MIRA INFORM REPORT

Report Date :

16.08.2014

IDENTIFICATION DETAILS

Name :	SPEL SEMICONDUCTOR LIMITED
Registered Office :	5, CMDA Industrial Estate, Maraimalai Nagar, Chennai – 603209, Tamilnadu
Country :	India
Financials (as on) :	31.03.2014
Date of Incorporation :	26.12.1984
Com. Reg. No.:	18-011434
Capital Investment / Paid-up Capital :	Rs.461.325 Millions
CIN No.: [Company Identification No.]	L32201TN1984PLC011434
TAN No.: [Tax Deduction & Collection Account No.]	CHES02438C
PAN No.: [Permanent Account No.]	AAACS8519B
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer and Exporter of Integrated Circuits.
No. of Employees :	Not Available

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 3506000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having a moderate track. Profitability of the company seems to be low during 2014. However, trade relations are fair. Business is active. Payment terms are reported to be slow but correct. The company can be considered for business dealing with some cautions.

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

N E W S

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 their 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 tat 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.

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	BB+ (Long Term Rating)
Rating Explanation	Have moderate risk of default.
Date	December 17, 2013

Rating Agency Name	CRISIL
Rating	A4+ (Short Term Rating)
Rating Explanation	Have minimal degree of safety and carry high credit risk.
Date	December 17, 2013

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

Name :	Mr. Jayaraman
Designation :	Senior Executive Finance
Contact No.:	91-44-47405488
Date :	07.08.2014

LOCATIONS

Registered Office :	5, CMDA Industrial Estate, Maraimalai Nagar, Chennai – 603209, Tamilnadu, India
Tel. No.:	91-44-47405490 / 47405473
Fax No.:	91-44-47405303 / 47405404
E-Mail :	info@spel.com jayaraman@gmail.com
Website :	http://www.spel.com
Overseas Office :	4030 Moorpark Ave # 236 San Jose, CA 95117, USA

DIRECTORS

As on: 31.03.2013

Name :	Dr. A. C. Muthiah
Designation :	Chairman
Name :	Mr. Ar Rm Arun
Designation :	Director
Name :	Dr. A. Besant C. Raj
Designation :	Director
Name :	Dr. T. S. Vijayaraghavan
Designation :	Director
Name :	Mr. N. Ramakrishnan
Designation :	Director
Name :	Mr. N. Sivashanmugam
Designation :	Whole Time Director

KEY EXECUTIVES

Name :	Mr. Jayaraman
Designation :	Senior Executive Finance
Name :	Mr. D. Balakrishnan
Designation :	Chief Executive Officer
Name :	Mr. S. S. Arunachalam
Designation :	Head Corporate Affairs and Company Secretary
Name :	Ms. Rohini Ramanathan
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 30.06.2014

(A) Shareholding of Promoter and Promoter Group	No. of Shares	Percentage of Holding
(1) Indian
Individuals / Hindu Undivided Family	979350	2.12
Sub Total	979350	2.12
(2) Foreign
Bodies Corporate	25811207	55.97
Sub Total	25811207	55.97
Total shareholding of Promoter and Promoter Group (A)	26790557	58.09
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	8600	0.02
Financial Institutions / Banks	100	0.00
Foreign Institutional Investors	9000	0.02
Sub Total	17700	0.04
(2) Non-Institutions
Bodies Corporate	1341496	2.91
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	10930826	23.70
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	6190663	13.42
Any Others (Specify)	846201	1.83
Clearing Members	13303	0.03
Hindu Undivided Families	545470	1.18
Non Resident Indians	283878	0.62
Trusts	3550	0.01
Sub Total	19309186	41.87
Total Public shareholding (B)	19326886	41.91
Total (A)+(B)	46117443	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	46117443	0.00

BUSINESS DETAILS

Line of Business :	Manufacturer and Exporter of Integrated Circuits.
Exports :
Products :	Integrated Circuits
Countries :	· USA · Europe
Imports :
Products :	Raw Materials
Countries :	· Singapore · Malaysia · Taiwan · Japan · China
Terms :
Selling :	Cash and Advance Payment
Purchasing :	Cash and Advance Payment

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

• Allahabad Bank
• Indian Overseas Bank

Facilities :

· Fund Rs.30.000 Millions (From Indian Overseas Bank)

· Non Fund Rs.90.000 Millions (From Indian Overseas Bank)

· Fund Rs.20.000 Millions (From Allahabad Bank)

· Non Fund Rs.15.000 Millions (From Allahabad Bank)

(Rs. In Millions)

Secured Loan	As on 31.03.2014	As on 31.03.2013
LONG TERM BORROWINGS
Term loan - Indian rupee loan from banks	56.265	112.545
SHORT TERM BORROWINGS
Packing Credit from banks	47.520	35.605
Overdraft facility with Bank	10.106	9.730
Buyers' Credit from Bank	22.202	31.883
Total	136.093	189.763

Notes:

Term loan from banks are secured by first mortgage of fixed assets acquired out of Bank Finance, Equitable Mortgage releating to factory land and building at 5, CMDA Industrial Estate, Maraimalai Nagar. First Charge on the existing Plant and Machinery and other Fixed Assets for Term Loan and is also secured by personal gaurantee of Dr. A.C. Muthiah.

