MIRA INFORM REPORT

Report Date :

27.11.2007

IDENTIFICATION DETAILS

Name :	VENKATARAMA CHEMICALS LIMITED
Registered Office :	36/A, Vengal Rao Nagar, Hyderabad – 500038, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	15.12.1981
Com. Reg. No.:	01-3322
CIN No.: [Company Identification No.]	U24110AP1981PLC003322
TAN No.: [Tax Deduction & Collection Account No.]	HYDV01088D / HYDV01094C
PAN No.: [Permanent Account No.]	AAACV6830A
Legal Form :	A closely held public limited liability company
Line of Business :	Manufacturers of Chlorheniramine Maleate, Brompheniramine Maleate and Mepyramine

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 260000
Status :	Moderate
Payment Behaviour :	Slow by average 40 days
Litigation :	Clear
Comments :	Subject is an established company having moderate track. The company has some accumulated losses. It’s payments are reported as slow but correct. It can be considered for small to mediocre business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	36/A, Vengal Rao Nagar, Hyderabad – 500038, Andhra Pradesh, India
Tel. No.:	91-40-23801486 / 23700915 / 23814863
Fax No.:	91-40-23700731
E-Mail :	hyd1_amarbabu@sancharnet.in bnandcompany@yahoo.com
Website :	http://www.venkataramachem.com
Area :	Owned
Factory :	Survey No. 50, Karohanoor Village, Medak District, Andhra Pradesh, India
Area :	Owned – 4.37 acres

DIRECTORS

Name :	Mr. V S N Murthy
Designation :	Managing Director
Address :	36/A, Vengal Rao Nagar, Hyderabad – 500038, Andhra Pradesh, India
Date of Birth/Age :	23.03.1936
Date of Appointment :	15.12.1981
Name :	Mr. V Ramakrishna Rao
Designation :	Director
Address :	Yeditha, East Godavari District, Andhra Pradesh, India
Date of Birth/Age :	06.10.1930
Date of Appointment :	15.12.1981
Name :	Mr. M S Venkatanarayana
Designation :	Director
Address :	Plot No. 9, Srinivas Colony, Hyderabad – 500038, Andhra Pradesh, India
Date of Birth/Age :	06.01.1931
Date of Appointment :	15.12.1981
Name :	Mr. M Mani Bhupathy
Designation :	Director (Technical )
Address :	Flat No. 303, Ramakrishna Towers Nagarjuna Nagar, Hyderabad – 500016, Andhra Pradesh, India
Date of Birth/Age :	15.09.1941
Date of Appointment :	23.11.1984
Name :	Mr. U. Amarnath
Designation :	Director
Address :	36/A, Vengal Rao Nagar, Hyderabad – 500038, Andhra Pradesh, India
Date of Birth/Age :	17.04.1963
Date of Appointment :	28.08.1995

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
V. Surayanarayana Murthy	50132
M. M. Bhupathy	10000
B. Meenakshi	2000
V. Ramakrishna Rao	17000
T. Ram Murthy	56554
T. Laksmi	38566
V. Styanarayana	11108
V. Manikyamba	19600
T. Laskmi	5400
B. Ramakrishna Chowdary	33840
V. Lakshmi	6400
U Amarnath	24960
U. Sitamaha Lakshmi	19600
A. Madhuri	23340
B. Gayatridevi	6100
M. Satyavenkatnarayana	400
N. Suryanarayan	400
N. Lakshmi	400
TOTAL	325800
Equity Share Breakup	Percentage of Holding
Category
Directors or relatives of directors	100.00

BUSINESS DETAILS

Line of Business :	Manufacturers of Chlorheniramine Maleate, Brompheniramine Maleate and Mepyramine
Products :	Chlorheniramine Maleate Brompheniramine Maleate Mepyramine Maleate
Exports :
Countries :	Hong Kong, Singapore and Germany

GENERAL INFORMATION

No. of Employees :	About 40
Bankers :	State Bank of India, Balkampet Branch, Hyderabad 500 038 HDFC Bank

Banking Relations :	Satisfactory
Auditors :
Name :	B N & Company Chartered Accountants
Address :	8-2-120/112/A/14, Road No. 9. Jubilee Hills, Hyderabad -500 034
Associates/Subsidiaries :	Harika Drug Private Limited 36/A, Vengal Rao Nagar, Hyderabad – 500038, Andhre Pradesh, India

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1000000	Equity Shares	Rs. 10/- each	Rs. 10.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
325800	Equity Shares	Rs. 10/- each	Rs. 3.258 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		3.258	3.258	3.258
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		62.338	62.338	62.338
4] (Accumulated Losses)		[1.784]	[2.561]	[1.314]
NETWORTH		63.812	63.035	64.282
LOAN FUNDS
1] Secured Loans		9.305	3.133	2.874
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		9.305	3.133	2.874
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		73.117	66.168	67.156
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		6.200	3.974	4.371
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories			6.716
	Sundry Debtors			12.655
	Cash & Bank Balances	76.751	71.713	0.021
	Other Current Assets			30.977
	Loans & Advances			22.188
Total Current Assets		76.751	71.713	72.557
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	9.834	9.519	9.772
	Provisions
Total Current Liabilities		9.834	9.519	9.772
Net Current Assets		66.917	62.194	62.785
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		73.117	66.168	67.156

