MIRA INFORM REPORT

Report Date :

09.08.2014

IDENTIFICATION DETAILS

Name :	FREDUN PHARMACEUTICALS LIMITED
Registered Office :	26, Manoj Industrial Premises, G D Ambekar, Wadala, Mumbai – 400031, Maharashtra
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	08.06.1987
Com. Reg. No.:	11-043662
Capital Investment / Paid-up Capital :	Rs.26.246 Millions
CIN No.: [Company Identification No.]	L24239MH1987PLC043662
PAN No.: [Permanent Account No.]	AAACF0581A
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturing of Various Pharmaceutical Formulations
No. of Employees :	Not Available [We tried to confirm the number of employees but no one is ready to part any information from the company management]

RATING & COMMENTS

MIRA’s Rating :

B (30)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 110000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is a well-established company having moderate track. The company possesses a moderate financial profile marked by modest networth comprising of very low position of reserves. Management has reported a very low profitability during FY13, as against a previous year loss. However, trade relations seems to be fair. Business is active. Payment terms are reported as slow but correct. In view of vast promoter’s experiences, the subject can be considered for business dealings with caution.

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 – June 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

NEWS

As per the latest IMF study, the total weigh of emerging markets in the GDP of the world on a purchasing power parity basis has seen a sizeable shift. It highlights how as against 51 % in 2005, the emerging economies now account for close to 56 % of the global purchasing power GDP as per the latest survey. And with the emerging economies growing at a faster rate than their developed counterparts, there are every possibility that the share goes up further in the coming years.  China may surpass the US over the next few years.

Politics and economics are very intricately connected. They tend to influence each other in ways that could be very complex and far-reaching. The prospects of the India’s economy have been seriously compromised due to political corruption. High inflation, poor standard of living are to a great extent a result of rampant corruption in the country. China on the other hand, seems to be facing diametrically opposite challenge. American hedge fund manager Jim Chanos has been keenly following the political and economic development in the dragon economy and has figured out something that is quite worrying. He is of the view that the Chinese economy could be heading toward trouble on account of new Chinese President Xi Jingping’s very aggressive anti-corruption drive. Chanos believes that many things such as apartment sales, luxury products, etc. were largely bought with dirty money. And it is now beginning to impact consumption. This may indeed be bad news for an economy that is struggling to transition from an investment-driven export-oriented economy to a domestic consumption-driven economy.

A study published by Firstpost has revealed that asset classes like real estate and equities were the biggest beneficiaries of the liberalization policies.  A firm called Ciane Analytics studied returns from assets including equities, gold, fixed deposits, G-Secs and real estate since 1991. Real estate outperformed every other asset classes during the 23-year period with an annualized return of 20 %! Equities came in second with annualized return of 15.5 %! However, while these returns may seem mouthwatering, the fact is that the return from equities adjusted for inflation came down to just 7.1 %.

Some brief news are as under

. R-Power to buy Jaypee’s hydro assets

. Investors await justice in NSEL case

. India seeks MFN status from Pakistan ahead of meeting

. Ukrain’s clashes with rebels hinder MH17 crash investigation

. India exploring merger of state-owned hydro PSUs

..Higher costs weigh down profit growth to slowest in 9 quarters

..Wal-Mart to expand wholesale business in India

. GMR group moves to strengthen balance sheet

. Central Bank to sell 4 % stake to Life Insurance Corporation

. Tata Chemicals plans to raise up to Rs 10000 mn.

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2014.

INFORMATION PARTED BY

MANAGEMENT NON CO-OPERATIVE

Contact No.: 91-22-40318111

LOCATIONS

Registered Office :	26, Manoj Industrial Premises, G D Ambekar, Wadala, Mumbai – 400031, Maharashtra, India
Tel. No.:	91-22-40318111, 24137193, 66624672, 66624671
Fax No.:	91-22-40318133, 24146084
E-Mail :	accounts@fredunpharma.com info@fredunpharma.com business@fredungroup.com fredun@bom5.vsnl.net.in
Website :	http://www.fredunpharma.com

DIRECTORS

(AS ON 21.12.2012)

Name :

Mr. Daulat Nariman Medhora

Designation :

Director

Address :

733, Katpitia Building, 4^th Floor, Parsi Colony, Dadar (East), Mumbai – 400014, Maharashtra, India

Date of Birth/Age :

16.03.1945

Date of Appointment :

08.06.1987

Pan No.:

AABPH1066J

DIN No.:

