movable assets both present and future. 2. Amount repayable within one year Nil. [Previous Year Rs.75.024 Millions]
Unsecured Loans		31.12.2010 (Rs. In Millions)		31.12.2009 (Rs. In Millions)
Term Loan – Foreign Currency Loan from the Holding Company		911.000		937.800
Total		911.000		937.800

Banking Relations :	--
Auditors :
Name :	Lovelock and Lewes Chartered Accountants
Address :	552, Veer Savarkar Marg, Shivaji Park, Dadar, Mumbai – 400 028, Maharashtra, India
Pan No :	AABFL5878L
Holding Company :	Watson Laboratories Inc., USA
Ultimate Holding Company:	Watson Pharmaceuticals Inc., USA
Fellow Subsidiaries :	v Arrow International Limited, Malta v Arrow No.7 Limited, U.K. v Cobalt Pharmaceuticals Inc., Canada

CAPITAL STRUCTURE

AS ON 31.12.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
75000000	Equity Shares	Rs.10/- each	Rs.750.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
55002461	Equity Shares	Rs.10/- each	Rs.550.025 Millions

NOTES:

a) 18,965,994 shares were allotted as fully paid-up pursuant to the scheme of amalgamation with Sekhsaria Chemicals Limited, Sekhsaria Laboratories Private Limited and Welesearch Drug Monitoring Private Limited without payments being received in cash.

b) 55,002,432 shares are held by Watson Laboratories, Inc, USA the holding company and its nominee.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2010	31.12.2009	31.12.2008
SHAREHOLDERS FUNDS
1] Share Capital		550.025	550.025	550.025
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		3496.194	2840.105	2072.648
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		4046.219	3390.130	2622.673
LOAN FUNDS
1] Secured Loans		0.000	75.024	159.097
2] Unsecured Loans		911.000	937.800	497.178
TOTAL BORROWING		911.000	1012.824	656.275
DEFERRED TAX LIABILITIES		297.753	244.208	108.209
TOTAL		5254.972	4647.162	3387.157
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2991.737	2364.651	1909.666
Capital work-in-progress		102.923	488.221	380.994
INVESTMENT		50.002	0.002	0.123
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1028.204	1349.350	781.201
	Sundry Debtors	456.415	441.886	328.531
	Cash & Bank Balances	400.327	90.317	582.878
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	727.996	640.426	407.654
Total Current Assets		2612.942	2521.979	2100.264
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	448.885	689.390	462.587
	Other Current Liabilities	17.317	29.987	529.610
	Provisions	36.430	8.314	11.693
Total Current Liabilities		502.632	727.691	1003.890
Net Current Assets		2110.310	1794.288	1096.374
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		5254.972	4647.162	3387.157

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2010	31.12.2009	31.12.2008
	SALES
		Income	4975.116	3697.155	2204.251
		Other Income
		TOTAL (A)	4975.116	3697.155	2204.251
Less	EXPENSES
		Office Expenses	3822.863	2529.993	1817.074
		Administrative Expenses
		Advertising Expenses
		TOTAL (B)	3822.863	2529.993	1817.074
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		1152.253	1167.162	387.177
Less	INTEREST (D)		12.946	17.475	13.631
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		1139.307	1149.687	373.546
Less/ Add	DEPRECIATION/ AMORTISATION (F)		287.531	244.631	197.890
	PROFIT BEFORE TAX (E-F) (G)		851.776	905.056	175.656
Less	TAX (H)		195.687	137.599	44.859
	PROFIT AFTER TAX (G-H) (I)		656.089	767.457	130.797
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1032.113	264.656	133.859
	BALANCE CARRIED TO THE B/S		1688.202	1032.113	264.656
	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Exports	3715.991	2662.943	1564.609
		Freight and Insurance	6.085	6.486	19.301
		Income from Products Development Activities	1002.310	597.122	335.706
		Recovery towards Manufacturing Site Transfer Activities	174.026	195.459	153.559
		License Fees	10.138	1.440	21.916
		Exchange Gain (Net)	12.427	67.356	--
		Others	--	--	0.028
	TOTAL EARNINGS		4920.977	3530.806	2095.119
	IMPORTS
		Raw Materials	1842.562	1771.963	703.193
		Capital Goods	186.797	273.132	236.884
		Stores	72.402	23.104	12.785
	TOTAL IMPORTS		2101.761	2068.199	952.862
	Earnings Per Share (Rs.)		11.93	13.95	2.38

