MIRA INFORM REPORT

Report Date :

22^nd June 2006

IDENTIFICATION DETAILS

Name :	VIDHI DYESTUFFS MANUFACTURING LIMITED
Registered Office :	E/27, Commerce Centre, 78, Tardeo Road, Mumbai - 400 034
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	30.09.2003
Com. Reg. No.:	11-76156
CIN No.: [Company Identification No.]	U24110MH2003PTC076156
TAN No.: [Tax Deduction & Collection Account No.]	MUMV04639F
Legal Form :	A public limited liability company. The company’s shares are listed on the Stock Exchange.
Line of Business :	The company is engaged in manufacturing of Synthetic Organic Colouring Matter and Colour Lakes

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Maximum Credit Limit :	USD 575000
Status :	Good
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are fair. General financial position is satisfactory. Payments are correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	E/27, Commerce Centre, 78, Tardeo Road, Mumbai - 400 034
Tel. No.:	91-22-23514349 / 23526347 / 23522864 / 56602188
Fax No.:	91-22-23521980
Factory 1 :	59-B, MIDC, Dhatav, Roha, Dist. Raigad, Maharashtra.
Tel. No.:	91-2194-263873
Marketing and Distribution Networks :	Algeria, Argentina, Australia, Brazil, Bulgaria, Chile, China, Colombia, Egypt, Ei Salvador, France, Germany, Greece, Holland, Indonesia, Iran, Israel, Italy, Japan, Kenya, Malaysia, Mauritius, Mexico, Norway, New Zealand, Pakistan, Peru, Philippines, Poland, Russia, South Africa, South Korea, Spain, Tanzania, Thailand, The Netherlands, Turkey, U K, Uruguay, USA, Venezuela and Vietnam

DIRECTORS

Name :	Shri Bipin M. Manek
Designation :	Chairman & Managing Director
Name :	Shri Naresh L. Modi
Designation :	Joint Managing Director
Name :	Smt. Pravina B. Manek
Designation :	Director
Name :	Smt. Alka N. Modi
Designation :	Director
Name :	Shri Vijay K. Atre
Designation :	Director
Name :	Shri Prafulchandra A. Shah
Designation :	Director
Name :	Shri Chetan P Bavishi
Designation :	Director
Name :	Shri Mitesh D Manek
Designation :	Director
Name :	Shri. Niren D. Desai
Designation :	Director

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoter's Holding 1 Promoters - Indian Promoters	29,90,200	59.87
Foreign Promoters	--	--
Persons acting in concert	--	--
Non-Promoters Holding Institutional Investors	--	--
Mutual Funds and UTI	--	--
Banks, Financial Institutions, Insurance Companies (Central/State Govt. Institutions/ Non-Government Institutions)	--	--
Flls	--	--
Private Corporate Bodies	86,104	1.73
Indian Public	15,20,447	30.44
NRI's/OCB's	3,76,662	7.54
Any other (please specify)Clering Member	21,087	0.42
Total	4994500	100.00

BUSINESS DETAILS

Line of Business :

The company is engaged in manufacturing of Synthetic Organic Colouring Matter and Colour Lakes

Products :

Item code No	Product Description
32.04.19	Synthetic Organic Colouring Matter
32.05.00	Colour Lakes

Export To :

Europe, Far East, Latin America, Australia and Africa

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Synthetic Organic Colouring Matter, Colour Lakes	M. T.	1140	1140	799.39

GENERAL INFORMATION

No. of Employees :

150

Bankers :

v Vijaya Bank

v Bank of India

Facilities :

SECURED LOANS	(Rs in millions)
From Financial Institutions
SICOM Ltd. - Term Loan	0.400
Vijaya Bank - Working Capital	43.747
Loan from SICOM Ltd. is secured by first mortgage of immovable properties, first charge by way of hypothecation of plant and machinery, spares and accessories relating to plant and machinery and other assets and personal guarantee of directors.
Loan from banks is secured by hypothecation of stocks & book-debts (present & future), second charge on fixed assets and personal guarantee of directors.