01745277

Name :

Mr. Fredun Nariman Medhora

Designation :

Director

Address :

733, Katpitia Building, 4^th Floor, Parsi Colony, Dadar (East), Mumbai – 400014, Maharashtra, India

Date of Birth/Age :

09.10.1986

Date of Appointment :

15.09.2009

DIN No.:

01745348

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	L24239MH1987PLC043662	FREDUN PHARMACEUTICALS LTD	Director	15/09/2006	15/09/2006	Active	NO
2	U24230MH2008PTC181631	FREDUN HEALTHCARE PRIVATE LIMITED	Director	25/04/2008	25/04/2008	Active	NO
3	AAB-3225	PRAGMATIC TATVA FOOD VENTURES LLP	Designated Partner	17/01/2013	17/01/2013	Active	NO
4	AAB-5748	FRESPAN LIFESCIENCES LLP	Designated Partner	10/06/2013	10/06/2013	Active	NO

Name :

Mr. Nariman Bamansha Medhora

Designation :

Managing Director

Address :

733, Katpitia Building, 4^th Floor, Parsi Colony, Dadar (East), Mumbai – 400014, Maharashtra, India

Date of Birth/Age :

05.11.1937

Date of Appointment :

08.06.1987

PAN No.:

AAHPM1954A

DIN No.:

02060357

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	L24239MH1987PLC043662	FREDUN PHARMACEUTICALS LTD	Managing director	08/06/1987	08/06/1987	Active	NO
2	U24230MH2008PTC181631	FREDUN HEALTHCARE PRIVATE LIMITED	Director	25/04/2008	25/04/2008	Active	NO

Name :

Mr. Aspi Navroze Raimalwala

Designation :

Director

Address :

C-1/2-7, III Floor, NEO Tractor Baug More Road, Mahim, Mumbai – 400016, Maharashtra, India

Date of Birth/Age :

Date of Appointment :

30.05.1997

DIN No.:

02454860

Name :

Mr. Chandrakant Kanchanlal Shah

Designation :

Director

Address :

101-102, Rokadia Land Mark, 49 Nehru Road Vile Parle (East), Mumbai – 400057, Maharashtra, India

Date of Birth/Age :

06.12.1935

Date of Appointment :

30.09.2009

DIN No.:

02843653

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 21.12.2012)

SHAREHOLDING DETAILS FILE ATTACHED.

(AS ON 29.09.2012)

Equity Shares Break – up

Category	Percentage
Mutual Funds	3.13
Bodies corporate	0.79
Directors or relatives of directors	78.84
Other top fifty (50) shareholders	8.61
Others	8.63
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Various Pharmaceutical Formulations

GENERAL INFORMATION

No. of Employees :

Not Available

[We tried to confirm the number of employees but no one is ready to part any information from the company management]

Bankers :

· The Shamrao Vithal Co-operative Bank Limited

Wadala Branch: Shop No.1-3, Block No.2, Vijay Niwas, Plot No.193, Station Road, Wadala (West), Mumbai – 400031, Maharashtra, India

Facilities :

Secured Loans	31.03.2013	31.03.2012
	(Rs. In Millions)
Long Term Borrowings
Rupee term loans from banks	9.879	13.190
Rupee term loans from others	2.277	1.269
Short Term Borrowings
Rupee term loans from banks	29.308	24.784
Rupee term loans from others	2.385	2.191
Total	43.849	41.434

Banking Relations :	--
Auditors :
Name :	V. D. Khandekar and Company Chartered Accountants
Address :	101, Bhagirathi Niwas, Bhawani Shankar Road, Dadar (West), Mumbai, Maharashtra, India
PAN No.:	AAQPK7511C

CAPITAL STRUCTURE

(AS ON 30.12.2013)

Authorised Capital:

No. of Shares	Type	Value	Amount
2700000	Equity Shares	Rs.10/- each	Rs.27.000 Millions
30000	Preference Shares	Rs.100/- each	Rs.3.000 Millions
	Total		Rs.30.000 Millions

Issued, Subscribed & Paid-up Capital:

No. of Shares	Type	Value	Amount
2352400	Equity Shares	Rs.10/- each	Rs.23.524 Millions
25000	Preference Shares	Rs.100/- each	Rs.2.500 Millions
	Total		Rs.26.024 Millions

