MIRA INFORM REPORT

Report Date :

16.12.2008

IDENTIFICATION DETAILS

Name :	INDIAN OXIDES AND CHEMICALS LIMITED
Registered Office :	Liberty Building, Sir Vithaldas Thackersey Marg, Mumbai – 400 020, Maharashtra
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	07.06.1989
Com. Reg. No.:	11-52085
CIN No.: [Company Identification No.]	U24300MH1989PLC052085
TAN No.: (Tax Deduction & Collection Account No.)	PNEI04304G
PAN No.: (Permanent Account No.)	AAACU0797M
Legal Form :	A Closely held Public Limited Liability Company.
Line of Business :	Manufacturer of Masterbatch and Antimony Trioxide.

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 300000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is a part of Neterwala Group company whose few companies are in financial difficulties. Although, subject is performing steadily but with a thin margin of profit. It’s payment are reported as slow. The company can be considered for small to mediocre business dealings at usual trade terms and conditions with slight caution.

LOCATIONS

Registered Office :	Liberty Building, Sir Vithaldas Thackersey Marg, Mumbai – 400 020, Maharashtra, India
Tel. No.:	91-22-22066231 / 22015895 / 22017130 / 6017
Fax No.:	91-22-22082113 / 22096976
E-Mail :	daiichi@bom8.vsnl.net.in lvguniabex@vsnl.net.in lvguniabex@rediffmail.com iocl@pn2.vsnl.net.in
Factory :	Plot No. 11, F-II Block, MIDC, Pimpri, Pune – 411 018, Maharashtra, India
Tel. No.:	91-20-27475461 / 27470110/27477873
Fax No.:	91-20-27470110
E-Mail :	iocl@pn2.vsnl.net.in
Website :	http://www.iocl.india.com

DIRECTORS

Name	Mr. Dhunjishaw Maneckji Neterwala
Designation	Chairman
Address	16D, 1L, Palazza Little Gibbs Road, Malabar Hill, Mumbai – 400 006
Date of Birth	11.10.1919
Date of Appointment	07.06.1989
Election Commission Identity Card No. :	MT/04/024/045842
Name	Mr. Feroze Dhunjishaw Neterwala
Designation	Director
Address	16D, 1L, Palazza Little Gibbs Road, Malabar Hill, Mumbai – 400 006
Date of Birth	14.05.1952
Date of Appointment	07.06.1989
Election Commission Identity Card No. :	MT/04/024/042290
E-Mail:	fdn@neterwala.com
Name	Mr. Dinshaw Shapoorji Anklesaria
Designation	Director
Address	372 - A/1-2, North Main Road, Koregaon Park, Pune – 411 001, Maharashtra
Date of Birth	27.06.1932
Date of Appointment	07.06.1989
Name	Mrs. Shernaz Firoze Vakil
Designation	Director
Address	Flat 301, Shahiana, 67, E & H, Walkeshwar Road, Mumbai – 400 006
Date of Birth	16.06.1950
Date of Appointment	07.06.1989
Election Commission Identity Card No. :	MT/04/019/261866
Name	Mr. Homi Kaikhushru Bilpodiwala
Designation	Director
Address	6C, Crystal, Altamount Road, Mumbai – 400 026
Date of Birth	05.11.1928
Date of Appointment	25.10.1990
Election Commission Identity Card No. :	MT/04/024/252331
Name	Mr. Kavas Dara Patel
Designation	Director
Address	C-33, River Nest, 311, North Main Road, Koregaon Park, Pune – 411 001, Maharashtra
Date of Birth	02.02.1947
Date of Appointment	27.06.1997
Name	Mr. Hendrick Joseph Berghmans
Designation	Director
Name	Mr. Friedrick Wilhelm Hempel
Designation	Director
Name	Mr. Richard Probert Pearson
Designation	Director
Name	Mr. Neterwala Dhunjshaw Feroze
Designation	Director
Address	16 D IL, Palazzo, Little Gibs Road, Mumbai - 400 006, Maharashtra
Date of Birth	14.05.1952
Date of Appointment	07.06.1989
Name	Mr. Anklesaria Shapoorji Dinshaw
Designation	Director
Address	373/A/1-2, North Main Road, Koregaon Park, Pune – 411 001, Maharashtra
Date of Birth	27.06.1932
Date of Appointment	07.06.1989
Name	Mr. Sorabji Manek Behram
Designation	Director
Address	16-3, Rustom Baug, Sant Savta Marg, Byculla (East), Mumbai – 400 027, Maharashtra
Date of Birth	27.11.1947
Date of Appointment	19.03.2008