Banking Relations :	Satisfactory
Auditors :	Bhuta Shah And Company Chartered Accountants Corporate Advisors Mihir Shah & Associates Chartered Accountants

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
6,000,000	Equity shares	Rs. 10/- each	Rs. 60.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5,003,400	Equity shares	Rs. 10/- each	Rs. 50.034 millions
4,994,500	Equity shares	Rs. 10/- each	Rs. 49.945 millions
	Add : Share Forfeiture		Rs. 0.075 millions
	Total		Rs. 50.020 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004	31.03.2003
SHAREHOLDERS FUNDS
1] Share Capital		50.020	50.020	50.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		96.240	83.580	65.400
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		146.260	133.600	115.400
LOAN FUNDS
1] Secured Loans		44.147	26.859	36.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		44.147	26.859	36.000
DEFERRED TAX LIABILITIES		6.744	7.944	0.000
TOTAL		197.151	168.403	151.400
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		52.458	50.794	55.200
Capital work-in-progress		0.000	1.927	0.000
INVESTMENT		10.770	0.443	0.100
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	29.534	29.370	34.000
	Sundry Debtors	83.342	106.486	52.400
	Cash & Bank Balances	6.514	4.161	3.900
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	35.576	30.715	28.300
Total Current Assets		154.966	170.732	118.600
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	21.264	55.934	22.400
	Provisions	0.000	0.000	0.700
Total Current Liabilities		21.264	55.934	23.100
Net Current Assets		133.702	114.798	95.500
MISCELLANEOUS EXPENSES		0.221	0.441	0.600
TOTAL		197.151	168.403	151.400

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Sales Turnover [including other income]	272.181	309.649	250.600
Profit/(Loss) Before Tax	28.631	33.015	28.400
Provision for Taxation	7.500	6.438	5.900
Profit/(Loss) After Tax	21.131	26.577	22.500
Export Value	236.167	269.142	NA
Import Value	39.806	20.569	NA
Total Expenditure	235.898	269.523	211.700

QUARTERLY RESULTS

PARTICULARS	30.06.2005	30.09.2005	31.12.2005
Type	1st Qtr	2nd Qtr	3rd Qtr
Sales Turnover	59.000	57.600	61.200
Other Income	0.600	2.600	-0.800
Total Income	59.600	60.200	60.400
Total Expenditure	50.800	51.600	57.300
Operating Profit	8.800	8.600	3.100
Interest	0.800	0.900	0.900
Gross Profit	8.000	7.700	2.200
Depreciation	2.100	2.200	2.100
Tax	1.200	1.100	0.100
Reported PAT	4.800	4.400	0.100

200506 Quarter 1 –

Notes Other income includes Other Income Rs 0.041 million Profit on sale of investments Rs 0.535 million Expenditure includes (Increase)/Decrease in stock in Trade Rs (8.268) million Consumption of Raw Material including trading purchase Rs 42.572 million Staff Cost Rs 1.039 million Other expenditure Rs 15.478 million Tax Includes Provision for Current Tax Rs 1.100 million Deferred Tax Rs (0.098) million Fringe Benefit Tax Rs 0.056 million Status of Investor Complaints for the quarter ended June 30, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 01 Complaints disposed off during the quarter 01 Complaints unresolved at the end of the quarter Nil 1. The above Unaudited results as reviewed by the Audit Committee have been approved by the Board of Directors at its meeting held on August 01, 2005. 2. The Unaudited Financial Results for the three months ended June 30, 2005 has been subjected to the limited review by the Statutory Auditors in compliance with change in clause 41 with the Listing Agreement of the Stock Exchange. 3. The Company's main activity is manufacturing and trading of food colours, which is significant business segment, as per AS 17 issued by The Institute of Chartered Accountants of India. 4. Previous year's figures have been regrouped / rearranged / recast wherever necessary.

