MIRA INFORM REPORT

Report Date :

17.06.2008

IDENTIFICATION DETAILS

Name :	SAMRAT PHARMACHEM LIMITED
Registered Office :	Plot No. A2/3445, GIDC, Phase – 4, Ankleshwar - 393002, Gujarat
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	16.06.1992
Com. Reg. No.:	17820
CIN No.: [Company Identification No.]	U24230GJ1992PLC017820
TAN No.: [Tax Deduction & Collection Account No.]	MUMS42633D
PAN No.: [Permanent Account No.]	AAECS0806M
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on Stock Exchanges.
Line of Business :	Manufacturers, Importer and Exporters of Pharmaceutical 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 264550
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company meeting its normal commitments timeously. Trade relations are fair. Business is active. The company can be considered good for normal business dealings.

INFORMATION PARTED BY

Name :	Mr. Rajesh Mehta
Designation :	Director
Contact No.:	91-9321002222
Date :	04.06.2008

LOCATIONS

Registered Office / Factory :	Plot No. A2/3445, GIDC, Phase – 4, Ankleshwar - 393002, Gujarat, India
Tel. No.:	91-2646-220774
Fax No.:	91-2646-251291
E-Mail :	samrat@bom4.vsnl.net.in
Website :	http://www.samratpharmachem.com
Area :	3645 Sq. mtr
Location :	Leased
Corporate Office :	A/7, Sai Prasad, 2^nd Floor, Teli Gali Cross Lane, Andheri (East), Mumbai – 400 069, Maharashtra, India
Tel. No.:	91-22-26841707/40, 26833756
Mobile No.:	91-9322263289/ 9321002222
Fax No.:	91-22-26843745
Area :	500 Sq.ft.
Location :	Leased

DIRECTORS

Name :	Mr. Lalit Mehta
Designation :	Chairman and Managing Director
Address :	B – 74, Roop Darshan, Juhu Lane, Andheri (West), Mumbai – 400058, Maharashtra, India
Date of Birth/Age :	71 Years
Qualification :	BSC, LLB
Experience :	46 Years
Name :	Mr. Rajesh Mehta
Designation :	Executive Director
Address :	B – 74, Roop Darshan, Juhu Lane, Andheri (West), Mumbai – 400058, Maharashtra, India
Date of Birth/Age :	44 Years
Qualification :	B.Com, ACA
Experience :	19 Years
Name :	Mr. Mahendra Pipalia
Designation :	Director
Qualification :	B.Com, ACA
Name :	Mr. Samir Kothari
Designation :	Director
Qualification :	BSC, DBM
Name :	Mr. Hitendra Shah
Designation :	Director
Qualification :	B.Com

KEY EXECUTIVES

Name :	Mr. A A Mulla and Associates
Designation :	Consulting Company Secretary
Address :	D – 201, Trade Corner, Saki Naka Junction, Andheri (East), Mumbai – 400072, Maharashtra, India

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2007

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group 2
(1) Indian
Individuals/ Hindu Undivided Family	1210900	39.19
Sub Total (A) (1)	1210900	39.19
(B) Public Shareholding 3
(1) Institutions
Foreign Institutional Investors	100000	3.24
Sub Total (B) (1)	100000	3.24
(2) Non-Institutions
Bodies Corporate	97231	3.15
Individual shareholders holding nominal share capital up to Rs. 0.100 million	1437143	46.51
Individual shareholders holding nominal shares capital in excess of Rs. 0.100 million	160726	5.20
(C) Any Other (specify)
NRIs (Repat)	83700	2.71
Sub Total (B) (2)	1778800	57.57
Total Public shareholding (B) = (B) (1) + (B) (2)	1878800	60.81
Total (A) + (B)	3089700	100.00

BUSINESS DETAILS

Line of Business :

Manufacturers, Importer and Exporters of Pharmaceutical Chemicals.

