MIRA INFORM REPORT

Report Date :

23.12.2008

IDENTIFICATION DETAILS

Name :	DYSTAR INDIA PRIVATE LIMITED
Registered Office :	R – 855, TTC Industrial Area, Rable, P O Ghansoli, Navi Mumbai – 400701, Maharashtra
Country :	India
Financials (as on) :	31.12.2007
Date of Incorporation :	20.11.1995
Com. Reg. No.:	11-94620
CIN No.: [Company Identification No.]	U24114MH1995PTC094620
TAN No.: [Tax Deduction & Collection Account No.]	PNED03254G
PAN No.: [Permanent Account No.]	AABCD0295N
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer and Exporter of Garments

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 1300000
Status :	Satisfactory
Payment Behaviour :	No Complaints
Litigation :	Clear
Comments :	Subject is a well established and reputed company having satisfactory track. Trade relations are fair. Business is active. No complaints have been heard. The company can be considered good for normal business dealings

INFORMATION PARTED BY

Name :	Mr. Kedar
Designation :	Accountant Officer
Date :	22.12.2008

LOCATIONS

Registered Office/lab :	R – 855, TTC Industrial Area, Rable, P O Ghansoli, Navi Mumbai – 400701, Maharashtra
Tel. No.:	91-22-40349000
Fax No.:	91-22-40349010
E-Mail :	jaisalmerianaveen@dystar.com
Website :	http;//www.dystarindia.com
Area :	3500 Sq. ft
Location :	Leased
Corporate Office :	Marwah House, Ground Floor, Krishanlal Marwah Marg, Saki Vihar Road, Saki Naka, Andheri (East), Mumbai – 400072, Maharashtra
Tel. No.:	91-22-28039000
Fax No.:	91-22-28039010
E-Mail :	cgaramamurthi@dystarindia.com, ramamurthi.chiloor@dystar.com
Factory 1 :	Plot No. 3002, S/A GIDC, Ankleshwar – 393002
Tel. No.:	91-2646-22101518

DIRECTORS

Name :	Mr. Downie Stuart Michael
Designation :	Director
Address :	Beech Hill Easton, Winchester Hampshiie, S021 1E, UK
Date of Birth/Age :	28.01.1949
Date of Appointment :	06.12.2004
Name :	Ms. Monica Eva Kaiawski
Designation :	Director
Address :	2013 Canal Street, Venice California, California – 90291, USA
Date of Birth/Age :	23.05.1955
Date of Appointment :	22.09.2006
Name :	Mr. Bernardus Jalvan Kuijk
Designation :	Director
Address :	Shimira Flat No. 7E & 8E, 16^th Road, Khar (West), Mumbai – 400052
Date of Birth/Age :	15.04.1965
Date of Appointment :	19.09.2003
Name :	Mr. Ramamurthu G Chittur
Designation :	Director
Address :	Flat No. A / 2, Sahavasi Chs Ltd, Sector 4, Vashi – 400703, Maharashtra
Date of Birth/Age :	03.12.1958
Date of Appointment :	18.09.1996

Name :	Mr. Stefan Golbs-Wilms
Designation :	Vice Chairman and Managing Director
Address :	Mumbai Central, Mumbai – 400 011
Date of Birth/Age :	47 Years
Qualification :	Industrial Business Administration
Date of Joining	1^st March, 2000
Last Employment	Product Manager – Dystar Textifarben GmbH & Company, Deutschland KG – 1.5 Years
Name :	Mr. Ramesh Subrahmanian
Designation :	Director
Address :	Nepeansea Road, Mumbai – 400 006
Date of Joining	13^th November, 1997
Name :	Mr. Govind Gopal Patkar
Designation :	Director (Alternate to Mr. H. Groh)
Address :	Mumbai Agra Road, Thane – 400 608
Name :	Dr. Andrean H. Henneken
Designation :	Director (Foreigner)
Address :	Peddar Road, Mumbai – 400 026
Date of Joining	29^th September, 2000
Name :	Mr. Peter Alfreo Zinser
Designation :	Director (Foreigner)
Address :	Singapore
Date of Joining	6^th December, 2000
Name :	Mr. Dieter Willi Kamback
Designation :	Director (Foreigner)
Address :	Mumbai – 400 006
Date of Joining	6^th December, 2000
Name :	Mr. Prasad P. Chandran
Designation :	Director
Address :	Mumbai – 400 026
Date of Joining	16^th December, 2000