FINANCIAL DATA

[All figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	26.246	26.246	26.246
(b) Reserves & Surplus	0.149	0.311	3.137
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1)+(2)	26.395	26.557	29.383
(3) Non-Current Liabilities
(a) long-term borrowings	12.156	14.459	16.412
(b) Deferred tax liabilities (Net)	4.373	4.252	4.252
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	1.799	1.427	1.304
Total Non-current Liabilities (3)	18.328	20.138	21.968
(4) Current Liabilities
(a) Short term borrowings	32.968	29.825	22.850
(b) Trade payables	32.146	37.311	14.109
(c) Other current liabilities	34.888	12.553	9.805
(d) Short-term provisions	2.723	1.868	1.635
Total Current Liabilities (4)	102.725	81.557	48.399
TOTAL	147.448	128.252	99.750
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	59.633	56.038	51.894
(ii) Intangible Assets	0.591	0.545	0.000
(iii) Capital work-in-progress	0.000	0.000	0.000
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.003	0.003	0.003
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	9.111	7.965	5.623
(e) Other Non-current assets	2.619	1.516	1.105
Total Non-Current Assets	71.957	66.067	58.625
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	32.486	27.652	12.323
(c) Trade receivables	19.550	16.683	12.156
(d) Cash and cash equivalents	5.721	3.393	3.620
(e) Short-term loans and advances	17.734	14.457	13.026
(f) Other current assets	0.000	0.000	0.000
Total Current Assets	75.491	62.185	41.125
TOTAL	147.448	128.252	99.750

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Revenue from Operations	150.818	116.754	79.689
		Other Income	3.439	7.223	2.607
		TOTAL (A)	154.257	123.977	82.296
Less	EXPENSES
		Cost of Materials Consumed	65.860	64.382	32.278
		Purchases of Stock-in-Trade	4.408	0.407	0.000
		Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	(3.076)	(10.718)	2.879
		Employees benefits expense	20.261	16.303	12.770
		Other expenses	49.492	43.409	24.196
		Prior Period Items	3.107	0.494	0.014
		TOTAL (B)	140.052	114.277	72.137
Less	PROFIT/(LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		14.205	9.700	10.159
Less	FINANCIAL EXPENSES (D)		8.841	8.548	6.392
	PROFIT/(LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		5.364	1.152	3.767
Less/ Add	DEPRECIATION/ AMORTISATION (F)		4.897	3.544	3.170
	PROFIT/(LOSS) BEFORE TAX (E-F) (G)		0.467	(2.392)	0.597
Less	TAX (H)		0.394	0.000	0.376
	PROFIT/(LOSS) AFTER TAX (G-H) (I)		0.073	(2.392)	0.221
	Earnings Per Share (Rs.)		0.03	--	--

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	0.05	(1.93)	0.27
Net Profit Margin (PBT/Sales)	(%)	0.31	(2.05)	0.75
Return on Total Assets (PBT/Total Assets}	(%)	0.32	(1.87)	0.60
Return on Investment (ROI) (PBT/Networth)		0.02	(0.09)	0.02
Debt Equity Ratio (Total Debt/Networth)		1.71	1.67	1.34
Current Ratio (Current Asset/Current Liability)		0.73	0.76	0.85

FINANCIAL ANALYSIS

[All figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns.)	(INR in Mlns.)	(INR in Mlns.)
Share Capital	26.246	26.246	26.246
Reserves & Surplus	3.137	0.311	0.149
Net worth	29.383	26.557	26.395
long-term borrowings	16.412	14.459	12.156
Short term borrowings	22.850	29.825	32.968
Total borrowings	39.262	44.284	45.124
Debt/Equity ratio	1.336	1.668	1.710

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Revenue from Operations	79.689	116.754	150.818
		46.512	29.176

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Revenue from Operations	79.689	116.754	150.818
Profit	0.221	(2.392)	0.073
	0.28%	(2.05%)	0.05%

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	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	No
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three 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	No
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	-----
22]	Litigations 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, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	No

UNSECURED LOANS

PARTICULARS	31.03.2013	31.03.2012
	(Rs. In Millions)
Short Term Borrowings
Loans and advances from directors	1.275	2.850
Total	1.275	2.850

OPERATIONS

The company has achieved a turnover with other income of Rs.154.257 Millions as compared to Rs.123.977 Millions in the previous year. Profits after tax (PAT) was Rs.0.073 Million compared to loss of Rs.2.392 Millions in the previous year.