KEY EXECUTIVES

Name :	Mr. H. J. Gazdar
Designation :	President

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders		No. of Shares
Mr. Dhunjishaw Maneckji Neterwala		100
Mr. Feroze Dhunjishaw Neterwala		216100
Universal Ferro and Allied Chemicals Limited		1295800
Mrs. Perin Dhunjishaw Neterwala		216000
Mrs. Shernaz Firoze Vakil		216000
Mrs. Pervin Rustom Mehta		216000
	Total	2160000

Equity Share Break Up

Category	Percentage of holding
Bodies Corporate	59.99
Directors or relatives of directors	40.01
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Masterbatch and Antimony Trioxide.
Products :	Product Description Item Code No. Antimony Trioxide - 2825.8000 Master Batch - 3902.9000 Decabromodyphenyl Oxide - 29093011 Antimonym Compounds and blends - 29310090

PRODUCTION STATUS (as on 31.03.2007):-

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Antimony Trioxide	Mts.	N.A.	1000	646.34
Antimony Compounds and Blends	Mts.	N.A.	0	11.44
Master Batch Products & Compounds	Mts.	N.A.	1200	52.68

GENERAL INFORMATION

Suppliers :

* Tushavi Polysacks

* General Pharmaceuticals Limited

* Agarwao Ispat Udyog

No. of Employees :

Around 50

Bankers :

· The Zoroastrian Co-operative Bank Limited, Pune Branch, Modern House, 634, Sachapir Street, Pune – 411 001, Maharashtra

· State Bank of India, Industrial Finance Branch, Pinjari, Pune-400 001, Maharashtra

· Axis Bank Limited, Pimpri Chinchwad Branch, Pune – 411 019, Maharashtra, India

Facilities :

Secured Loans

(Rs. In millions)

Borrowings from Banks	31.03.2007
Term loan from Zoroastrian Co-op Bank (Secured by hypothecation of motor car - Amount repayable within one year Rs. 0.205 million)	0.225
Term loan from Axis Bank Limited for Master Batch (Secured by Equitable mortgage of land and building, hypothecation of plant and machinery and exclusive charge on the movable fixed assets of the company- repayable within 1 year Rs. 55.560 millions)	21.722
Cash Credit and Packing Credit facilities (Secured by a first charge by way of hypothecation of the company’s entire goods, movables and other assets, present and future, including documents of title to goods and other assets such as book debts, receivables, etc all present and future machinery, vehicle wherever situate and further secured by deposit of all title deeds of the immovable properties of the company and guaranteed by one Director of the company.)	27.660
Total	49.607

Unsecured Loans

(Rs. In millions)

	31.03.2008
From Chemical and Ferro Alloys Private Limited (the ultimate Holding Company)	6.500
From Anosh Finance and investment Limited	2.500
Total	9.000

Banking Relations :

---

Auditors :

Name :

Jagtiani and Naik

Chartered Accountants

Address :

12-13, Esplanade, 3^rd Floor, 3, Amrit Keshav Nayak Marg, Fort, Mumbai-400001, Maharashtra, India

Ultimate Holding Company :

· Chemical Ferro and Allied Chemicals Private Limited

· Universal Ferro and allied Chemicals limited

(CIN : U13200MH1956PLC009898)

Associates/Subsidiaries :

Dai Ichi Karkaria Limited

CAPITAL STRUCTURE

As on 30.09.2008

Authorised Capital :

No. of Shares	Type	Value	Amount
3000000	Equity shares	Rs. 10/- each	Rs. 30.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2160000	Equity shares	Rs. 10/- each	Rs. 21.600 millions

Note:

Of the above equity shares 1295800 shares of Rs. 10 each are held by Universal Ferro and allied Chemicals, the Holding Company.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital	21.600	21.600	21.600
2] Share Application Money	0.000	0.000	0.000
3] Reserves & Surplus	24.353	22.759	14.493
4] (Accumulated Losses)	0.000	0.000	0.000
NETWORTH	45.953	44.359	36.093
LOAN FUNDS
1] Secured Loans	49.607	32.441	20.299
2] Unsecured Loans	9.000	39.596	12.691
TOTAL BORROWING	58.607	72.037	32.990
DEFERRED TAX LIABILITIES	5.273	4.145	0.000
TOTAL	109.833	120.541	69.083
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	47.528	22.045	23.721
Capital work-in-progress	0.000	0.000	0.000
INVESTMENTS	0.101	0.100	0.100
DEFERREX TAX ASSETS	0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
Inventories	25.782	41.474	20.568
Sundry Debtors	46.219	50.645	40.256
Cash & Bank Balances	7.036	34.973	18.568
Other Current Assets	0.335	0.514	0.199
Loans & Advances	13.754	9.337	8.525
Total Assets	93.126	136.943	88.116
Less: CURRENT LIABILITIES & PROVISIONS
Current Liabilities	27.395	34.647	31.460
Provisions	3.527	3.900	11.394
Total Current Liabilities	30.922	38.547	42.854
Net Current Assets	62.204	98.396	45.262
MISCELLANEOUS EXPENSES	0.000	0.000	0.000
TOTAL	109.833	120.541	69.083

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		203.051	277.313	183.882
Other Income		4.661	4.471	3.226
Total Income		207.712	281.784	187.108
Profit/(Loss) Before Tax		6.205	12.849	9.966
Provision for Taxation		2.300	4.529	3.682
Profit/(Loss) After Tax		3.905	8.320	6.284
Export Value		18.983	10.195	26.678
Expenditures :
	Raw Material Consumed	138.861	179.344	127.783
	Purchases made for re-sale	31.829	50.312	17.643
	Consumption of Stores and Spare Parts	1.117	1.833	3.078
	Increase/(Decrease) in Finished Goods	[3.758]	3.692	1.124
	Salaries, Wages, Bonus, etc.	10.208	8.920	7.880
	Payment to Auditors	0.263	0.163	0.157
	Interest	8.541	8.631	5.444
	Insurance Expenses	0.463	0.540	0.285
	Power & Fuel	2.152	2.618	2.468
	Depreciation & Amortization	2.475	2.354	2.331
	Other Expenditure	9.356	10.528	8.949
Total Expenditure		201.507	268.935	177.142

KEY RATIOS

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
PAT / Total Income	(%)	1.88	2.93	3.36
Net Profit Margin (PBT/Sales)	(%)	3.06	4.63	5.42
Return on Total Assets (PBT/Total Assets}	(%)	4.41	8.08	8.90
Return on Investment (ROI) (PBT/Networth)		0.14	0.29	0.28
Debt Equity Ratio (Total Liability/Networth)		1.95	2.49	2.10
Current Ratio (Current Asset/Current Liability)		3.01	3.55	2.06

LOCAL AGENCY FURTHER INFORMATION

Other details:-

The company is engaged in manufacturing of masterbatch and antimony trioxide.

Subject also acts as traders of brominated compounds.

The company’s trademark is “IND-STAR”.

Performance

Financial Performance

The turnover of the Company is Rs.203.05 millions for the year 2007-08 as compared to Rs.277.313 millions for the previous year, a decrease of about 26.78%.

Profitability

The company has achieved a PBT of Rs.6.205 millions on a turnover of Rs.203.050 millions as against a PBT of Rs.12.849 millions on a turnover of Rs.277.313 millions in the previous year.

The profit after tax is Rs.4.121 millions as against Rs.8.266 millions in the previous year, a decrease of about 50.15%

Antimony Trioxide Division:

a) Domestic Market: They could achieve only 75% of their targeted sale. This was mainly on account of direct imports by their customers from China at very competitive price. Effects of these direct imports were more prominent in case of Catalyst Grade Antimony Trioxide, where in they could achieve only 58% of their targeted sale.

b) Export Market : They could achieve only 82% of their targeted sale. They could not realize orders because of cheaper prices offered by Chinese suppliers.