Products :

v Calcium Iodate Monohydrate

v Cop[per Iodide

v Hydriodic Acid 47%

v Hydriodic Acid 57%

v Iodine

v Iodine Monochloride

v Iodoethane (Ethyl Iodide)

v Iodomethane (Methyl Iodide)

v Potassium Bromide

v Potassium Iodate

v Potassium Iodide

v Potassium Metaperiodate

v Sodium Iopdate

v Trimethyl Sulfoxoniumiodide

Item Code	Product Description
282760.10	Potassium Iodide
282760.20	Sodium Iodide
280120.00	Iodine

Exports :

Products :

Iodine Derivatives

Countries :

v Asia

v Europe

v America

Imports :

Products :

Iodine Crude

Countries :

Japan

Turkmenistan

Chile

Terms :

Selling :

L/C (150 – 180 days)

Purchasing :

L/C and at Sight

PRODUCTION STATUS

Particulars	Unit	Installed Capacity		Actual Production
		31.03.2007	31.03.2006	31.03.2007	31.03.2006
Pharmaceutical Chemicals	MT	415.20	528.00	286.67	276.11

GENERAL INFORMATION

Customers :

End Users

No. of Employees :

Total :29 (Office : 11, Factory: 18)

Bankers :

ICICI Bank Limited

Sagar Avenue, S V Road, Andheri (West), Mumbai – 400 058, Maharashtra, India

HDFC Bank Limited

Jamuna Apartments, S V Road, Andheri (West), Mumbai – 400 078, Maharashtra, India

Facilities :

Secured Loans

	31.03.2007 (Rs. in millions)	31.03.2006 (Rs. in millions)
Cash Credit from Schedule Bank (Secured against fixed assets, stocks, book debts and personal guarantee of executive directors)	11.394	5.223
Total	11.394	5.223

Banking Relations :	Satisfactory
Auditors :
Name :	Nalin S. Parekh and Company Chartered Accountants
Address :	302, Madhav Apartments, Jawahar Road, Opp. Ghatkopar Station (East), Mumbai – 400 077, Maharashtra, India

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
5,000,000	Equity Shares	Rs. 10/- each	Rs. 50.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
3,089,700	Equity Shares	Rs. 10/- each	Rs. 30.897 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		30.897	30.897	30.897
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		22.013	18.997	17.087
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		52.910	49.894	47.984
LOAN FUNDS
1] Secured Loans		11.394	5.223	4.479
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		11.394	5.223	4.479
DEFERRED TAX LIABILITIES		1.401	1.396	1.281
TOTAL		65.705	56.513	53.744
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		12.580	11.421	10.121
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.020	0.520
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	16.397	14.935	5.691
	Sundry Debtors	55.107	51.559	52.326
	Cash & Bank Balances	24.057	7.502	13.589
	Other Current Assets	6.605	0.254	2.051
	Loans & Advances	0.994	1.231	0.815
Total Current Assets		103.160	75.481	74.472
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	50.036	30.410	31.370
	Provisions	0.000	0.000	0.000
Total Current Liabilities		50.036	30.410	31.370
Net Current Assets		53.124	45.071	43.102
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		65.705	56.513	53.744

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		316.502	262.063	204.064
Other Income		0.017	(0.694)	1.324
Total Income		316.519	261.369	205.388
Profit/(Loss) Before Tax		5.046	3.018	7.011
Provision for Taxation		2.023	1.109	2.700
Profit/(Loss) After Tax		3.023	1.909	4.311
Earnings in Foreign Currency :
	Export Earnings	6.663	0.853	NA
Total Earnings		6.663	0.853	NA
Expenditures :
	Manufacturing Expenses	286.663	243.254	179.953
	Administrative Expenses	4.497	3.586	3.062
	Selling Expenses	13.803	11.572	10.062
	Increase/(Decrease) in Finished Goods	0.254	(5.703)	1.547
	Salaries, Wages, Bonus, etc.	3.255	2.875	2.940
	Interest	2.104	2.115	(0.029)
	Depreciation & Amortization	0.792	0.650	0.579
	Other Expenditure	0.105	0.002	0.023
Total Expenditure		311.473	258.351	198.377

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2007	30.09.2007	31.12.2007
Type	(1^st Quarter)	(2^nd Quarter)	(3^rd Quarter)
Sales Turnover	80.500	94.400	78.700
Other Income	0.000	0.000	0.000
Total Income	80.500	94.400	78.700
Total Expenditure	76.000	87.200	73.600
Operating Profit	4.500	7.200	5.100
Interest	(0.100)	0.200	0.800
Gross Profit	4.600	7.000	4.300
Depreciation	0.200	0.200	0.300
Tax	1.200	2.100	1.300
Reported PAT	3.200	4.700	2.700

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt Equity Ratio	0.16	0.10	0.12
Long Term Debt Equity Ratio	0.00	0.00	0.00
Current Ratio	1.79	2.02	2.01
TURNOVER RATIOS
Fixed Assets	18.73	17.53	15.01
Inventory	20.22	25.45	24.59
Debtors	5.93	5.05	4.62
Interest Cover Ratio	3.08	2.43	0.00
Operating Profit Margin (%)	2.59	2.21	3.72
Profit Before Interest and Tax Margin(%)	2.34	1.95	3.43
Cash Profit Margin(%)	1.20	0.99	2.40
Adjusted Net Profit Margin(%)	0.95	0.72	2.11
Return on Capital Employed(%)	12.40	9.48	13.71
Return On Net Worth(%)	5.84	3.88	9.38