Revenue from exports for FY 2013 increased by Rs.27.749 Millions to Rs.78.984 Millions of which African markets accounted for Rs.38.787 Millions with a growth of 28.90% compared to the exports in 2011-2012. ASEAN countries sales also performed well with several product registrations achieved in Sri Lanka, Vietnam and Myanmar. This business is expected to continue growing and doing well.

During F.Y. 2013 the company Globally launched 36 new products and filed 60 new products for registrations.

The veterinary and aqua products registration certificates are being obtained and several distributors have been appointed to market these products.

The company has successfully launched a herbal dietary supplement in Africa and envisages impressive growth of the same.

The company had gone for expansion in the Palghar manufacturing unit in the year 2012 to increase the production with several more registrations and good orders in the pipeline. Further investment was also made in the current year with an optimistic outlook.

BUSINESS OUTLOOK

The Regulatory norms for approving pharma manufacturing units are getting tougher. There is intense competition and pricing pressures due to Governments’ interventions and promotion of generics. The branded generics account for a fifth of the global market and is expected to nearly double by 2016 with the impending patent expiries in the next 4 years. The generic market would reach 30% of the Global Pharmaceutical Market. The company expects good growth in the branded generics on a sustainable basis.

The company is also investing in R & D machineries to build up the capabilities to produce latest generics and enter niche areas where there are good sales potential with relatively limited competition. To increase volumes of the product portfolio, the company has been systematically investing in its productive infrastructure. It has invested more than Rs.10.000 Millions in the last year to increase capacity in existing infrastructure and create new capacities in oral dosage departments.

INDEX OF CHARGES:

S. No.	Charge ID	Date of Charge Creation/ Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10509179	02/07/2014	12,000,000.00	THE SHAMRAO VITHAL CO-OPERATIVE BANK LIMITED	Wadala Branch:Shop No.1-3, Block No.2, Vijay Niwas, Plot No. 193, Station Road, Wadala (West), Mumbai, Maharashtra - 400031, India	C11420502
2	10461800	12/11/2013	7,500,000.00	THE SHAMRAO VITHAL CO-OP. BANK LTD	Wadala Branch:Shop No.1-3, Block No.2, Vijay Niwas, Plot No. 193, Station Road, Wadala (West), Mumbai, Maharashtra - 400031, India	B90174772
3	10450833	02/09/2013	937,500.00	RELIANCE CAPITAL LTD	"H" Block 1st Floor, Dhirubhai Ambani Knowledge City, Koparkhairne, Navi Mumbai, Maharashtra - 400710, India	B85659035
4	10437327	12/07/2013	3,152,075.00	RELIANCE CAPITAL LTD	"H" Block 1st Floor, Dhirubhai Ambani Knowledge City, Koparkhairne, Navi Mumbai, Maharashtra - 400710, India	B79813051
5	10332296	31/12/2011	1,186,586.00	RELIANCE CAPITAL LTD	"H" Block 1st Floor, Dhirubhai Ambani Knowledge City, Koparkhairne, Navi Mumbai, Maharashtra - 400710, India	B30723324
6	10207265	02/07/2014 *	103,400,000.00	The Shamrao Vithal Co-operative Bank Limited	Wadala Branch:Shop No.1-3, Block No.2, Vijay Niwas, Plot No. 193, Station Road, Wadala (West), Mumbai, Maharashtra - 400031, India	C11418175
7	10187657	02/07/2014 *	56,400,000.00	The Shamrao Vitthal Co-operative Bank Limited	Wadala Branch:Shop No.1-3, Block No.2, Vijay Niwas, Plot No. 193, Station Road, Wadala (West), Mumbai, Maharashtra - 400031, India	C11444981
8	80067252	27/09/2004 *	27,400,000.00	Bank of Baroda	Chandavarkar Road, Matunga, Mumbai, Maharashtra  - 400039, India	-
9	90223038	28/03/2002 *	6,000,000.00	BANK OF BARODA	309; Chandavarkar Road Branch, Matunga, Mumbai, Maharashtra - 400019, India	-

* Date of charge modification

FIXED ASSETS:

· Land

· Building

· Office Building

· Plant and Equipment

· Furniture and Fixtures

· Vehicles

· Office Equipment

· Computer

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 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.61.56
UK Pound	1	Rs.103.50
Euro	1	Rs.82.41

INFORMATION DETAILS

Information Gathered by :	NYA
Analysis Done by :	SUB
Report Prepared by :	NIT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		30

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

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

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

RATING EXPLANATIONS

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

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