Masterbatch Division :

a) Own Sales : Sale of Masterbatch Division was not up to expectations, mainly on account of delays in approval of their products. The gestation period for approval is much longer than they had anticipated.

b) Job Work : They had lost Job Work orders, however, after installation of the new machines, they have once again receiving orders.

Trading / Agency Sales

Trading and Agency sales are below their targets, mainly on account of the following :

a) Import of Brominated Compounds from china at lower cost.

b) Policy decision taken by Europe based multi nationals to discontinue the use of Deca in their finished products.

Fixed assets:

· Leasehold Land

· Factory Buildings

· Plant and Machinery

· Computers and software

· Furniture and Fixtures

· Factory Building

· Research Capital Equipments

· Technical Know How Fees

· Motor Cars

Form 8:

Corporation identity number or foreign company registrations number of the company	U24300MH1989PLC052085
Name of the company	INDIAN OXIDES AND CHEMICALS LIMITED
Address	Liberty Building, Sir Vithaldas Thackersey Marg, Mumbai – 400 020, Maharashtra
This Form is for	Creation of charge
Type of Charges	Hypothecation
Particular of the charge holder	The Zoroastrian Co-operative Bank Limited Pune Branch, Modern House, 634, Sachapir Street, Pune Camp, Pune – 411001, Maharashtra, India E – mail : zoropune@yahoo.com
Nature or description of the instrument creating charge	Agreement Hypothecation of vehicles
Date of the instrument creating charge	17.04.2006
Amount Secure by the charge	Rs. 0.530 million
Brief of the principal terms and conditions and extent and operation of the charge	Loan of Rs. 0.530 million repayable in 36 equal monthly installments & shall carry interest @9.00% p.a. with monthly rests
Description of the property charge whether it is a charge on	Vehicles
Particulars of the Property charged	Maruti Esteem VXI BS – III / ICY BLUE METALLIC, ENGINE NO. : 282675; CHESIS NO. : MA3EBE41500455317; REG. NO. : MH – 14/AM - 7376

Corporation identity number or foreign company registrations number of the company	U24300MH1989PLC052085
Name of the company	INDIAN OXIDES AND CHEMICALS LIMITED
Address	Liberty Building, Sir Vithaldas Thackersey Marg, Mumbai – 400 020, Maharashtra
This Form is for	Creation of charge
Type of Charges	Immovable Property
Particular of the charge holder	Axis Bank Limited Pimpri Chinchwad Branch, Pune – 411 019, Maharashtra, India E-Mail: arvind.paratey@axisbank.com
Nature or description of the instrument creating charge	Memorandum of entry of equitable mortgage by deposit of title deeds.
Date of the instrument creating charge	27.08.2007
Amount Secure by the charge	Rs. 90.000 millions
Brief of the principal terms and conditions and extent and operation of the charge	Rate of Interest: Term Loan – PLR 2%, presently 12% p.a. Cash Credit – PLR 2%, presently 12% p.a. Inland / Import L/C – PLR 2%, presently 12% p.a. Terms of Repayment: Term Loan – in 54 monthly installments of Rs. 0.463 millions each with first installments falling due to the end of 7^th month from the date of first disbursement. Cash Credit – 12 months, payable on demand Inland / Import L/C – maximum 90 days Margin: Term Loan – 15.25% of project cost Cash Credit – stocks 25% and book debts 30% Inland / Import L/C – 10% Extent and operation of the charge: Charge on borrower immovable property situated at Plot No. 9 and 11, Block F-II, MIDC, Pimpri, Pune – 411 018, Maharashtra, India, together with the buildings and structures constructed / to be constructed thereon and all borrowers plant and machinery attached to the earth or permanently fastened, by way of an equitable mortgage by deposit of title deeds to secure the repayment by borrower to the bank of aggregate of various credit facilities of Rs. 90.000 millions
Particulars of the Property charged	Plot No. 9 and 11, Block F-II, MIDC, Pimpri, Pune – 411 018, Maharashtra, India, together with the buildings and structures constructed / to be constructed thereon and all borrowers plant and machinery attached to the earth or permanently fastened.

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 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.47.94
UK Pound	1	Rs.72.07
Euro	1	Rs.64.70

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	4
--CREDIT LINES	1~10	4
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		35

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