LOCAL AGENCY FURTHER INFORMATION

Unaudited Financial Results for Quarter ended 31.12.2007

PARTICULARS	Quarter Ended 31.12.2007 (Unaudited)	Year to date ended 31.12.2007 (Unaudited)
Net Income from Sales / Services	78.699	253.641
Total Income	78.699	253.641
Expenditure
(Increase)/Decrease on Stock in trade and WIP	(6.149)	(5.114)
Consumption of raw materials	60.341	184.954
Employees Costs	1.052	2.859
Depreciation	0.274	0.730
Other Expenditure
(i) Manufacturing Expenses	14.154	41.416
(ii) Administration Expenses	1.311	3.719
(iii) Selling and Distribution Expenses	2.868	9.040
Total	73.851	237.604
Interest	0.836	0.942
Profit / ( Loss) from ordinary activities before tax	4.012	15.095
Tax Expenses	1.320	4.560
Net Profit / (Loss) from ordinary activities after tax	2.692	10.535
Net Profit / (Loss) for the period	2.692	10.535
Paid-up Equity Share Capital (Face Value Rs. 10)	30.897	30.897
Earning Per Share
a) Basic and diluted EPS before extra-ordinary items for the period, year to date, previous year	0.087	0.341
b) Basic and diluted EPS before extra-ordinary items for the period, year to date, previous year	0.087	0.341
Public Shareholding
Number of shares		1844118
Percentage of shareholding		59.69

Note:

1. The above results were reviewed by the audit committee of the board of directors.

2. The statutory auditors have carried out a limited review of the results for the quarted ended 31.12.2007

3. The above results have been taken on record by the board of directors at it meeting held on Thursday, 31.01.2008 at the corporate office of the company.

4. Information on investor complaints pursuant to clause 41 of the listing agreement for the quarter ended 31.12.2007

Director’s Report

OPERATIONS: 

The Company has performed reasonably well during the year. In a highly competitive and uncertain business environment, the Company achieved a turnover of Rs. 316.502 millions as against Rs. 262.063 millions achieved last year - an increase of more than 21%. Production of 286.673 tonnes of pharmaceutical chemicals was achieved during the year. 

EXPORTS: 

During the year 2006-2007 the company's export division registered sales of Rs. 26.211 millions up from Rs. 4.892 millions last year. The Company has initiated several export promotion measures to increase exports. The products of the Company have been well accepted in the international market and the Company expects better export turnover in the next year. 

INSURANCE: 

The assets of the company have been adequately insured against all possible risks with ICICI Lombard General Insurance Company Limited and with ECGC Limited. 

MANAGEMENT DISCUSSION AND ANALYSIS: 

INDUSTRY STRUCTURE AND DEVELOPMENTS: 

The Company is a producer of pharmaceutical chemicals. The intermediates produced are used in pharmaceutical and chemical industries. The Company is amongst the manufacturers who produce for local and international needs of the pharmaceuticals and chemicals industry. The pharmaceutical and chemical industry is growing at a pace of 15% to 20% every year. This results into growth of the support or intermediate industry like us.

The globalization and liberalization measures taken by the government will have effect on the pharmaceutical and chemical industry. Indian industry must spend huge money in the research and development. However the GATT agreement coming into operation will not have any effect on the pharmaceutical and chemical produced by the company. 

 OPPORTUNITIES AND THREATS: 

The company looks forward optimistically for all round growth in turnover and profitability in the ensuing years. The company has taken effective steps to realize the dream performance in the years to come. The company intends to double its turnover in a short period of time. The company has taken effective measures to improve quality of products and its productivity to outwit competitor from domestic and international market. 

The profit margin has come down drastically over the years and unless the quantitative volume of sales is increased it would be difficult to achieve the target of profitability set by the directors. The company should also plan to widen the product range by increasing the basket of products thereby enlarging the customer and sales base. 

PRODUCT PERFORMANCE: 

The company has two plants producing varied items. The basic purpose of producing in two different plants is to improve efficiency and manageability. The Company shall achieve sustainable growth in both plants by modernization and automation of operations. According to the Directors, these plants facilitate better division of labour, enable us to develop expertise in each plant and their respective items, and hence improve productivity and profitability of the Company. 

