MIRA INFORM REPORT

Report Date :

26.06.2012

IDENTIFICATION DETAILS

Name :	LAFARGE INDIA PRIVATE LIMITED (w.e.f. 25.05.1999)
Formerly Known As :	INFRA CEMENT INDIA PRIVATE LIMITED
Registered Office :	Crescenzo, ‘B’ Wing, 10^th Floor, C-38 and C-39, “G” Block, Bandra-Kurla Complex, Bandra (East), Mumbai – 400 051, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	08.02.1999
Com. Reg. No.:	11-118229
Capital Investment/ Paid-up Capital :	Rs.3923.630 Millions
CIN No.: [Company Identification No.]	U26940MH1999PTC118229
TAN No.: [Tax Deduction & Collection Account No.]	MUML03158B
PAN No.: [Permanent Account No.]	AAACL4159L
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer and Exporter of Cements, Ordinary Portland Cements and Portland Pozzolana Cements.
No. of Employees :	500 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (64)

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 73000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. Available information indicates high financial responsibility of the company. 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 business dealing 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 DECLINED BY

Name :	Mr. Samir
Designation :	Accounts Manager
Contact No.:	91-22-66306510
Date :	25.06.2012

LOCATIONS

Registered/ Head Office :	Crescenzo, ‘B’ Wing, 10^th Floor, C-38 and C-39, “G” Block, Bandra-Kurla Complex, Bandra (East), Mumbai – 400 051, Maharashtra, India
Tel. No.:	91-22-66306510/ 11/ 61202633
Fax No.:	91-22-66306510/ 67692572
E-Mail :	chandana.dhar@in.lafarge.com info@lafarge-india.com rubi.chaturvedi@in.lafarge.com
Website :	www.lafarge-india.com
Location:	Owned
Regional Operations Office – East	Block D, 4^th Floor, 22, Camac Street, Kolkata – 700016, West Bengal, India
Tel No.:	91-33-39832100
Fax No.:	91-33-39832133
Factory :	Located at: · Sonadih, District Raipur, Chhattisgarh · Jojobera, District Singhbhum, Jharkhand · Arasmeta District Janjir – Champa, Chhattisgarh · Mejia District Bankura, West Bengal
Regional Sales Office :	Locate at: · West Bengal · Chhattisgarh · Jharkhand · Bihar · Orissa · North East

DIRECTORS

AS ON 17.08.2011

Name :		Mr. Ujjwal Batria
Designation :		Joint Managing Director
Address :		Flat No. 2C, Wallance Garden, 12B, Mandevelle Garden, Kolkata – 700 019, West Bengal, India
Date of Birth/Age :		24.12.1963
Date of Appointment :		16.11.2010
DIN No.:		01737515
Name :		Mrs. Priya Mohan Sinha
Designation :		Directors
Address :		B-787, Sushantlok Phase 1 (Near Sushantlok Vyapar Kendra), Gurgaon – 122 002, Haryana, India
Date of Birth/Age :		15.08.1940
Date of Appointment :		17.09.1999
DIN No.:		00035257
Name :		Mr. Bruno Marie Joseph Philip Lafont
Designation :		Director
Address :		21, Boulevard, Montrnorency 75116, Paris, France
Date of Birth/Age :		08.07.1956
Date of Appointment :		03.10.2003
DIN No.:		00091521
Name :		Mr. Isidoro Miranda
Designation :		Director
Address :		60 Boulevard Bineau, Neuilly Surseine 922200
Date of Birth/Age :		07.02.1959
Date of Appointment :		22.11.2007
DIN No.:		02115277
Name :		Mr. Jean Desazars De Mantgailhard
Designation :		Director
Address :		17, Boulevard, Delessert 75016, Paris, France
Date of Birth/Age :		26.07.1953
Date of Appointment :		17.09.1999
DIN No.:		00067288
Name :	Mr. Marin Kreigner
Designation :	Director
Address :	No.7 Jalan Balau Damansara Heights 50490 Kuala Lampar, Malaysia
Date of Birth/Age :	06.09.1961
Date of Appointment :	07.03.2002
DIN No.:	00077715
Name :	Mrs. Renu Sud Karnad
Designation :	Additional Director
Address :	BB-14, Greater Kailash, Enclave-II, New Delhi – 110 048, India
Date of Birth/Age :	03.09.1952
Date of Appointment :	17.08.2011
DIN No.:	00008064
Name :	Mr. Vinayak Chatterjee
Designation :	Additional Director
Address :	E-2278, Palam Vihar, Gurgaon – 122 017, Haryana, India
Date of Birth/Age :	30.09.1959
Date of Appointment :	17.08.2011
DIN No.:	00008933
Name :	Mr. Danilo Buscaglia
Designation :	Joint Managing Director
Address :	Flat Nos. 341 and 351, Tower 1, South City Tower, 375, Prince Anwar Shah Road, Kolkata – 700 068, West Bengal, India
Date of Birth/Age :	20.06.1965
Date of Appointment :	18.05.2011
DIN No.:	03519085
Name :	Mr. Deepak Shantilal Parekh
Designation :	Chairman
Date of Appointment :	17.08.2011
DIN No.:	00009078
Name :	Mr. Uday Chander Khanna
Designation :	Director
Date of Appointment :	17.08.2011
DIN No.:	00079129