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		35.801	37.585	40.355
Other Income		18.908	49.237	12.909
Total Income		54.709	86.822	53.264
Profit/(Loss) Before Tax		53.933	86.160	[1.531]
Provision for Taxation		0.777	0.662	--
Profit/(Loss) After Tax		53.156	85.498	[1.531]
Earnings in Foreign Currency :
Total Earnings		NA	NA	21.972
Expenditures :
	Increase/(Decrease) in Finished Goods	[1.063]	[1.131]	0.000
	Salaries, Wages, Bonus, etc.	5.897	4.682	0.000
	Payment to Auditors	0.015	0.015	0.000
	Interest	0.120	0.185	0.154
	Insurance Expenses	2.282	1.054	0.000
	Power & Fuel	2.168	2.532	0.000
	Depreciation & Amortization	0.698	0.578	0.630
	Other Expenditure	43.814	78.245	54.051
Total Expenditure		53.931	86.160	54.835

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	97.16	98.48	[2.87]
Net Profit Margin (PBT/Sales)	(%)	150.65	229.24	[3.79]
Return on Total Assets (PBT/Total Assets}	(%)	65.02	113.84	[1.99]
Return on Investment (ROI) (PBT/Networth)		0.85	1.37	[0.02]
Debt Equity Ratio (Total Liability/Networth)		0.30	0.20	0.20
Current Ratio (Current Asset/Current Liability)		7.80	7.53	7.42

LOCAL AGENCY FURTHER INFORMATION

Bankers Charges Report as per Registry

Name of the company	VENKATARAMA CHEMICALS LIMITED
Presented By	Mr. V. S. N. Murthy, Managing Director
1) Date and description of instrument creating the change	27.04.1993
2) Amount secured by the charge/amount owing on the securities of charge	Short Term Loan Rs. 8.900 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	Current assets : of the company in the form of Raw Materials Materials in process Finish goods Bills
4) Gist of the terms and conditions and extent and operation of the charge.	1^st charge on current assets and 2^nd charge on fixed assets of the company
5) Name and Address and description of the person entitled to the charge.	State Bank of India Balkampet Hyderabad
6) Date and brief description of instrument modifying the charge	10.09.1993 Pronote DP Note Delivery Letter Pledge letter in respect of machinery accepted as collateral security Hypothecation agreement Cash credit agreement Hypothecation of debts and assets
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.	--

Corporate identity number of the company	U24110AP1981PLC003322
Name of the company	VENKATARAMA CHEMICALS LIMITED
Address of the registered office or of the principal place of business in India of the company	36/A, Vengal Rao Nagar, Hyderabad – 500038, Andhra Pradesh, India
This form is for	Creation of Charge
Type of charge	Hypothecation Equitable mortgage or mortgage of property by deposition the title deeds
Particular of charge holder	State Bank of India, Balkampet Branch, H. No. 7-1-621, Swastik Plaza, Hyderabad 500 038, Andhra Pradesh, India
Nature of instrument creating charge	Agreement of loan – cum – hypothecation dated 10.08.2006 Memorandum for recording creation of mortgage by deposit of title deeds dated 10.08.2006
Date of instrument Creating the charge	10.08.2006
Amount secured by the charge	Rs. 8.400 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Limits – CC Rs. 3.400 Millions LC : Rs. 4.000 Millions and BG : Rs. 1.000 Millions ROI : 1.50 % above SBAR with a minimum of 12.25 % p.a. Margin : Raw Materials, Semi finished goods, finished goods and components / consumables / spares – 25 % Domestics Receivables – 40 % Letter of credit – 25 % and Bank Guarantee : 25 %
Description of the property charged indicating whether it is a charged on	Immovable properties Plant and Machinery Stock in trade Furniture and fixture Vehicles Book debts
Particulars of the property charged	Hypothecation of Stocks and Receivables Equitable mortgage on Survey No. 50, Kardanoor Village, Patishanapoor, Panchayat Sangareddy Taluq and Medak District to an Extent of AC 4.37 Guntas

The company is engaged in manufacture of Bulk Drug and Intermediates.

Subject is a Small Scale Industries Unit.

Fixed Assets

• Land and Building
• Lab Equipment
• Furniture and Fixture
• Fire Fitting Equipment
• Motor Car
• Motor Cycle
• Fax Machine
• Xerox Machine
• Air Conditioner

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.39.68
UK Pound	1	Rs.81.95
Euro	1	Rs.58.79

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	2
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--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		28

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.	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