200509 Quarter 2 –

Other Income Includes Other Income Rs 0.068 million Profit on sale of investments Rs 2.507 million Expenditure Includes (Increase)/Decrease in stock in Trade Rs (1.117) million Consumption of Raw Material including trading purchase Rs 35.501 million Staff Cost Rs 1.087 million Other expenditure Rs 16.179 million Tax Includes Provision for Current Tax Rs 1.050 million Deferred Tax Rs (0.053) million Fringe Benefit Tax Rs 0.062 million Status of Investor Complaints for the quarter ended September 30, 2005 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 03 Complaints disposed off during the quarter 03 Complaints unresolved at the end of the quarter Nil 1. The above Unaudited results as reviewed by the Audit Committee have been approved by the Board of Directors at its meeting held on October 29, 2005. 2. The Unaudited Financial Results for the half year ended September 30, 2005 has been subjected to the Limited Review by the Statutory Auditors in compliance with change in clause 41 with the Listing Agreement of the Stock Exchange. 3. The Companys main activity is manufacturing and trading of food colours, which is significant business segment, as per AS 17 issued by The Institute of Chartered Accountants of India. 4. Previous years figures have been regrouped / rearranged / recast wherever necessary. 5. In the Extra ordinary General meeting of members of the Company held on October 22, 2005, the members have approved the sub-division of Equity Shares from existing Rs 10/- per share to Re 1/- per share.

200512 Quarter 3 –

Notes 1. The above unaudited results as revieed by the Audit commiittee have been approved by the Board of Directors at their meeting held on January 31,2006. 2. The unaudited financial results for the nine months ended December 31,2005 has been subjected to the limited review by the statuory auditors in compliance with change in clause 41 with the Listing Agreement of the Stock Exchange. 3. The company's main activity is manufacturing and trading of food colours, which is significant business segment,as per AS17 issued by The Institute of Chartered Accountant of India. 4. There were no investors complaints pending at the beginning of the current quarter as on October 01,2005.During the current quarter ended December 31,2005 the company has not recieved any complaints. 5. Previous year's figures heve been regrouped / rearranged recast wherever necessary. 6. In the Extradinary General meeting of members of the company held on October 22.2005,the members have approved the sub-division of equity shares from existing Rs.10/- per share.

KEY RATIOS

PARTICULARS		31.03.2005	31.03.2004	31.03.2003
PAT / Total Income	(%)	7.76	8.58	8.98
Net Profit Margin (PBT/Sales)	(%)	10.52	10.66	11.32
Return on Total Assets (PBT/Total Assets}	(%)	13.12	14.75	16.33
Return on Investment (ROI) (PBT/Networth)		0.20	0.25	0.25
Debt Equity Ratio (Total Liability/Networth)		0.45	0.62	0.51
Current Ratio (Current Asset/Current Liability)		7.29	3.05	5.13

STOCK PRICES

Face Value	Rs. 1.00/-
High	Rs. 2.77/-
Low	Rs. 2.70/-

LOCAL AGENCY FURTHER INFORMATION

FIXED ASSETS

v Leasehold Land

v Factory Building

v Administrative Building

v Furniture

v Office Premises

v Plant & Machinery

v Computers

v Telephones

v Vehicles

HISTORY

Incorporated in Jan.'94 as Vidhi International Pvt Ltd, the company was renamed as Vidhi Dyestuffs Manufacturing Pvt Ltd in Jul.'94. It was converted into a public limited company in Mar.'95. The company is mainly engaged in manufacturing food colours. The company was mainly promoted by Bipin M Manek,Naresh L Modi,Pravina B Manek and Alka N Modi. 

 The company installed Food colours with a capacity of 302 tpa at its proposed plant at Roha (Raigad district), Maharashtra. It entered the capital market in Feb.'96 with a public issue of 17,50,000 equity shares of Rs 10 each for cash at par aggregating Rs 17.5 MILLIONS, to part-finance the project. 

 The company has a marketing tie-up with Hongkong-based Tai Cheong Trading Co, for exporting 15 tpm of food colours.In 1997 the company commenced its commercial production of Synthetic Organic Dyestuffs at its plant at Roha. 

 The company was awarded with BS EN ISO - 9002 : 1994 certificate certified by Lloyd's Register Quality Assurance (LRQA), a leading international accrediated certification body, during 1999-2000.