KEY EXECUTIVES

Name :	Mr. Samir
Designation :	Accounts Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 17.08.2011

Names of Shareholders	No. of Shares
Financiere Lafarge, France	392363001
Societe Financiere Immobiliere et Mobiliere SAS, France	1
Total	392363002

AS ON 17.08.2011

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]	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Cements, Ordinary Portland Cements and Portland Pozzolana Cements.

Products :

Item Code No. (ITC Code)	252300
Product Description	Cement

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Cement	Metric Tonnes	NA	6550000	6780078

Licensed capacity per annum not indicated due to abolition of Industrial Licences as per notification no. 477(E) dated July 25, 1991 issued under Industries (Development and Regulation), Act, 1951.

*As certified by the management and relied upon by the Auditors.

GENERAL INFORMATION

No. of Employees :

500 (Approximately)

Bankers :

· Deutsche Bank Ag,

Deutsche Bank House, Hazariman Somani Marg, Fort, Mumbai – 400 001, Maharashtra, India

· State Bank of India,

Cag Branch Killick House, Charanjit Rai Marg, Mumbai – 400 001, Maharashtra, India

Facilities :

Secured Loans	31.03.2011 (12 Months) Rs. in millions	31.03.2010 (15 Months) Rs. in millions
Rupee term loans banks secured	0.000	200.000
Other external commercial borrowings secured	7433.571	7304.208
Working capital loans others secured	9.184	27.990
Total	7442.755	7532.198

NOTES

Term Loans from Banks were secured by immovable and movable assets related to Sonadih cement plant (Line 1) and movable assets related to Jojobera cement plant.

Secured by movable and immovable assets of clinkerisation unit at Sonadih cement plant (Line 2)and immovable and movable assets of cement grinding unit at Mejia cement plant

Secured by hypothecation of the Company's inventory and receivables.

Banking Relations :

-

Auditors :

Name :

S R Batliboi and Associates

Chartered Accountants

Address :

22, Camac Street, Block C, 3^rd Floor, Kolkata - 700 016, West Bengal India

Tel. No.:

91-33-66153400

Fax No.:

91-33-22817750

PAN No.:

AABFS3421N

Ultimate Holding Company :

Lafarge SA

Holding Company :

Financiere Lafarge

Subsidiaries :

· LI Eastern Private Limited

· LI Cement Private Limited

· Arasmeta Coal Mining Company Private Limited .