The term loan is repayable in 16 equal quarterly instalments commmencing from 25.04.2012. The applicable interest rate is 13.25% p.a payable monthly. The principal amount of Rs.8.518 Millions due on January 25, 2014 was paid on April 25, 2014. However there is no interest overdue.

The Secured borrowings representing Working Capital Loans from Banks are secured by hypothecation by way of first charge on the current assets of the Company viz. Stock of Raw materials, Stocks in Process, Semi-finished and Finished Goods, Stores and Spares not relating to Plant and Machinery (Consumables, Stores and Spares) Bills receivables, Book debts, deposits and all other movables excluding such movables as may be permitted by Banks in their discretion from time to time, both present and future, wherever situated and further secured by the second charges on the immovable assets of the Company both present and future. The charge on current assets of the Company will rank pari passu with the existing charges created and/or agreed to be created thereon in favour of Banks.

Banking Relations :	--
Auditors :
Name :	Natarajan and Company Chartered Accountants
Address :	2/342 II Street , Kandaswamy Nagar, Palavakkam, Chennai – 600041, Tamilnadu, India
Holding Company :	· Natronix Semiconductor Technology Private Limited · Southern Petrochemical Industries Corporation Limited
Subsidiary Company :	SPEL America Inc
Enterprise owned by /over which Key Management Personnel / Relatives is able to exercise significant influence :	· Valingro Exponenta Limited · Natronix Semiconductor Technology Limited · ACM Medical Foundation · Valingro Exponenta Limited · Chiptest Engineering Limited

CAPITAL STRUCTURE

As on: 31.03.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
60000000	Equity Shares	Rs.10/- each	Rs.600.000 Millions

Issued Capital :

No. of Shares	Type	Value	Amount
46147613	Equity Shares	Rs.10/- each	Rs.461.476 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
46147613	Equity Shares	Rs.10/- each	Rs.461.476 Millions
30170	Less: Forfeited shares	Rs.5/- each	Rs.0.151 Million
	Total		Rs.461.325 Millions

1 Reconciliation of the Equity shares outstanding at the beginning and at the end of the reporting period

Particular	March 31, 2014
	Number	Rs. In Millions
At the beginning of the period	46117443	461.325
Issued during the period	-	-
Outstanding at the end of the period	46117443	461.325

2 Rights attached to equity shares

The Equity share holders are entitled to receive dividends as and when declared; a right to vote in proportion to holding etc. and their rights, preferences and restrictins are governed by / in terms of their issue under the provisions of the Companies Act, 1956.

3 Shares held by holding/ ultimate holding company and/ or their subsidiaries/ associates and details of shareholders holding more than 5% shares in the company:

Out of equity shares issued by the company, shares held by its holding company, ultimate holding company and their subsidiaries/associates are as below:

Particular	March 31, 2014
	Number	% holding
Natronix Semiconductor Technology Private Limited	25,811,207	55.97%
Southern Petrochemical Industries Corporation Limited	--	--

As per of the company, including its register of shareholders / members and other declarations received from shareholders regarding beneficial interest, the above shareholding represents both legal and beneficial ownerships of shares. The change in shareholding as above took place on March 24, 2014.

4. Aggregate number of shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the report dated is NIL.

5. Shares reserved for issue under options

Company has not reserved any equity shares for issue under the employee stock option plan (ESOP) of the company.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2014	31.03.2013	31.03.2012
I.              EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	461.325	461.325	461.325
(b) Reserves & Surplus	415.238	412.019	460.230
(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)	876.563	873.344	921.555
(3) Non-Current Liabilities
(a) long-term borrowings	158.765	132.545	168.825
(b) Deferred tax liabilities (Net)	107.724	108.972	120.675
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	24.866	21.411	19.666
Total Non-current Liabilities (3)	291.355	262.928	309.166
(4) Current Liabilities
(a) Short term borrowings	79.828	142.218	137.293
(b) Trade payables	107.799	90.865	82.272
(c) Other current liabilities	94.168	106.244	129.300
(d) Short-term provisions	3.239	2.083	2.092
Total Current Liabilities (4)	285.034	341.410	350.957
TOTAL	1452.952	1477.682	1581.678
II.          ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	1083.792	1185.959	1266.475
(ii) Intangible Assets	1.764	2.670	3.591
(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	0.004	0.004	0.004
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	6.185	8.469	6.127
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	1091.745	1197.102	1276.197
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	208.273	151.663	166.727
(c) Trade receivables	94.604	53.972	66.295
(d) Cash and cash equivalents	10.994	25.474	25.399
(e) Short-term loans and advances	46.799	48.869	43.273
(f) Other current assets	0.537	0.602	3.787
Total Current Assets	361.207	280.580	305.481
TOTAL	1452.952	1477.682	1581.678