OUTLOOK:

The pharmaceutical industry produces commodities essential to life. The growth and development of the pharmaceutical companies are generally assured. The industry grows at least 15% to 20% every year. The outlook is expected to be better in the current financial year 2007-2008. 

RISKS AND CONCERNS: 

Currency Risk : The year 2006-07 saw a lot of volatility on the currency exchange front. Imports constitute a major portion of the business activity. The company does selective hedging from time to time. However it is difficult to fully contain such adverse fluctuations, the management shall continue to take remedial steps to reduce its severity from time to time. 

Competition Risk: They feel that the major business risks are the stiff competition due to low priced products from countries like China and also from domestic manufacturers for certain products. However the company is trying to expand its range of products to cater to different segment of customers and market in order to absorb fall in sales and margins. 

Credit Risk : They have been able to reduce the irrecoverable amounts to a very negligible level, notwithstanding the inevitability of having some debts which are not recoverable. Due to strict monitoring and disciplined distribution channels, they do not foresee any material risk on this count. The company also insures its export credit risks with ECGC Limited. 

Dead Stocks/Slow moving items/Rejections Risk: Sometimes the quality of finished product becomes bad or is rejected by a customer. The Company has taken every step in the raw material procurement stage, production stage, packing stage, testing stage and delivery stage to minimize the risk of rejection. If due to some unforeseen reasons the goods are rejected or are not as per the in-house standards, the company has made a system to reprocess all such failed material. Minimum cost is incurred to make them into acceptable standards again. Further the products that have irregular demand or are sold in lesser quantities round the year are manufactured as per customers order only. Thus the company is successful in handling dead stocks, slow moving items and rejections. 

Fire, Theft & Explosion Risk : The Company has been quite conscious of the inherent risk in the business. A lot of measures to safeguard the fixed assets and stocks in the factory are taken. The management has been regularly updating the risk profile and take necessary corrective steps like educating workers, insisting workers to wear gum boots, gloves, eye goggles, helmets etc, installing fire fighting equipments, putting sign boards, banning smoking in the premises, keeping hazardous materials in a safe and protected place etc. Apart from these measures, the company has also underwritten the various risks like fire, theft & burglary, earthquake, floods, riots, sale/purchase in transit etc with ICICI Lombard General Insurance Co Ltd for appropriate values. 

MATERIAL DEVELOPMENT IN HUMAN RESOURCES/ INDUSTRIAL RELATIONS FRONTS: 

The industrial relations have been satisfactory in the Registered Office Cum Factory and at the Corporate Office. There was no loss of man-days during the year. A lot of initiatives have been undertaken by the Human Resource Department during the year. Apart from improvement in the system to align the compensation to the performance of the employees, steps are being taken by the management to provide training both in-house and at recognized institutes to enhance the effectiveness of the employees. Steps are also being taken to focus on managerial and behavioral competence across the organization. Information Technology has been a focused area for improving the operational efficiency and as a tool for decision-making. 

Contingent Liabilities

In respect of Letters of credit issued by the company’s Bankers: Rs. 40.872 millions (Previous year Rs. 42.320 millions)

Fixed Assets

v Land

v Building

v Plant and Machinery

v Office Plant and Equipment

v Furniture and Fixtures

v Vehicles

As Per Website Details

Profile

Subject was incorporated on 16th June, 1992, at Ankleshwar in Gujarat State of India. It was promoted by Mr. Lalit Mehta & Mr. Rajesh Mehta The Company is currently manufacturing Iodine salts & Bromine salts. The finished products produced by the Company are used in various industries like Pharmaceuticals, Chemicals, Food, Fertilizer, Salt etc. The products of the Company are well received in Indian & Foreign markets. The company is a public limited company & its shares are listed & traded on Bombay Stock Exchange & other bourses of India. The company is presently employing 30 people for its operations at Ankleshwar & Mumbai.

Customers

Subject has a major chunk of the business in Iodine & Bromine Salts. The company's customers include several multinational companies in India & Abroad. The company is exporting a part of its products to USA, Europe, Japan etc.

Since inception, subject has retained & added to its list of customers due to its fair & human policies which ensure Zero attrition rate of customers. The company is conscious of its responsibility towards customers who have entrusted us as a dependable single source due to the prompt & timely deliveries, quality products & economical pricing.

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 :

The 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.

The 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. 42.92
UK Pound	1	Rs. 84.48
Euro	1	Rs. 66.66

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	YES
--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.	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, they 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