MIRA INFORM REPORT

Report Date :

28.02.2007

IDENTIFICATION DETAILS

Name :	AROFINE POLYMERS LIMITED
Registered Office :	B - 5, STC Society, N. S. Phadke Marg, Andheri (E) Mumbai - 400 069
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	08.09.1989
Com. Reg. No.:	11-53381
CIN No.: [Company Identification No.]	U24222MH1989PLC053381
Legal Form :	A closely held public limited liability company.
Line of Business :	Manufacturers of Synthetic Emulsions

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 200000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. Financials position is good. Trade relations are fair. Payments are correct and as per commitments. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a medium to long-run.

LOCATIONS

Registered Office :	B - 5, STC Society, N. S. Phadke Marg, Andheri (E) Mumbai - 400 069
Tel. No.:	91-22-26820852/26821960/8365852
Fax No.:	91-22-28350381
E-Mail :	colorbondmum@gmail.com
Factory 1 :	S - 42, M I D C Bhosari , Pune - 411 026

SOLE PROPRIETOR/PARTNERS/DIRECTORS

Name :	Mr. Jagdish Maruti Nadkarni
Designation :	Directors
Address :	601, Samrat Co-operative housing Society, 314, L.J. Road, Mahim, Mumbai-400016, Maharashtra
Date of Birth :	21.09.1937
Date of Appointment :	01.01.1996
Name :	Mr. Shrinivas B Sardesai
Designation :	Directors
Address :	7/8, Atharva, 50, Ashok Co-operative Housing Society, Ashok Nagar, Pune-411007, Maharashtra
Date of Birth :	07.09.1947
Date of Appointment :	01.01.1996
Name :	Mr. Vinay V Ghotge
Designation :	Directors
Address :	301-Adhwar, 111/9 Erandwane, 14^th Lane, Prabhat Road, Pune-411004, Maharashtra
Date of Birth :	20.03.1951
Date of Appointment :	01.11.1989

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
Mr. Jagdish Maruti Nadkarni	3000
Mr. Sriniwas Bajirao Sardesai	8000
Mr. Vinay Vasant Ghotge	12000
Mr. Vishwas Vasant Ghotge (HUF)	7000
Mr. Vishwas Vasant Ghotge	2000
Mrs. Supriya V. Ghotge	10000
Mr. Rohan V. Ghotge	5000
Mrs. Sumedha V. Ghotge	12000
Ms. Vidula V. Ghotge	2500
Ms. Mrudula Ghotge	2500
Mr. Ajit Narayan Khot (HUF)	3000
Mr. Ajit N. Khot	3000
Mrs. Sucheta A Khot	3000
Mr. Ameya A Khot	3000
Mr. Jagdish M. Nadkarni	3000
Mrs. Jayashree J. Nadkarni	42000
Mrs. Sheetal S Sardesai	2000
Mr. Gaurang S Sardesai	400
Total	120000

BUSINESS DETAILS

Line of Business :	Manufacturers of Synthetic Emulsions
Products :	Synthetic Emulsions

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Synthetic Emulsions	tons	1100.00 tons per annum	2110.32 tons (2017.94) during the year

GENERAL INFORMATION

Bankers :	v State Bank of India, Industrial Finance Branch, Pune - Mumbai Road, Pune. v Commercial Branch, Vile Parle (East), Mumbai. v ICICI Bank Limited
Facilities :	Secured Loans : Cash Credit A/c : Rs.0.869 millions

Banking Relations :	Good
Auditors :	Mr. S. S. Yeolekar Chartered Accountants
Address :	3, Laxmi Nivas, Subhash Road B, Near National Plastics, Vile Parle (East), Mumbai-400057, Maharashtra, India

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
250000	Equity Shares	Rs. 10/- each	Rs. 2.500 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
120000	Equity Shares	Rs. 10/- each	Rs. 1.200 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		1.200	1.200	1.200
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		56.365	46.486	42.735
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		57.565	47.686	43.935
LOAN FUNDS
1] Secured Loans		0.000	0.869	0.197
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	0.869	0.197
DEFERRED TAX LIABILITIES		0.558	0.645	0.000
TOTAL		58.123	49.200	44.132
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		26.793	12.452	8.360
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		1.500	12.000	14.203
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	13.499	17.260	10.546
	Sundry Debtors	15.757	6.370	8.722
	Cash & Bank Balances	10.044	5.699	7.471
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	11.519	10.419	11.829
Total Current Assets		50.819	39.749	38.568
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	5.555	6.626	6.163
	Provisions	15.434	8.375	10.836
Total Current Liabilities		20.989	15.001	16.999
Net Current Assets		29.830	24.748	21.569
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		58.123	49.200	44.132

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		167.633	117.942	107.414
Other Income		1.113	3.648	2.990
Total Income		168.746	121.590	110.404
Profit/(Loss) Before Tax		14.822	5.720	9.144
Provision for Taxation		19.789	7.920	2.633
Profit/(Loss) After Tax		(4.967)	(2.200)	6.511
Total Earnings		NA	1.447	2.784
Expenditures :
	Manufacturing Expenses	NA	NA	18.432
	Administrative Expenses	NA	NA	1.142
	Raw Material Consumed	120.120	85.461	73.812
	Increase/(Decrease) in Finished Goods	0.954	(1.142)	(0.715)
	Salaries, Wages, Bonus, etc.	NA	NA	5.126
	Finance Charges	NA	NA	0.235
	Depreciation & Amortization	1.145	1.216	1.008
	Other Expenditure	31.705	30.334	2.220
Total Expenditure		153.924	115.869	101.260

