Spreadsheet: rick_buy__32798__SWAT Report
Sheet: Sheet1

Counterparty Infrastructure Assessment
Due Diligence Summary |  |  |  |  |  |  | Review Performed By: [NAME], [NAME]
Counterparty: GAF/Farmlands Industries |  |  |  |  |  |  | Date of Site Visit: 08/23/01   Current Date:  08/27/01
Recommendation: |  |  |  |  |  |  |  |  | Overall Composite Rating
 | No improvements needed before proceeding |  |  |  |  |  |  |  |  | Poor/Low |  | Average |  | Excellent/High
 | Minor improvements needed before proceeding |  |  |  |  |  |  |  |  | 1 | 2 | 3 | 4 | 5
 | Significant improvements needed before proceeding |  |  |  | x |  |  |  |  |  |  | x
 | DO NOT PROCEED until major issues are resolved
Issues Noted  1. Background investigation revealed adverse findings on 2 of the investors of GAF. Consequently, current organizational structure precludes them from management of the refinery.  Individuals repsonsible for management of refinery had no adverse information reported. 2. Historic GAAP financial statements not available as Farmland did not produce stand-alone financial information for the refinery.  Additionally, accounting methods were not consistently applied from year to year.  3.  Accounting systems, controls and procedures are uncertain at GAF after the Farmland transition period. 4.  GAF ability to obtain "rainy day liquidity" is questionable.    5.  The need for key man life insurance for executive management should be assessed.
 |  |  |  |  |  |  |  |  |  | Poor/Low |  | Average |  | Excellent/High
Management and Staff |  |  |  |  |  |  |  |  | N/A | 1 | 2 | 3 | 4 | 5
 | Integrity based on background investigation |  |  |  |  |  |  |  |  |  |  | x
 | Management competence and experience:
 |  | CEO - Overall leadership and vision |  |  |  |  |  |  |  | x
 |  | Technical, engineering & operating |  |  |  |  |  |  |  |  |  | x
 |  | Financial/Accounting |  |  |  |  |  |  |  |  |  | x
 |  | Marketing |  |  |  |  |  |  | X
 |  | New business start-up experience |  |  |  |  |  |  | x
 | Management’s incentive to succeed |  |  |  |  |  |  |  |  |  |  | X
 | Employee staffing level/competence |  |  |  |  |  |  |  |  |  |  | x
 |  | Management/Staff composite rating
Planning and Budgeting
 | Business/strategic plan |  |  |  |  |  |  |  |  |  |  | x
 | Capital expenditures/cash flow budget |  |  |  |  |  |  |  |  |  |  | x
 | Technical – Engineering and operating plans (including start-up) |  |  |  |  |  |  |  |  |  |  | x
 | Product marketing plan |  |  |  |  |  |  |  | x
 |  | Planning/Budgeting composite rating |  |  |  |  |  |  |  |  |  |  |  |  | 3
Financial Reporting
 | Accuracy of information |  |  |  |  |  |  |  |  |  | x
 | Timeliness |  |  |  |  |  |  |  |  |  | x
 | Level of automation |  |  |  |  |  |  |  |  |  |  | x
 | External audit opinion |  |  |  |  |  |  |  |  |  |  | x
 | Quality of external auditor |  |  |  |  |  |  |  |  |  |  |  | x
 |  | Financial Reporting composite rating
Systems and Procedures
 | Quality and capacity of DP systems |  |  |  |  |  |  |  |  |  |  | x
 | Separation of duties/internal controls |  |  |  |  |  |  |  |  |  |  | x
 | Procedure documentation and records maintenance |  |  |  |  |  |  |  |  |  |  | x
 | Back-up and disaster recovery |  |  |  |  |  |  |  |  |  |  | x
 |  | Systems/Procedures Composite rating |  |  |  |  |  |  |  |  |  |  |  |  | 3
Working Capital and Liquidity
 | Adequacy of working capital prior to Enron transaction |  |  |  |  |  |  |  |  | x
 | Adequacy of working capital after Enron transaction |  |  |  |  |  |  |  |  | x
 | Ability to secure additional “rainy day” liquidity |  |  |  |  |  |  |  |  | x
 | Accounts receivable mgt  – credit review, collection procedures |  |  |  |  |  |  |  | x
 | Accounts payable mgt. and controls |  |  |  |  |  |  |  |  |  |  | x
 | Relationship with banks, vendors and customers |  |  |  |  |  |  |  | x
 |  | Working Capital/Liquidity composite rating
Risk Management and Contingent Liabilities
 | Use of derivative instruments to hedge revenue, expenses, interest rates or FX |  |  |  |  |  |  |  | x
 | Adequacy of liability and property insurance coverage |  |  |  |  |  |  |  |  |  |  | x
 | Adequacy of key man life insurance |  |  |  |  |  |  |  |  | X
 | Environmental exposure |  |  |  |  |  |  |  |  |  | x
 | Litigation/liability exposure |  |  |  |  |  |  |  |  |  | x
 |  | Risk Management/Contingent Liabilities composite rating