· Lafarge Rajasthan Cement Limited (Formerly known as GKW Cement Limited)

Fellow Subsidiaries :

· Lafarge North America Corporate

· PT Semen Andalas Indonesia

· Lafarge - Aggregates and Concrete Division

· Lafarge Umium Mining Private Limited

· Lafarge Asia Sdn Bhd

· Lafarge Surma

· Lafarge Cement Joint Venture Company, Vietnam

· Lafarge Cement Services (Philippines) Inc.

· Iligan Cement Corporation, Philippines

· Lafarge Canada Inc.

· Lafarge Boral Gypsum India Private Limited

· Lafarge-Aggregates and Concrete India Private Limited

· Centre Technique Inter-Unites Du Groupe Lafarge

· Lafarge Cement Zambia, Plc.

· Lafarge Chongging Cement Company Limited

· Lafarge International Services Singapore Pte Limited

· Lafarge Beiging Representative office

· Lafarge Sui on cement, China

· Lafarge A and C Malaysia

· Lafarge Kenya

· Cementia Trading AG

· Heracles Cement Company Limited

Associate :

Arasmeta Captive Power Company Private Limited

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
2000000000	Equity Shares	Rs.10/- each	Rs.20000.000 millions
1000000000	Equity Shares	Rs.10/- each	Rs.10000.000 millions
	Total		Rs.30000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
392363002	Equity Shares	Rs.10/- each	Rs.3923.630 millions

NOTE

The entire share capital is held by Financiere Lafarge, the Holding Company.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011 (12 Months)	31.03.2010 (15 Months)	31.12.2008
SHAREHOLDERS FUNDS
1] Share Capital		3923.630	4156.963	4156.963
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		14423.174	12816.785	5881.119
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		18346.804	16973.748	10038.082
LOAN FUNDS
1] Secured Loans		7442.755	7532.198	9595.871
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		7442.755	7532.198	9595.871
DEFERRED TAX LIABILITIES		1721.926	1581.596	1047.000
TOTAL		27511.485	26087.542	20680.953
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		16371.307	16525.494	9520.498
Capital work-in-progress		6488.062	4285.225	7672.785
INVESTMENT		2434.525	391.405	717.225
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1659.799	1412.215	1447.740
	Sundry Debtors	1176.876	403.953	395.259
	Cash & Bank Balances	1249.425	6109.914	6298.573
	Other Current Assets	2.071	171.749	94.645
	Loans & Advances	5198.796	3630.026	3642.045
Total Current Assets		9286.967	11727.857	11878.262
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	3896.046	4044.092	3388.702
	Other Current Liabilities	2415.801	2218.036	1881.048
	Provisions	757.529	580.311	3838.067
Total Current Liabilities		7069.376	6842.439	9107.817
Net Current Assets		2217.591	4885.418	2770.445
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		27511.485	26087.542	20680.953

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011 (12 Months)	31.03.2010 (15 Months)	31.12.2008
	SALES
		Sales (net of excise duty)	25.713	30.422	23.474
		Other Income	0.823	0.686	0.426
		TOTAL	26.536	31.108	23.900
Less	EXPENSES
		Office Expenses	18.405	19.478	14.967
		Administrative Expenses
		Advertising Expenses
		TOTAL	18.405	19.478	14.967
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		8.131	11.630	8.933
Less	INTEREST AND FINANCE CHARGES		0.742	0.595	0.455
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		7.389	11.035	8.478
Less/ Add	DEPRECIATION/ AMORTISATION		1.145	1.240	0.940
	PROFIT BEFORE TAX		6.244	9.795	7.538
Less	TAX		2.110	3.252	2.581
	PROFIT AFTER TAX		4.134	6.543	4.957
	IMPORTS
		Components & Spares	268.600	150.031	103.368
		Capital Goods	208.832	679.088	549.894
		Raw Materials	108.031	26.395	0.000
	TOTAL IMPORTS		585.463	855.514	653.262
	Earnings Per Share (Rs.)		0.01	0.02	0.01

