MIRA INFORM REPORT

Report Date :

03.03.2012

IDENTIFICATION DETAILS

Name :	NEOSPARK DRUGS AND CHEMICALS PRIVATE LIMITED
Registered Office :	241, B.L. Bagh, Panjugutta, Hyderabad – 500 082, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	29.06.1989
Com. Reg. No.:	01-010189
Capital Investment / Paid-up Capital :	Rs.11.000 millions
CIN No.: [Company Identification No.]	U24230AP1989PTC010189
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer of a wide range of Animal Health and Aquaculture Products.
No. of Employees :	Information declined by the management

RATING & COMMENTS

MIRA’s Rating :

Ba (49)

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

Maximum Credit Limit :	USD 440204
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

INFORMATION DECLINED BY

Name :	Mr. K.S.S. Rao
Designation :	Accounts Department

LOCATIONS

Registered Office :	241, B.L. Bagh, Panjugutta, Hyderabad – 500 082, Andhra Pradesh, India
Tel. No.:	91-40-23416725, 23408234
Fax No.:	91-40-23411806
E-Mail :	mail@neospark.com
Website :	http://www.neospark.com

DIRECTORS

AS ON 15.09.2011

Name :	Mr. Siva Prasad Vemulapalli
Designation :	Chairman cum Managing Director
Address :	444 (36-B), S.R. Nagar, Hyderabad – 500 038, Andhra Pradesh, India
Date of Birth/Age :	05.03.1940
Date of Appointment :	04.06.1990
DIN No.:	00393700
Name :	Mrs. Sobha Vemulapalli
Designation :	Director
Address :	444 (36-B), S.R. Nagar, Hyderabad – 500 038, Andhra Pradesh, India
Date of Birth/Age :	15.06.1945
Date of Appointment :	04.06.1990
DIN No.:	00393656
Name :	Dr. Muppalla Kumara Swamy
Designation :	Director
Address :	MKS Nivas, No.23, Nagathamman Kovil Extension, 12^th Avenue, Ashoknagar, Chennai – 600 083, Tamilnadu, India
Date of Birth/Age :	20.09.1954
Date of Appointment :	17.08.1994
DIN No.:	00393613
Name :	Mr. Ankamma Rao Uyyuru
Designation :	Director
Address :	54-14/1-24A/1, IInd lane, Srinivasa Nagar Bank Colony-3, Vijayawada, Krishna District – 520 008, Andhra Pradesh, India
Date of Birth/Age :	01.06.1955
Date of Appointment :	17.08.1994
DIN No.:	00393842
Name :	Mr. Chandra Sekhar Gannamaneni
Designation :	Director
Address :	Plot No.D-10A, Road No.3, Kakatiya Nagar, Habsiguda, Hyderabad – 500 007, Andhra Pradesh, India
Date of Birth/Age :	01.08.1961
Date of Appointment :	17.08.1994
DIN No.:	02385680

KEY EXECUTIVES

Name :	Mr. K.S.S. Rao
Designation :	Accounts Department

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 15.09.2011

Names of Shareholders	No. of Shares
Vemulapalli Siva Prasad	8277
Vemulapalli Sobha	6150
M. Kumaraswamy	860
M. Sampoorna	2571
U. Ankamma Rao HUF	9221
U.L. Sirisha Kumari	4100
G. Chandrasekhar	13286
G. Indrani	3000
A.L. Sobha Rani	300
D. Ratna Jyothi	400
V.V. Ramana	1200
Vishnuvardhan Raju	300
M. Sankara Raju	200
K. Ramasiddi Raju	200
N. Sambasiva Rao	600
G. Surendranatha Benarji	3400
K. Usha Rani	300
V. Suvarna Kumari	5
T. Anasuya Devi	5
K. Durga Malleswari	5
B. Venkateswariu	5
M. Lakshmi Rajeswari	5
A. Lalitha	5
A.V. Murthy	5
M. Pranesh Kumar	17000
V.M.K. Prasad	300
K.S. Sankar Rao	200
N. Krishna Moorthy	300
V. Shankar	7500
V. Madhavi Latha	7500
V. Hari Krishna	7500
V. Madhuri	7500
U. Ashok	3950
U. Vijay Chand	3850
Total	110000

AS ON 15.09.2011

Equity Share Breakup	Percentage of Holding
Category
Directors or relatives of directors	96.24
Other top fifty shareholders	3.76
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of a wide range of Animal Health and Aquaculture Products.
Products :	Animal Health Products Feed Supplements – Premixes Aquaculture Products Veterinary Pharmaceutical Formulations Speciality Chemicals

