MIRA INFORM REPORT

Report Date :

05.06.2007

IDENTIFICATION DETAILS

Name :	GULSHAN CHEMICALS LIMITED
Registered Office :	E-12, Greater Kailash -1, Ground Floor, New Delhi-110048, Delhi
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	22.05.1985
Com. Reg. No.:	55-20270
CIN No.: [Company Identification No.]	U24231DL1985PLC020270
TAN No.: [Tax Deduction & Collection Account No.]	DELG06430E
PAN No.: [Permanent Account No.]	AAACG4002H
Legal Form :	Closely held Public Limited Liability Company
Line of Business :	Manufacturers of Basic Inorganic Chemicals.

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 640000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	E-12, Greater Kailash -1, Ground Floor, New Delhi-110048, Delhi, India
Tel. No.:	91-11-26217424/ 29237424
Fax No.:	91-11-2924875
E-Mail :	gulshanchemicals@airtelbroadband.in

DIRECTORS

Name :	Mr. Pradeep Jain
Designation :	Chairman and Managing Director
Address :	W-121, 1^st Floor, Greater Kailash II, New Delhi-110048
Date of Birth/Age :	15.12.1952
Date of Appointment :	30.09.2006
Name :	Mr. Chandra Kumar Jain
Designation :	Director
Address :	N-142, 1^st Floor, Pansheel Park, New Delhi-110048
Date of Birth/Age :	04.06.1948
Date of Appointment :	26.02.1985
Name :	Mrs. Arti Jain
Designation :	Director
Address :	W-121, 1^st Floor, Greater Kailash II, New Delhi-110048
Date of Birth/Age :	24.11.1956
Date of Appointment :	30.09.2006
Name :	Mrs. Mridula Jain
Designation :	Director
Name :	Ms. Arushi Jain
Designation :	Director
Name :	Mr. Praveen Kumar Jain
Designation :	Director
Name :	Dr. V K Sharma
Designation :	Director
Name :	Mr. Sumat Jain
Designation :	Director
Name :	Ms. Gulisha Jain
Designation :	Director
Address :	W-121, 1^st Floor, Greater Kailash II, New Delhi-110048
Date of Birth/Age :	15.10.1985
Date of Appointment :	10.08.2006

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
Mr. Pradeep Kumar Jain	4000000
Ms. Arti Jain	700000
Mr. Chander Kumar Jain	400
Mr. Gulshan Jain	245400
Ms. Savini Jain	245400
Mr. Santosh Jain	4000
Mr. Kanak Jain	4000
Mr. Anurag Jain	400
Mr. Rajat Jain	400

All the shares are held by directors and their relatives.

BUSINESS DETAILS

Line of Business :

Manufacturers of Basic Inorganic Chemicals.

Products :

Product Description	ITC Code
Sodium Hydrosulphate	283210
Spent Acid (By product)	280700
Sodium Sulphite (By product)	--

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Sodium Hydrosuphite	MT	15000	12000	8207.145
Sodium Sulphite	MT	4500	3600	2449.900
Spent Acid (By product)	MT	--	127.210	--

GENERAL INFORMATION

Bankers :

State Bank of India, Friends Colony, New Delhi

Industrial Development Bank of India Limited, IDBI Tower, WTC Complex, Cuffe Parade, Mumbai-400005, Maharashtra

Facilities :

Secured Loans :

31.03.2005 (Rs. In millions)

Term Loan
From Industrial Development Bank of India	46.336
Working Capital Loan
From State Bank of India	26.577
Total	72.914

Banking Relations :	Satisfactory
Auditors :
Name :	Mr. Sumant Agarwal Chartered Accountants
Address :	A-58, Anand Vihar, 1^st Floor, Delhi-110092

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
5900000	Equity Shares	Rs.10/- each	Rs.59.000 millions
10000	Preference Shares	Rs.100/- each	Rs.1.000 millions
	Total		Rs.60.000 millions

Issued Capital :

No. of Shares	Type	Value	Amount
5900000	Equity Shares	Rs.10/- each	Rs.59.000 millions
10000	Preference Shares	Rs.100/- each	Rs.1.000 millions
	Total		Rs.60.000 millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5200000	Equity Shares	Rs.10/- each	Rs.52.000 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		52.000	52.000	13.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		109.115	69.645	100.335
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		161.115	121.645	113.335
LOAN FUNDS
1] Secured Loans		89.035	72.914	34.161
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		89.035	72.914	34.161
DEFERRED TAX LIABILITIES		0.000	27.852	27.611
TOTAL		250.150	222.411	175.107
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		117.332	117.060	113.214
Capital work-in-progress		44.265	14.054	0.099
INVESTMENT		0.000	25.337	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	26.673	22.664	32.415
	Sundry Debtors	65.569	64.789	45.525
	Cash & Bank Balances	10.642	0.210	0.999
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	59.035	25.742	15.190
Total Current Assets		161.919	113.405	94.129
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	73.366	47.445	32.335
	Provisions	0.000	0.000	0.000
Total Current Liabilities		73.366	47.445	32.335
Net Current Assets		88.553	65.690	61.794
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		250.150	222.411	175.107