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	(2.94)	1.81	5.89
Net Profit Margin (PBT/Sales)	(%)	8.78	4.70	8.28
Return on Total Assets (PBT/Total Assets}	(%)	19.09	10.95	19.49
Return on Investment (ROI) (PBT/Networth)		0.26	0.12	0.21
Debt Equity Ratio (Total Liability/Networth)		0.36	0.33	0.39
Current Ratio (Current Asset/Current Liability)		2.42	2.65	2.27

LOCAL AGENCY FURTHER INFORMATION

Form 8 Particular for creation or modification of charges

Name of the company	AROFINE POLYMERS PRIVATE LIMITED
Presented By	State Bank of India, Deccan Gymkhana Branch, Mumbai-400020
1) Date and description of instrument creating the change	General agreement for the grant of small Industrial Advances and hypothecation of movable book debts and other assets dated 29.02.1990
2) Amount secured by the charge/amount owing on the securities of charge	Rs.2.500 millions
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 synthetics resins, emulsions for Industrial use all present and future goods, book debts, outstanding moneys, recently able, claims, bills, invoices etc.
4) Gist of the terms and conditions and extent and operation of the charge.	R.O.I. 1% below SBAR minimum 15.5 % p.a.
5) Name and Address and description of the person entitled to the charge.	State Bank of India, Deccan Gymkhana Branch, Pune-4
6) Date and brief description of instrument modifying the charge	Supplementary general agreement dated 04.11.1993 Ancillary agreement No.1, 3 and 6 dated 04.11.1993 Guarantee agreement dated 04.11.1993 All the above agreements constitute a charge
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 original charge was created on 29.12.1990 for Rs.2.500 millions now by the present modification dated 04.11.1993 the limit increased by Rs.5.200 millions making total to Rs.7.700 millions

Name of the company	AROFINE POLYMERS PRIVATE LIMITED
Presented By	State Bank of India, Deccan Gymkhana Branch, Mumbai-400020
1) Date and description of instrument creating the change	General agreement for the grant of small Industrial Advances and hypothecation of movable book debts and other assets dated 29.02.1990
2) Amount secured by the charge/amount owing on the securities of charge	Rs.2.500 millions
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	Manufacturing of synthetics resins, emulsions for Industrial use all present and future goods, book debts, outstanding moneys, recently able, claims, bills, invoices etc.
4) Gist of the terms and conditions and extent and operation of the charge.	Rate of interest 1% below SBAR minimum 15.5 % p.a.
5) Name and Address and description of the person entitled to the charge.	State Bank of India, Deccan Gymkhana Branch, Pune-4
6) Date and brief description of instrument modifying the charge	Mortgage by deposit of title deeds dated 24.01.1994.
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 original charge was created on 29.12.1990 for Rs.2.500 millions now by the present modification dated 04.11.1993 the limit increased by Rs.5.200 millions making total to Rs.7.700 millions by this modification dated 24.01.1994 a first charge on the said immovable properties and any other buildings structures immovable plant and machinery and all that piece of parcel of Land known as plot No.42 in the Pimpri Industrial Area within the village limits of Bhosari, Tal and Regn. Sub district by admeasuring 806 Sq. mtrs. or thereabouts and bounded by red coloured boundary lines on the plan annexed hereto, that is to say On or towards the north by plot No.41 On or towards the south by Open space On or towards the east by plot No.61 and On or towards the West by Estate Road.

FIXED ASSETS

Ø Land

Ø Building

Ø Plant and Machinery

Ø Furniture and Fixture

Ø Electrical Installations

Ø R & D Equipments

Ø Vehicles

Ø Office Equipments

Ø Air Conditioners

Ø Refrigerators

Ø Water Coolers

Ø EPBX

Ø Computers

Ø Printers

During the year under report the gross sales have increased by about 11.10 % at Rs.1376.3 millions from Rs.123.8.6 millions in the previous year and the profit before tax is at Rs.5.720 millions as against Rs.9.144 millions of previous year. Earning Per Share for the year is Rs.47.67 against Rs.76.20 for the year 2003-04.

OPERATIONS

Even though the company achieved a higher turnover as compared to previous year, profitability was lower because of increase in the prices of major raw materials resulting in raw material consumption ratio to sales jumping from 59.00 % to 60.60 % in the year under reference. Increase in local taxes like octroi and freight & forwarding charges have also contributed for the decline in profitability for the year. Since the installed capacity is being utilized to full extent for last many years, the company was looking out for a large piece of land in the vicinity of MIDC. Bhosari area. They were able to procure a teadymade plot at MIDC Bhosari very close to our premises, with basic infrastructures in an auction conducted by the DEBT RECOVERY TRIBUNAL - Pune, authorities. Payment schedules and transfer of titles etc. are being completed. The company had planned to develop and start production of new products range like ACR030L AQUEOUS OVERPRINT MEDIUM & ACROTECH UV CURE MEDIUM. With the acquisition of new place the company will be able to take full advantage and go ahead with the much awaited expansion Programme.

DIVIDEND

The company will be in need of increased working capital preceding the developments as explained above and hence in order to conserve the resources the Directors do not recommend any dividend for the year 2004-05.

FINANCE

In view of acquisition of the plot as explained above funds kept in short term investments was partially utilized. The company was not able to reap the benefits on the investments made in private funds, because of faulty policies based on the advises of the market analysts. The company could earn a net benefit of Rs.0.225 millions on an average investment of about Rs.12.5 millions during the year. The company had earned Rs.2.278 millions in the previous year on investments of equal amount. It is hoped that corrective measures are taken to in the current year.

BANKERS

The Directors wish to place on record their sincere thanks to the Bankers of the Company, State Bank of India, Industrial Finance Branch of Pune and Commercial Branch, Vile Parle (East) Branch Mumbai, for their continued support to the Company.

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.44.28
UK Pound	1	Rs.86.62
Euro	1	Rs.58.32

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		70

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