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Installed Capacity Per 8 Hours Shift	Actual Production In Tons/ K.Lit/ Nos. in Lakhs
1. Animal Health Products Formulations:
a) Powders	180 TPA	46.26
b) Liquids	324000 Lit	122.57
c) Tablets/ Boluses	40 LPA	27.48
d) Injectables	NIL	17.38
2. Biosecurity Products:
a) Powders	1000 TPA	21.84
b) Liquids	3000000 Lit	51.29
3. Feeds, Feed Supplements for Livestock Poultry and Agriculture:
a) Powders	2625 TPA	5982.68
b) Liquids	324000 Lit	493.37
c) Bolus		21.16

GENERAL INFORMATION

No. of Employees :

Information declined by the management

Bankers :

• State Bank of India, Commercial Branch, Ashoka My Home Chambers, S P Road, Secunderabad – 500 003, Andhra Pradesh, India
• ICICI Bank Limited

Facilities :

Secured Loans	31.03.2011 Rs. In Millions	31.03.2010 Rs. In Millions
From Andhra Pradesh State Financial Corporation, Hyderabad:
Secured by equitable mortgage of land and building along with hypothecation of all fixed assets of the company, present and future acquisitions and personal guarantees of Directors of the company.
A) Term Loan	37.897	11.599
B) Working Capital Term Loan	9.511	14.752
2. From State Bank of India, Secunderabad
(Against personal guarantees of Directors and Others and second charge over fixed assets of the company financed by Andhra Pradesh State Financial Corporation)
a) Cash Credit (Against Hypothecation of stocks and book debts)	59.208	54.882
b) Export Packing Credit	0.000	5.009
c) Over Draft against Fixed Deposits	0.000	0.000
d) Term Loans	8.029	2.759
3. a. ICICI Limited (Against Hypothecation of Vehicles and personal guarantees of Directors)	0.000	0.000
Total	114.645	89.001

Unsecured Loans	31.03.2011 Rs. In Millions	31.03.2010 Rs. In Millions
From Directors	1.353	1.353
From Others	2.119	2.120
Total	3.472	3.473

Banking Relations :	--
Financial Institutions :	Andhra Pradesh State Financial Corporation, 5-8-342, Chirag Ali Lane, Hyderabad – 500 001, Andhra Pradesh, India
Auditors :
Name :	R.N. Krishna and Associates Chartered Accountants
Address :	Flat No.B-26, Type IV-A, Bharani Apartments, Minister Road, Secunderabad – 500 003, Andhra Pradesh, India

CAPITAL STRUCTURE

AS ON 15.09.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
150000	Equity Shares	Rs.100/- each	Rs.15.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
110000	Equity Shares	Rs.100/- each	Rs.11.000 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		11.000	11.000	11.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		99.051	85.794	77.687
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		110.051	96.794	88.687
LOAN FUNDS
1] Secured Loans		114.645	89.001	77.096
2] Unsecured Loans		3.472	3.473	3.473
TOTAL BORROWING		118.117	92.474	80.569
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		228.168	189.268	169.256
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		88.760	67.730	53.321
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	109.528	80.504	71.618
	Sundry Debtors	115.280	88.689	77.250
	Cash & Bank Balances	17.650	13.469	12.434
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	26.165	18.782	20.329
Total Current Assets		268.623	201.444	181.631
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	117.113	70.312	55.941
	Other Current Liabilities	0.546	0.417	0.521
	Provisions	11.610	9.263	9.320
Total Current Liabilities		129.269	79.992	65.782
Net Current Assets		139.354	121.452	115.849
MISCELLANEOUS EXPENSES		0.054	0.086	0.086
TOTAL		228.168	189.268	169.256

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	520.090	382.961	336.929
		Other Income
		TOTAL (A)	520.090	382.961	336.929
Less	EXPENSES
		Office Expenses
		Administrative Expenses	473.453	347.941	304.669
		Advertising Expenses
		TOTAL (B)	473.453	347.941	304.669
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		46.637	35.020	32.260
Less	INTEREST (D)		13.985	11.998	10.868
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		32.652	23.022	21.392
Less/ Add	DEPRECIATION/ AMORTISATION (F)		7.529	5.379	4.967
	PROFIT BEFORE TAX (E-F) (G)		25.123	17.643	16.425
Less	TAX (H)		8.415	6.060	6.117
	PROFIT AFTER TAX (G-H) (I)		16.708	11.583	10.308
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		85.257	77.150	70.236
Less	APPROPRIATIONS
		Proposed Dividend	2.750	2.750	2.750
		Corporate Tax on Dividend	0.446	0.457	0.467
	BALANCE CARRIED TO THE B/S		98.514	85.257	77.150
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	NA	27.243	NA
	TOTAL EARNINGS		NA	27.243	NA
	Earnings Per Share (Rs.)		151.89	102.85	93.71

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	3.21	3.02	3.06
Return on Total Assets (PBT/Total Assets}	(%)	7.03	6.55	6.99
Return on Investment (ROI) (PBT/Networth)		0.22	0.18	0.19
Debt Equity Ratio (Total Liability/Networth)		2.24	1.78	1.65
Current Ratio (Current Asset/Current Liability)		2.07	2.52	2.76

LOCAL AGENCY FURTHER INFORMATION

OPERATIONS:

The Company has achieved a net sales turnover of Rs.519.144 millions during the year and made a net profit of Rs.25.123 millions after deducting depreciation of Rs.7.529 millions.