KEY EXECUTIVES

Name :	Mr. Kedar
Designation :	Accounts Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 21.05.2008

Names of Shareholders	No. of Shares
Dystar Textilfarben GmbH (Germany)	2228152
Dystar Singapore Pte	1

AS ON 30.06.2008

Equity Share Breakup	Percentage of Holding
Category
Bodies corporate	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Garments

Products :

Product Description	ITC Code
Remazol Black B 133	320429000

Product Description	ITC Code
Remazol Deep Black N - 150	320429000

Product Description	ITC Code
Remazol Turquoise Blue G - 133	320429000

Exports :

Countries :

Asian Countries, European

Imports :

Countries :

Germany and Singapore

Terms :

Selling :

Cash and Credit (30 days)

Purchasing :

Cash and Credit (90 days)

PRODUCTION STATUS

AS ON 31.12.2006

Particulars	Unit	Actual Production
Sunthetic Organic Dyestuffs	MT	1826

GENERAL INFORMATION

Customers :

Distributor and Stockiest

No. of Employees :

66

Bankers :

v Deutsche Bank, Mumbai

v The Hongkong & Shanghai Banking Corporation Limited

Facilities :

Secured Loan	31.03.2007
Finance lease liability (Secured by plant and machinery taken on lease	19.637
Unsecured Loan
From holding company Long term loan from Dystar Textilfarben GMBH, Germany of Euro 2.7 Milli0on	154.184

Banking Relations :	--
Auditors :
Name :	S R Batliboi and Associates Chartered Accountant
Address :	6^th Floor, Expess Towers, Nariman Point, Mumbai – 400021, Maharashtra
Holding Company :	Dystar Textilfarben GMBH – Germany
Subsidiaries :	Texanlab Laboratories Private Limited Dystar Singapore Private Limited Dystar China Limited Dystar Thai Limited Dystar Textilfarben GMBH and Co. Deutschland KG
Associates :	Color-Chem Limited, Mumbai

CAPITAL STRUCTURE

AS ON 31.12.2007

Authorised Capital :

No. of Shares	Type	Value	Amount
22,30,000	Equity Shares	Rs. 100- Each	Rs. 223.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2,228,153	Equity Shares	Rs. 100/- Each	Rs. 222.815 Millions

Notes

Of the above shares 2,228,152 (2006 - 2,228,152) equity shares are held by Dystar Textilfarben GmbH, Germany.

Dystar Textilfarben GmbH, Germany, is 100% subsidiary of Dystar Holdings GmbH, Germany, the ultimate holding company.

FINANCIAL DATA

[all figures are in Rupees Millions]

Sales Turnover – Rs. 1200.000 Millions (Estimated)

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2007	31.12.2006	31.12.2005
SHAREHOLDERS FUNDS
1] Share Capital		222.815	222.815	222.815
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		49.721	16.227	0.000
4] (Accumulated Losses)		0.000	0.000	(57.193)
NETWORTH		272.536	239.042	165.622
LOAN FUNDS
1] Secured Loans		19.637	0.000	0.000
2] Unsecured Loans		154.184	0.000	0.000
TOTAL BORROWING		173.821	0.000	0.000
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		446.357	239.042	165.622
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		24.679	24.841	11.731
Capital work-in-progress		142.119	12.336	0.000
INVESTMENT		49.999	0.000	0.000
DEFERREX TAX ASSETS		4.156	3.550	2.544
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	107.457	85.304	145.450
	Sundry Debtors	185.220	163.875	135.136
	Cash & Bank Balances	22.762	95.185	110.993
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	176.104	23.275	11.061
Total Current Assets		491.543	367.639	402.640
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	251.016	158.212	239.424
	Provisions	15.123	11.112	11.869
Total Current Liabilities		266.139	169.324	251.293
Net Current Assets		225.404	198.315	151.347
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		446.357	239.042	165.622