KEY RATIOS

PARTICULARS		31.03.2011 (12 Months)	31.03.2010 (15 Months)	31.12.2008
PAT / Total Income	(%)	15.58	21.03	20.74
Net Profit Margin (PBT/Sales)	(%)	24.28	32.20	32.11
Return on Total Assets (PBT/Total Assets}	(%)	0.03	0.03	0.04
Debt Equity Ratio (Total Liability/Networth)		0.79	0.85	1.86
Current Ratio (Current Asset/Current Liability)		1.31	1.71	1.30

LOCAL AGENCY FURTHER INFORMATION

DETAILS OF SUNDRY CREDITORS

Particulars	31.03.2011 (12 Months) Rs. in millions	31.03.2010 (15 Months) Rs. in millions	31.12.2008 Rs. in millions
Creditors due small micro enterprises	3.631	0.560	0.011
Creditors due others	3892.415	4043.532	3388.691
Total	3896.046	4044.092	3388.702

Sr. No.	Check List by Info Agents
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 three years	Yes
12.	Profitability for last three years	Yes
13.	Reasons for variations <> 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.	Payment terms	No
20.	Export / Import details (is applicable)	No
21.	Market information	--
22.	Litigation that the firm / promoter involved in	--
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, is available	Yes

NOTE:

The Registered Office of the company has been shifted from Bakhtawar, 14^th Floor, 229 Nariman Point, Mumbai – 400 021, Maharashtra, India to the present address w.e.f. 01.10.2011.

PERFORMANCE REVIEW

In FY 2010-11, Company’s total sales volume (Cement + Clinker) recorded a growth of 7% (FY 2010-11: 6,768 Kt vs FY 2009-10: 6,336 Kt).

Company’s sales volume has gone up by 7% whereas net sales has increased only 2.4%, primarily on account of de-growth / subdued growth in various key cement consuming states driven by lower infrastructure spending, slowdown in realty sector and extended monsoon. Low cement demand specifically during the second half of the year adversely impacted the cement prices.

Further EBITDA has reduced by 12% due to increase in distribution cost, coal prices and other operating expenses.

FUTURE OUTLOOK

The medium to long term outlook remains strong; they expect GDP growth for 2011-2012 to be in the range of 8-8.5% which will sustain the growth momentum of cement demand.

To take advantage of the industry growth the Company is now accelerating development of green field projects and has commenced work on building the 2.6 MT new cement plant in Rajasthan. The ongoing 1.0 MT capacity expansion project at Jojobera is likely to be commissioned in September2011.