The Directors are happy to inform, that the company has achieved a positive growth of 36.45% in safes during the current year. This growth is achieved despite several unforeseen situations during the year in all the three business segments of Poultry, Livestock and Aquaculture.

India and Animal Health Business:

India continues to have remarkable statistics in the world for production of animal products, namely, first In milk production, second in fish, shrimp/prawn production, fourth in egg production and fifth in broiler meat production indicating with growing potential for animal health business.

Growth rates m different industry segments:

In the last decade, India's per capita GDP doubled and it will double again in less than a decade. This economic revolution is driving change and providing extraordinary opportunities for the people of India and those who can enhance their economic growth. Certain surveys ranked India as the third best country that will tide over the global economic crisis. The compounded average growth rate of the animal product sectors look impressive - Dairy Industry growing at 3-4% while the global statistics show 1-6%, broiler meat production growing at 10-12%, egg production growing at 6.5%, meat industry growing at 6.3%, freshwater fish production growing at 7-8%. This kind of growth will demand more animal health Inputs which will enable enhance the company performance in all states of business.

Industry Pointers:

While some perceive India as a vegetarian country, that is not the case. Roughly 40 per cent of the people are vegetarian, and while others do consume animal proteins, and the consumption is not limited but growing. It is growing in the most among younger people who have more income than their parents and families and are aware of protein deficiencies among children. The decision is generally economic since the incomes are rising. Consumption levels of all animal products by the Indian population are far below the average of world's per capita consumption rates. However consumption is expected to increase positively. Milk for instance is currently at 240 gm / day / head and is likely to increase to 296 gm by 2015; eggs at 42 / head per year will increase to 60, fish at 9 kg / year likely to increase to 11 kg and broiler meat at 2.5 kg likely to increase to 3.6 kg. Indians' appetite for poultry meat is increasing fast, in tandem with their growing income on the back of robust economic expansion. Consumption of chicken was less than 2 kg per person five years back. Tamil Nadu is the country's leader in terms of broiler meat consumption. Against the national per capita consumption, the average person in the southern state of Tamilnadu consumes 4,1 kg of chicken per year. Per capita consumption: The National Institute of Nutrition has recommended 180 eggs and 11 kg of meat per capita consumption for their country which shows a large variance between the actual requirement versus the current actual. This increase in consumption rates are expected to drive the demand for Animal Health inputs thus increase the scope for Neospark products and services.

Broiler Meat Production:

India now has the world's fifth-largest broiler sector and it is growing at about 10% each year. The growing economy is allowing more and more Indians to add chicken meat to their diets. Favorable growth In Broiler Industry will enhance the overall performance of Neospark with its products.

Layer Industry:

The layer industry continues to be yet another potential business opportunity in India, Eggs are very much sought after because it is one among the low-cost protein / nutrition source to the Indian population. Incidentally the production cost for an egg in India is the lowest (about $0.05, in February 2010) in the world. Expected growth in layer industry will aid in improved performance of Neospark products in the years to come.

Poultry Products Business of Neospark:

Poultry Products business contributes substantially to the company's business which is at 60.21% with a growth of 21.36% over 2009-2010. The company is actively involved in promoting its wide range of Poultry products viz.. Veterinary Pharmaceutical Formulations, Feed Supplement Formulations, Premfxes, Biotechnology Formulations and Biosecurity Formulations to different customer segments of Poultry industry like Layers, Broilers, Breeders and Poultry Feeds.

The company has to compete with other companies mainly on price resulting in a price war among the companies, leading to drastic reduction of product prices to meet the pricing of competitors. Wherever they had approvals for different products they were force to work with very low margins.

The company has taken up planned promotion of different poultry products through the field force with excellent technical rationale generated by members of technical team to all customers in different segments of the poultry industry with great success.

The Poultry products growth would have been much stronger but for several uncertainties in the poultry market like higher feed prices and the severe competition in this area of business.

By strengthening of Technical Team, the company could utilize the team members and provide the required services to different poultry customers more effectively for improved sales performance of both Poultry and Biosecurity Products.