PROFIT & LOSS ACCOUNT

PARTICULARS		31.12.2007	31.12.2006
Sales Turnover		673.217	779.781
Other Income		47.489	41.987
Total Income		720.706	821.768
Profit/(Loss) Before Tax		63.391	91.722
Provision for Taxation		29.897	18.302
Profit/(Loss) After Tax		33.494	73.420
Earnings in Foreign Currency :
	Export Earnings	2.587	24.258
Total Earnings		2.587	24.258
Imports :
	Raw Materials	34.728	121.743
Total Imports		34.728	121.743
Expenditures :
	Manufacturing Expenses	26.976	50.467
	Administrative Expenses	86.124	74.664
	Raw Material Consumed	281.736	261.337
	Purchases made for re-sale	187.346	231.627
	Consumption of stores and spares parts	6.958	57.253
	Salaries, Wages, Bonus, etc.	59.543	46.541
	Interest	2.866	2.265
	Depreciation & Amortization	5.766	5.892
	Other Expenditure	0.000	0.000
Total Expenditure		657.315	730.046

KEY RATIOS

PARTICULARS		31.12.2007	31.12.2006	31.12.2005
PAT / Total Income	(%)	4.64	8.93	--
Net Profit Margin (PBT/Sales)	(%)	9.41	11.76	--
Return on Total Assets (PBT/Total Assets}	(%)	12.27	23.36	--
Return on Investment (ROI) (PBT/Networth)		0.23	0.38	--
Debt Equity Ratio (Total Liability/Networth)		1.61	0.70	1.51
Current Ratio (Current Asset/Current Liability)		1.84	2.17	1.60

LOCAL AGENCY FURTHER INFORMATION

The company is in trade terms with :-

Y Advatiya Dye-Chem Limited

Y Basf

Y Dipen Industries

Y Dhanashree Polymers Private Limited

Y Spectra Specialities

Y Siba Limited

Fixed Assets

• Goodwill & Commercial Rights,
• Furniture & Fixtures,
• Office Equipments & Electrical Appliances,
• Computers,
• Plant & Machinery

Operations

The Company has turned out yet another very good year of performance by registering the highest turnover and profitability ever since its inception. This is more remarkable considering that there was a sharp, almost 20%, decline in exports of the textile industry, the end-user of the Company.s products, primarily due to the significant depreciation of United States Dollar. The Company could successfully ward off this negative trend and also aggressive competitors by demonstrating to customers the cost effectiveness of dyeing processes by using their quality products. The Company.s local sales (net of excise duty and allowances) for the year 2007 were Rs. 673 Millions against Rs. 780 Millions for the year 2006. The indent sales, in respect of which the Company acts as an indenting agent, also increased steeply to Rs. 828 Millions for the year 2007 against Rs. 498 Millions for the year 2006, a rise of 66%. The Company.s overall market share increased to 11.28%. The profit for the year 2007, depreciation, amortizations, impairment and interest, was Rs. 72 Millions as compared to Rs. 100 Millions in 2006 After providing a sum of Rs. 30 Millions for taxation (including deferred tax), the net profit carried to the Balance Sheet amounted to Rs. 33 Millions for the year 2007 against a net profit of Rs. 73 Millions for the year 2006.

Acquisition of Texanlab Laboratories Private Limited

The Company made a strategic investment of Rs. 50 million, funded out of its internal accruals, in 20080 equity shares of Rs.100 each in Texanlab Laboratories Private Limited (Texanlab) for a controlling stake of 50.1% Texanlab is largest Indian testing house focused on compliance testing of the textile and leather products to confirm to high quality and ecology requirements of international markets, particularly US and Europe and providing solutions for cost effective processes from raw fibre to the finished product. The investment blends splendidly with DyStar Textile Services, a fee based service successfully launched by the Company in the Indian

market. The Company will use its internal accruals to acquire from the promoters the balance stake over a period of two and half years,

Finance

The Company continued to generate good cash profits. However, for funding the setting-up of its Finishing Plant at Ankleshwar, the Company availed a loan of Euro 2.70 Millions from its holding Company.

Manufacturing facilities

The construction of Company.s manufacturing facility at Ankleshwar, Gujarat was completed as per schedule and commenced commercial production on 15th January 2008.

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.47.39
UK Pound	1	Rs.70.65
Euro	1	Rs.66.33

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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		45

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