CONTINGENT LIABILITIES NOT PROVIDED FOR IN RESPECT OF

Particulars	31.03.2011 (12 Months) Rs. in millions
i) Guarantees / Letters of Credit given by Banks on behalf of the Company	576.013
ii) Claims against the Company not acknowledged as debts: -
a. Disputed demands in respect of Sales Tax by various sales tax authorities	335.887
b. Disputed demand in respect of Royalty on Limestone by the State of Chhattisgarh	722.261
c. Disputed demand in respect of Entry Tax by various tax authorities	47.422
d. Disputed demand in respect of Water cess by the State of Chhattisgarh	--
e. Disputed demand in respect of Excise Duty	527.409
f. Disputed demand in respect of Service Tax	8.651
g. Dispute relating to Income Tax	6.885
h. Claim from an engineering Company carrying out the project work for the Company for the delay in the execution of the project. The Company has also filed the counterclaims of Rs.133.300 millions with the arbitrators.	45.800
i. Other claims	3.351
Against these, amounts paid under protest or payments or adjustments not taken cognisance of	256.922
iii) Estimated amount of contracts remaining unexecuted on Capital Account and not provided for	5623.725
iv) The State of Chhattisgarh has filed a Revision Application challenging the adjudication order of the District Registrar and Collector of Stamps; Janjgir -Champa for alleged under-valuation of the properties, which the Company acquired from Raymond Limited Against this, Raymond Limited has filed a Special Leave Petition before the Honourable Supreme Court, which has stayed the proceedings before the Board of Revenue. The Collector of Stamps, Raipur has commenced enquiry proceedings under Section 47 (A)(3) of the Indian Stamp Act, 1899 questioning the amount of stamp duty paid by The Tata Iron and Steel Company Limited (TISCO) on transfer of the immovable properties at Sonadih from TISCO to the Company. The Company has filed a Writ Petition in the Honourable High Court of Bilaspur, Chhattisgarh challenging the enquiry commenced by the Collector of Stamps. The matter is pending before the High Court. The Company’s liability, if at all arises, in both the above cases, is restricted to 50% by virtue of business transfer agreement between Lafarge and Raymond Ltd/TISCO.	Amount not determinable
v) The Company had claimed set-off of additional brought forward losses amounting to Rs.1501.671 millions for the assessment years 2001-02 to 2011-12, based on a favourable order of the CIT (Appeals) for the Assessments Years 2001-02, 2003-04, 2004-05, and 2005-06 in the matter of depreciation/amortisation of intangible assets acquired upon the acquisition of business from Raymond Limited, which were treated as Goodwill in the books of accounts. It has also claimed depreciation on fair value of assets acquired from Raymond Limited and Tata Iron and Steel Company Limited (TISCO), whereas as per the income tax department depreciation should have been claimed on the book value of the assets as appearing in the books of the seller. In respect of TISCO, Company has received a favourable order from Income Tax Appellate Tribunal (ITAT). However in respect of Raymond Ltd the department has gone into appeal against the order of the CIT (Appeals).	Amount not determinable

In respect of items (iv) and (v) mentioned above, the financial effect couldn’t be ascertained till the matters are finally decided.

BANKERS CHARGES REPORT AS PER REGISTRY

This form is for	Creation of charge
Corporate identity number of the company	U26940MH1999PTC118229
Name of the company	LAFARGE INDIA PRIVATE LIMITED.
Type of charge	Immovable Property Floating Charge
Particular of charge holder	IL and FS trust company Limited , IL and FS Financial Centre Plot No. 022 G Block Bandra Kurla Complex, Bandra (East), Mumbai- 400 051, Maharashtra, India
Date of instrument Creating the charge	04.01.2008
Amount secured by the charge	Rs.5518.926 millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest Six Months JPY LIBOR per annum Terms of Repayment The Borrower shall repay all the Loans outstanding as at the end of the Availability period by eight unequal semi-annual installments on repayment dates as per Facility Agreement dated 07.03.2007. Margin 0.5% per annum Extent and Operation of the charge Interest, additional interest, compound interest, commitment charges, costs, charges, expenses and other monies payable by the company to the participating institutions /banks respectively under their respective loan agreement/ Letters of Sanction/ Memorandum of terms and conditions as amended from time to time.
Short particulars of the property charged	Both Moveable and Immovable properties situated at (a) the second line clinkerisation unit located at Sonadih Cement Plant, PO Raseda, Via Baloda Bazar, Raipur 493 332, India; and (b) the cement grinding unit at Mejia, PS- Gangajalghati, PO Durlavpur, Dist - Bankura, WB, India excluding Bankers' Goods of the Borrower secured in favour of the Working Capital Facilities lenders as per Facility Agreement dated 07.03.07.

FIXED ASSETS

· Goodwill

· Land

· Quarry Development

· Building and Roads

· Plant and Machinery

· Railway sidings and Locomotives

· Furniture Fixtures and office Equipments

· 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.56.53
UK Pound	1	Rs.88.09
Euro	1	Rs.70.83

INFORMATION DETAILS

Information Gathered by :	SBA
Report Prepared by :	NIT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--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		64

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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