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		435.028	391.689	354.331
Other Income		5.972	(7.599)	0.010
Total Income		441.000	384.088	354.341
Profit/(Loss) Before Tax		41.594	25.245	41.115
Provision for Taxation		0.000	8.241	14.824
Profit/(Loss) After Tax		41.594	17.004	26.291
Total Imports		NA	7.179	1.811
Expenditures :
	Manufacturing Expenses	NA	163.681	136.508
	Administrative Expenses	NA	18.511	20.063
	Raw Material Consumed	176.449	163.841	145.105
	Salaries, Wages, Bonus, etc.	14.300	NA	NA
	Managerial Remuneration	2.440	NA	NA
	Payment to Auditors	0.273	NA	NA
	Interest	5.842	NA	NA
	Insurance Expenses	0.696	NA	NA
	Power & Fuel	72.706	NA	NA
	Depreciation & Amortization	126.700	9.991	8.873
	Other Expenditure	399.406	2.819	2.677
Total Expenditure		399.406	358.844	313.226

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	9.43	4.43	7.42
Net Profit Margin (PBT/Sales)	(%)	9.43	6.57	11.60
Return on Total Assets (PBT/Total Assets}	(%)	14.89	10.95	19.83
Return on Investment (ROI) (PBT/Networth)		0.26	0.21	0.36
Debt Equity Ratio (Total Liability/Networth)		1.01	0.99	0.59
Current Ratio (Current Asset/Current Liability)		2.21	2.39	2.91

LOCAL AGENCY FURTHER INFORMATION

Form 8 Particular for creation or modification of charges

Name of the company

GULSHAN CHEMICALS LIMITED

Presented By

State Bank of India, Commercial Branch, Nehru Place, New Delhi-19

1) Date and description of instrument creating the change

Form C1, C2 and C5 dated 19.05.2000 and declaration and undertaking for deposit of title deed for joint mortgage with IDBI

2) Amount secured by the charge/amount owing on the securities of charge

Rs.39.000 millions as follows :

Facilities	Rs. (in millions)
CC (Hypothecation of stock)	32.500
EPC	(32.500)
CC (Book debts)	(12.000)
IBD/IVD/FBD/FBP	(5.000)
Non Fund Based
LC	4.000
BG	2.500
Total	39.000

3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given

Hypothecation of company’s stock of raw material, consumable spares, stock in process, finished goods lying in company’s factory premises/ godown / in transit or any where else, while arriving at drawing power, stock purchase under usance, stock of credit and other unpaid stocks will be adjusted.

Hypothecation of company’s all present and future book debts, receivables, payment received by future book debts receivable payment.

Payment received by way of any advance payment or negotiation/ discount purchase of bills and will not be counted for arriving at drawing power.

2^nd charge of land and building and other fixed assets a A-595 and A-595A RIICO Industrial Area, Bhiwandi, District Alwar, Rajasthan.

4) Gist of the terms and conditions and extent and operation of the charge.

Rate of interest @ 2.25% above SBAR+ Interest tax effective rate @ 14.33% p.a. payable on demand.

5) Name and Address and description of the person entitled to the charge.

State Bank of India, Friends Colony, New Delhi

6) Date and brief description of instrument modifying the charge

Supplemental agreement of loan for increase in overall limit (C-1A) dated 24.05.2005

Supplemental agreement of hypothecation of goods and assets for increase in overall limit (C-2A) dated 24.05.2005.

Letter regarding the grant of individual limit within the overall limit (C-5) dated 24.05.2005

7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.

The limit stands enhanced from Rs.39.000 millions to Rs.60.000 millions as follows :

(Rs. in millions)

Faciliities	Existing	Enhanced
CC (Hypothecation of stock)	32.500	37.500
CC (Book debts)	(12.000)	(30.000) within CC Hypothecation
SLC	--	7.500
Total fund based	32.500	45.000
Non Fund Based
LC	4.000	12.500
BG	2.500	2.500
Total NFB	6.500	15.000
Total (FB+NFB)	39.000	60.000

Security : Primary

For CC Hypothecation

First charge over current assets including hypothecation of stocks and receivables/ book debts including goods in transit

For LC/BG

Extension of charge on current assets of the company

Collateral

Second charge on the fixed assets of the company

Rate of interest :

Interest will be charged @ 1.50% below SBAR. The present effective rate 8.75% p.a. with monthly rests subject to changes as per RBI/Bank guidelines from time to time.

Margin :

RM/SIP/FG/SLC-25%, Receivables-40% (cover period 90 days), LC and BG 10%

Other terms and conditions remain same.

(The limit has been transferred from SBI, Friends Colony to State Bank of India, Nehru Place, New Delhi-19).

Corporation identity number or foreign company registrations number of the company	U24231DL1985PLC020270
Name of the company	GULSHAN CHEMICALS LIMITED
Address	E-12, Greater Kailash -1, Ground Floor, New Delhi-110048, Delhi, India
This Form is for	Creation of charge
Type of Charges	Hypothecation
Particular of the charge holder	Industrial Development Bank of India Limited IDBI Tower, WTC Complex, Cuffe Parade, Mumbai-400005 Maharashtra
Date of the instrument creating charge	27.03.2006
Amount Secure by the charge	Rs.100.000 millions
Description of the property charge whether it is a charge on	Immovable properties Plant and machinery Furniture and fixtures Vehicles Intangible assets

Company’s fixed assets include Land, Building Office, Building Factory, Plant and Machinery, Furniture and Fixtures, Vehicles, Office Equipments, Energy Saving Equipments, Water Pollution Control Equipments, Computer and Water Tubewell.

Contingent Liabilities :

	31.03.2005	31.03.2004
Letter of credit discounted but not matured	15.472	9.999
Guarantees given to Banks, etc. in respect of third parties	0.650	0.450

Sales tax liability on account of non receipt of C forms for past two financials is not determined.

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.40.56
UK Pound	1	Rs.80.81
Euro	1	Rs.54.74

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	7
--PROFITABILIRY	1~10	5
--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	NO
--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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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