PROFIT & LOSS ACCOUNT

	PARTICULARS	31.03.2014	31.03.2013	31.03.2012
	SALES
	Income	633.890	807.692	797.863
	Other Income	11.486	12.166	8.637
	TOTAL (A)	645.376	819.858	806.500
Less	EXPENSES
	Cost of Materials Consumed	263.823	333.369	407.011
	Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	(63.657)	5.826	(5.002)
	Employees benefits expense	157.206	175.145	157.577
	Other expenses	129.384	185.817	112.846
	TOTAL (B)	486.756	700.157	672.432
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (C)	158.620	119.701	134.068
Less	FINANCIAL EXPENSES (D)	47.037	58.401	32.511
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)	111.583	61.300	101.557
Less/ Add	DEPRECIATION/ AMORTISATION (F)	109.613	118.506	93.782
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)	1.970	(57.206)	7.775
Less	TAX (H)	(1.248)	(11.703)	2.081
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)	3.218	(45.503)	5.694
	EARNINGS IN FOREIGN CURRENCY
	F.O.B. Value of Exports	577.204	805.295	796.691
	TOTAL EARNINGS	577.204	805.295	796.691
	IMPORTS
	Capital goods	0.000	34.360	151.180
	Machinery spares	7.434	13.748
	Raw Materials and components	251.573	354.326	364.017
	TOTAL IMPORTS	259.007	402.434	515.197
	Earnings / (Loss) Per Share (Rs.)	0.07	(0.99)	0.12

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
PAT / Total Income	(%)	0.50	(5.55)	0.71
Net Profit Margin (PBT/Sales)	(%)	0.31	(7.08)	0.97
Return on Total Assets (PBT/Total Assets}	(%)	0.14	(3.87)	0.49
Return on Investment (ROI) (PBT/Networth)		0.00	(0.07)	0.01
Debt Equity Ratio (Total Debt/Networth)		0.27	0.31	0.33
Current Ratio (Current Asset/Current Liability)		1.27	0.82	0.87

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	461.325	461.325	461.325
Reserves & Surplus	460.230	412.019	415.238
Net worth	921.555	873.344	876.563
long-term borrowings	168.825	132.545	158.765
Short term borrowings	137.293	142.218	79.828
Total borrowings	306.118	274.763	238.593
Debt/Equity ratio	0.332	0.315	0.272

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	797.863	807.692	633.890
		1.232	(21.518)

NET PROFIT MARGIN

Net Profit Margin	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	797.863	807.692	633.890
Profit	5.694	(45.503)	3.218
	0.71%	(5.63%)	0.51%

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	No
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 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 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	No
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	No

UNSECURED LOAN

(Rs. In Millions)

Particular	As on 31.03.2014	As on 31.03.2013
LONG TERM BORROWINGS
Deposits from Others	102.500	20.000
SHORT TERM BORROWINGS
Deposits from Bank	0.000	50.000
Deposits from Others	0.000	15.000
Total	102.500	85.000

Notes:

The interest payable on deposits from others are in the range of 10% to 10.25% p.a payable quarterly. The interest due on December 31, 2013 and March 31, 2014 amounting to Rs.4.099 Millions is outstanding at year end.

CONTINGENT LIABILITIES

(Rs. In Millions)

Particular	As on 31.03.2014	As on 31.03.2013
Service Tax Demand	0.000	0.186
Letter of Credit for import purchases	48.363	35.511
Income tax Demand	4.019	17.957

INDEX OF CHARGES

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10300937	03/11/2010	262,800,000.00	Allahabad Bank	MOUNT ROAD BRANCH, CHENNAI, CHENNAI, TAMIL NADU - 600002, INDIA	B04489175
2	90288715	29/11/2013 *	120,000,000.00	Indian Overseas Bank	C AND I BRANCH, CHENNAI, 98A, DR. RADHAKRISHNAN SALAI, MYLAPORE, CHENNAI, TAMILNADU - 600004, INDIA	B92142637

* Date of charge modification

FIXED ASSETS

Tangible Assets

· Land

· Leasehold Improvements

· Buildings

· Plant and Machinery

· Furniture and Fittings

· Office Equipments

· Vehicles

Intangible Assets

· Computer software

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.61.06
UK Pound	1	Rs.101.84
Euro	1	Rs.81.56

INFORMATION DETAILS

Information Gathered by :	SVA
Analysis Done by :	RAS
Report Prepared by :	VRN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	3
--RESERVES	1~10	2
--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	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	YES
--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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This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.