I. STATEMENT ON RATING

The Slovak Rating Agency, a.s. assigns the company PALMA - TUMYS a.s. the following rating:

Long-term koruna rating	BBB + (stable outlook)
Long-term foreign currency rating	BBB - (stable outlook)
Short-term rating	S2

Reasoning:

• PALMA - TUMYS over the past year despite constantly increasing competition has maintained its position has the dominant domestic producer of vegetable oils and fats. The company achieves its competitiveness also thanks to its customer focus and well-structured quality-price relationship, even in a period of falling consumer purchasing power.
  
  
• In 2003 the company was a winner of the "SR National Quality Prize", which is similar to a competition declared by the European Foundation for quality management supported by the European Commission. Through winning the company was ranked among the top European businesses. In the framework of the evaluation the field process of management in accordance with the requirements of the ISO standard 9001:2000 in particular was perceived positively, along with compliance with the principles of proper production practices, and the system of hazard analysis of critical control points for food safety (HACCP) PALMA - TUMYS has thus become one of the first companies in the SR in the food sector permanently meeting hygiene standards.
  
  
• The company's business activity is significantly influenced by state agricultural policy, where the financing of agricultural primary producers' needs is not at a sufficient level. PALMA - TUMYS in the interest of securing input agricultural commodities of the required quality therefore finances primary producers in the process from a crop's planting through to its harvesting, whereby it partially takes over some of their risks on to itself. The agency positively evaluated the company's management of the process of solving the collapse of the basic raw material input - oilseed rape due to adverse weather conditions in 2003. The business's management managed to substitute the collapse of the oilseed rape crop by an alternative and ensure the utilisation of production capacities without a negative impact on the company's performance.
  
  
• The Slovak rating agency evaluates the company's performance as stable. For the year 2002 the business achieved earnings of SKK 3.77 billion and an after-tax profit of SKK 116.3 million , which is a 3% share of revenues. The company's assets reached the level of SKK 3.4 billion the share of total debt to sources of asset coverage reached 60%, corresponding to a volume of SKK 1.6 billion.
  
  
• The business has relatively little opportunity to increase its profit margin, which is connected with its trading economically strong subjects and with falling consumer purchasing power. A certain positive effect may be expected in connection with Slovakia's accession to the EU (new business opportunities, pro-export subsidies in the case of exports to third countries). In accordance with the approximation of SR law with EU standards there is also opening up for the company the possibility of diversifying production in the field of industrial production of biogas, which should in the future begin to partially replace hydrocarbon fuels, and where the business should have the possibility to achieve a higher profit margin.
  
  
• In 2002 the company retained its certificate of quality management pursuant to the ISO 9001:2000 standard. The quality management system is in-built throughout a cross-section of the company's organisational structure. Besides this, the company was awarded the prize of SLOVAK GOLD LEADER for the largest number of awards in this programme.

Please don't hesitate to address your questions to autner@slovakrating.sk, or call +421 2 5464 5151.

Slovak Rating Agency
Bratislava, 25 November 2003