All major poultry product groups of the company have shown positive growths viz with Liquid Feed Supplement Formulations growing at 24.25%, Vitamin, Mineral Feed Supplement Formulations Powders showing a growth of 18.73%, Biosecurity Formulations growing at 87,58%, Veterinary Pharmaceutical Formulations growing at 28.62% with Chemical and Antibiotic Feed Supplement Formulations growing at 14,32%. The company undertakes proper planning quarter by quarter to keep focus on promoting key products. The company is closely monitoring the accounts receivable situation in all major poultry pockets.

Future outlook:

The company has achieved reasonable results during the current year with the implementation of different actions planned to control accounts receivable, to make the products available on time and to improve sales even under adverse conditions through effective promotion in Animal Health and Aquaculture Industries.

The company has undertaken major expansion work of Unit-II where Feed Supplement Formulations are manufactured for effective and timely delivery of products to different customer segments by adding more production areas, several new machines and enhancing the overall capability of production. Feed Supplement Formulations have major contribution to company sales and this expansion will help to meet the demand for the products. As planned earlier, the company has successfully implemented to measure the performance against targets during the current year and achieved reasonable success in bringing the focus of attention to this area for performance evaluation.

But for unforeseen situations like increase in input costs of Raw Materials, packing materials which are beyond the company control and with expected good market conditions, focused promotion of products having large potential, identification to rope in key customers who can provide large volume of sales along with strict implementation of accounts receivable collection and export of products to different countries, the company expects to do well in the years to come.

The Directors recommend a Dividend @ 25% for the year ending 31.03.2011 on the Equity Shares of the company.

FIXED ASSETS:

· Land

· Factory Buildings

· Factory Buildings under construction

· Office Building

· Agriculture Land Building

· Building on Leased Premises

· Plant and Machinery

· Furniture and Fixture

· Electrical Equipments

· Office Equipments

· Bore Well and Motor

· Vehicles

FORM 8:

Corporate identity number of the company	U24230AP1989PTC010189
Name of the company	NEOSPARK DRUGS AND CHEMICALS PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	241, B.L. Bagh, Panjugutta, Hyderabad – 500 082, Andhra Pradesh, India
This form is for	Modification of charge
Type of charge	Immovable property Book debts Movable property (not being pledg Others
Particular of charge holder	State Bank of India, Commercial Branch, Ashoka My Home Chambers, S P Road, Secunderabad – 500 003, Andhra Pradesh, India Email: sa.00916@sbi.co.in
Nature of instrument creating charge	Letter of arrangement Supplemental Agreement of Loan cum Hypothecation Memorandum for recording extension of Mortgage by deposit of title deeds Guarantee Agreement
Date of instrument Creating the charge	23.05.2011
Amount secured by the charge	Rs. 88.500 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest Cash Credit - 6.75% above base rate with monthly rests Terms of repayment Repayable on Demand Margin Margin on: Raw Materials, Stock in Process, Finished Goods, Stores and Spares - 25% Book Debts / Receivables - 40% Export Packing Credit - 20% Letter of Credit - 25% Bank Guarantee - 25% Extent and operation of the charge 1) Hypothecation of All chargeable current asset of the Company 2) EM of Land and Building situated 11/3RT, MCH No.6-3-712/100, Punjagutta Colony, Punjagutta, Hyderabad belonging to the Company. 3) Land and Building in Shed No.D-65 and adjacent land in Sy. No. 257 and 284/2, situated at IDA, Jeedimetla, Qutubullapur Mandal, Hyderabad admg. 2264.37 Sq. Yards belonging to Neospark Pharma Private Limited 4) Second Charge on Factory Land and Buildings and Plant and Machinery belonging to the Company
Short particulars of the property charged (Including location of the property)	Hypothecation of All chargeable current asset of the Company EM of Land and Building situated 11/3RT, MCH No.6-3-712/100, Punjagutta Colony, Punjagutta, Hyderabad belonging to the Company. Land and Building in Shed No.D-65 and adjacent land in Sy. No. 257 and 284/2, situated at IDA, Jeedimetla, Qutubullapur Mandal, Hyderabad admg. 2264.37 Sq. Yards belonging to Neospark Pharma Private Limited Second Charge on Factory Land and Buildings and Plant and Machinery belonging to the Company.
Whether any of the property or interest therein under reference is not registered in the name of the company. If yes, in whose name it is registers	Yes, Neospark Pharma Private Limited
Date of instrument modifying the charge	17.09.2008
Particulars of the present modification	Increase in the overall credit limits to Rs.88.500 millions increase in the Cash Credit limit from Rs.60.000 millions to Rs.80.000 millions, Letter of Credit Limit from Rs.5.000 millions to Rs.7.500 millions and Bank Guarantees Rs.1.000 million.

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.49.15
UK Pound	1	Rs.78.25
Euro	1	Rs.65.57

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	5
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		49

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

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