OPERATIONS:

During the year under review the Company has achieved a turnover of 262.5 Millions compared to Rs.297.8 Millions. The apparent reduction in turnover is on account of trading exports which were at Rs. 38.8 Millions in the year under review as compared to Rs. 84.0 Millions in the earlier year. During the year under review the Company has earned a net profit of Rs. 28.7 Millions as compared to Rs. 33.0 Millions in the earlier year. The Company has manufactured 799 M. tons of Food colours against 752 M.tons in the earlier year. The company strives to optimally utilize its manufacturing capacity. To maintain the growth the company has decided to widen the product range and target markets where the company's presence needs to be improved. The directors do not foresee any problems in penetrating new markets

and promoting new and related products with the help of a very well established distributor network the world over. The company continues to maintain its ideal position in field of manufacturing of food colours and lakes by maintaining a very high standard using GMP along with respected accreditations like ISO 9001:2001 certification achieved earlier and very recently HACCP which has resulted into increased customer satisfaction and trust in Vidhi brand. In spite of the ever-rising competition the Company has been able to earn good profit

CORPORATE GOVERNANCE:

The Company continues to comply with the requirements of clause 49 of the Listing Agreement dealing with Corporate Governance and the details are set out in the Annexure to this report

Performance: 

 Sales of food colours during the financial year 2004-05 was higher by 2.81%. The plant utilization capacity continues to be optimally utilized. 

 The business performance continues to be robust inspite of cut throat global competition. 

 The improved business performance was also partly on account of the maximum efforts to reach out the prospective customers in untouched areas of the world and eco - friendly production practice and the development of innovative products. 

 This positive trend is likely to be maintained in the next year. 

Outlook: 

 The outlook for the company as a whole is satisfactory. Since its product portfolio spans a variety of markets, it may not be significantly impacted by adverse trends in any one industry. 

 The overall outlook promises to be bright during the current year. Nevertheless, the continuing rise in prices of key raw materials is a cause for concern particularly since the Company is unable to increase its prices in a competitive market. The focus will have to be on further improving the internal cost structure while selectively increasing prices on some products. 

In the competition for the leading manufacturer of the ever – widening gamut of food, Vidhi comes out on top with flying colours.

As per website

Vidhi Dyestuffs Manufacturing Limited is being steered towards 21^st century under the able management of their promoters Mr. Bipin Manek and Mr. Naresh Mody with his vast experience in the dyestuff industry is the force driving the R and D at VODHI. Vidhi exports 95 % of its production to leading countries of Europe, Far East, Latin America, Australia and Africa.

With an unit occupying a built up area 45000 sq. ft. Vidhi has an installed production capacity of 90 MPTM. To stay ahead of the competitors and to providers uncompromising quality, they have a highly equipped laboratory. At Vidhi the testing laboratory from ensuring quality weeds out the impurities in the raw materials a rigid process control.

The capacity quality management system would help to improve the performance and achieving businesss success. Rather than speaking their selves decided to have system assessed by an independent accredited body.

Lloyd’s Register quality assurance a leading international accredited certification body for quality assurance has approved the quality management systems of Vidhi Dyestuffs Manufacturing Limited to the international standard BS EN ISO 9001:2000 with UK national accreditation : UKAS MARK

It has taken the commitment dedication and determination of all concerned empress of the company.

“A commitment to quality an continuous R and D”

the testing laboratory “at Vidhi Dyestuffs Manufacturing Limited” is aesthetically designed and thoughtfully equipments with the latest computerized testing equipment to ensure quicker, more accurate and reproducible results. As a result, raw materials are assessed more strictly to identify and eliminate unwanted impurities and there is rigid process control for the final product. The R and D cell is earmarked to continually improve the working process and carry out basis R and D work.

With a task force of 125, Vidhi Dyestuffs Manufacturing Limited is home to well knit group of qualified, well trained technical staff in charge of Manufacturing, Testing and Technical Sales services department. The sales activity at Vidhi Dyestuffs Manufacturing Limited is well established and systematically organized, tanks to its early initiation into exports.

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.46.20
UK Pound	1	Rs.84.57
Euro	1	Rs.58.12

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--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	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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

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