KEY RATIOS

PARTICULARS		31.12.2010	31.12.2009	31.12.2008
PAT / Total Income	(%)	13.19	20.76	5.93
Return on Total Assets (PBT/Total Assets}	(%)	15.20	18.52	4.38
Return on Investment (ROI) (PBT/Networth)		0.21	0.27	0.07
Debt Equity Ratio (Total Liability/Networth)		0.35	0.51	0.63
Current Ratio (Current Asset/Current Liability)		5.20	3.47	2.09

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1) Year of Establishment	Yes
2) Locality of the firm	Yes
3) Constitutions of the firm	Yes
4) Premises details	No
5) Type of Business	Yes
6) Line of Business	Yes
7) Promoter’s background	Yes
8) No. of employees	Yes
9) Name of person contacted	Yes
10) Designation of contact person	Yes
11) Turnover of firm for last two years	Yes
12) Profitability for last three years	Yes
13) Reasons for variation <> 20%	------
14) Estimation for coming financial year	No
15) Capital in the business	Yes
16) Details of sister concerns	Yes
17) Major suppliers	No
18) Major customers	No
19) Payments terms	Yes
20) Export / Import details (if applicable)	Yes
21) Market information	------
22) Litigations that the firm / promoter	------
23) Banking Details	Yes
24) Banking facility details	Yes
25) Conduct of the banking account	------
26) Buyer visit details	------
27) Financials, if provided	Yes
28) Incorporation details, if applicable	Yes
29) Last accounts filed at ROC	Yes
30) Major Shareholders, if available	Yes

NOTE:

The registered office of the company has been shifted from 201/301, Corporate Enclave, B.D. Sawant Marg Chakala, Andheri (East), Mumbai – 400 099, Maharashtra to the present address w.e.f. 06.05.2011.

BUSINESS PERFORMANCE:

The Company has registered gross revenue of Rs.4975.116 millions with Operating Profit (PBIDT) at Rs.1152.253 millions and Profit after tax of Rs.656.089 millions.

MANUFACTURING OPERATIONS

FORMULATION MANUFACTURING

The company has manufactured 2284 million tablets/capsules at Goa dosage manufacturing site. The site has performed in line with the expectations of the customer (Watson Laboratories Inc) in terms of cost and service levels.

BULK DRUGS (DRUG SUBSTANCES)

The company is strongly focusing on the development and manufacturing of Active Pharmaceutical Ingredients (API), to meet the objective of being a vertical integrated player. The facility expansion undertaken during the previous year in Ambernath API plant shall facilitate in meeting the above objective.

CONTINGENT LIABILITIES:

Particulars	31.12.2010 (Rs. in millions)
(a) Claims against the company not acknowledged as debts
(i) Income-tax matters decided against the company in respect of which the company has preferred an appeal	11.663
(ii) Excise matters	34.862
(iii) Service Tax matter	1.022
(b) Outstanding Letters of Credit	2.460
(c) Export Obligation in respect of Capital Goods imported under Export Promotion Capital Goods Scheme	3.684

Form: 8

Corporate identity number of the company	U24230MH2005PTC156968
Name of the company	WATSON PHARMA PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	201/301, Corporate Enclave, B D Sawant Marg Chakala, Andheri, Mumbai – 400 099, Maharashtra, India
This form is for	Creation of charge
Type of charge	Book Debts Movable property (not being pledge) Floating charge
Particular of charge holder	CIN No: L65920MH1994PLC080618 HDFC Bank Limited, HDFC Bank House Senapati Bapat Marg, Lower Parel (West), Mumbai – 400 013, Maharashtra, India E-Mail: aditya.puri@hdfcbank.com
Nature of instrument creating charge	Letter of hypothecation of stock and book debts
Date of instrument Creating the charge	23.06.2009
Amount secured by the charge	Rs.250.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest As communicated by Bank from time to time Terms of repayment As per bank sanction letter Margin As communicated by Bank from time to time Extent and operation of the charge Hypothecation by way of first charge on stock and book debts both present and future
Particulars of the property charged	Hypothecation by way of first charge on stock and book debts both present and future

FIXED ASSETS:

Intangible Assets:

v Technical know-how

v Computer Software

v Others

Tangible Assets:

v Leasehold Land

v Buildings

v Plant and Machinery

v Office Equipments

v Computers

v Laboratory Equipment

v Furniture and Fittings

v 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.51.89
UK Pound	1	Rs.83.18
Euro	1	Rs.68.06

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	6
--RESERVES	1~10	7
--CREDIT LINES	1~10	6
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--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		58

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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