MIRA INFORM REPORT

Report Date :

18.11.2008

IDENTIFICATION DETAILS

Name :	CHEMTROLS ENGINEERING LIMITED
Formerly Known As :	CHEMTROLS INDUSTRIES LIMITED
Registered Office :	910, Tulsiani Chambers, 212, Nariman Point, Mumbai 400021, Maharashtra
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	08.07.1981
Com. Reg. No.:	11-24757
CIN No.: [Company Identification No.]	U29299MH1981PLC024757
TAN No.: [Tax Deduction & Collection Account No.]	MUMC10185A
PAN No.: [Permanent Account No.]	AAACC2870R
Legal Form :	Subject is a closely held Public Limited Liability Company
Line of Business :	Manufacturer of Level Instruments, Analyzer and Valves for Chemical Industry.

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 1200000
Status :	Good
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	On three attempts, Mr. Radhakrishnan gave promises to provide financial details in next week. If he provides, we shall supplement the report. Subject is a well established and reputed company having satisfactory track. Trade relations are fair. Financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office/Factory :	910, Tulsiani Chambers, 212, Nariman Point, Mumbai 400021, Maharashtra, India
Tel. No.:	91-22-22873573 / 22830636
Fax No.:	91-22-22873573
E-Mail :	chemtrolsfa@mtnl.net.in
Website :	www.chemtrols.com

DIRECTORS

Name :	Mr. Rakesh Kumar Gupta
Designation :	Director
Address :	104, A Lila Apartments, Yari Road, Versova, Mumbai 400061, Maharashtra, India
Date of Birth/Age :	04.06.1953
Date of Appointment :	01.10.2008
Name :	Mr. Kalath Nandkumar
Designation :	Director
Address :	202, Mangal Darshan, Turner Road, Bandra [West], Mumbai 400050, Maharashtra, India
Date of Birth/Age :	02.11.1948
Date of Appointment :	08.07.1981
Name :	Mr. Sambhaji Amrut Rao Nikam
Designation :	Director
Address :	Eden – 1, 201, Hiranandani Gardens, Powai, Mumbai 400076, Maharashtra, India
Date of Birth/Age :	15.03.1954
Date of Appointment :	08.07.1981
Name :	Mrs. Usha Nandakumar
Designation :	Director
Address :	202, Mangal Darshan, Turner Road, Bandra [West], Mumbai 400050, Maharashtra, India

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

[As on 23.09.2008]

Names of Shareholders	No. of Shares
Kalath Nandkumar	2985024
S. A. Nikam	746176
Usha Nandakumar	1264672
K. Rajagopal	305712
Chemtrols Holdings Private Limited	23047072
K. Venugopal	20592
K. Ramanathan	26770
Chandrika Venugopal	20592
Shailaja Viswanathan	20592
Nalini Rajagopal	20592
K. Vishwanathan	20592
Smitha Rajagopal	11088
Sudha Ramanathan	26769
K. Arvindakshan	6864
R. R. Nair	2112
R. Radhakrishnan	158400
Sreelatha Nair	20592
Karthika Nandakumar	37770
Kumari Unnkrishnan	16707
Total	28758688
Equity Share Breakup [As on 31.03.2008]	Percentage of Holding
Bodies Corporate	80.19
Directors or relatives of the Directors	18.34
Other top fifty shareholders	1.47
Total	100

BUSINESS DETAILS

Line of Business :

Manufacturer of Level Instruments, Analyzer and Valves for Chemical Industry.

Products :

ITC Code	Product Description
Level Instrument	90261000
Analyzer	90271000
Valves	84818000

GENERAL INFORMATION

No. of Employees :

1500

Bankers :

Central Bank of India

Chandermukhi, Ground Floor, Nariman Point, Mumbai 400021, Maharashtra, India

Facilities :

SECURED LOANS	As on 31.03.2008 [Rs. In Millions]
Loans and advances from bank :
Cash Credit	220.340
Bills Discounted	87.810
Other loans and advances	7.696
Total	315.846

Notes:

1. Working capital facilities from banks aggregating to Rs. 308.150 Millions are secured by way of hypothecation of stocks of raw materials, finished and semi finished goods, stores and spares, packing material, book debts [not exceeding 90 days] and other current assets [both present and future] as well as by way of first charge on entire block of fixed assets of the company, both present and future, alongwith personal guarantee of all the Directors of the company and the Holding Company and pledge of shareholding of promoters and their relatives.

2. Other loans comprises of Motor Vehicle loans from various banks and financial institutions Rs. 7.696 are secured by exclusive first charge by way of hypothecation of the specified assets acquired out of such loans.

UNSECURED LOANS	As on 31.03.2008 [Rs. In Millions]
Fixed Deposits from Directors	0.199
Fixed Deposits from others	5.317
Total	5.516

Banking Relations :	Satisfactory
Auditors :
Name :	S. Raghunath and Company Chartered Accountants
Address :	3/8, Surya Niwas, Colony Road, Sion [West], Mumbai 400022, Maharashtra, India
Holding Company:	Chemtrols Holding Private Limited

CAPITAL STRUCTURE

[As on 31.03.2008]

Authorised Capital :

No. of Shares	Type	Value	Amount
40000000	Equity Shares	Rs. 5/- each	Rs. 200.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
28758688	Equity Shares	Rs. 5/- each	Rs. 143.793 Millions

Of the above shares

[210009 equity shares of Rs. 100/- each fully paid-up, sub divided into 4200180 equity shares of Rs. 5/- each fully paid up by ordinary resolution passed at extra ordinary general meeting of the member, held on 26.03.2004.]

[21679548 equity shares of Rs. 5/- each are allotted as fully paid up bonus shares by way of capitalization of Reserves and accumulated Profits]

Of the above 23047072 equity shares of Rs. 5/- each fully paid up are held by Chemtrols Holdings Private Limited.

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		143.793	81.713	21.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		112.376	146.483	195.194
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		256.169	228.196	216.194
LOAN FUNDS
1] Secured Loans		315.846	178.407	132.696
2] Unsecured Loans		5.516	5.309	6.518
TOTAL BORROWING		321.362	183.716	139.214
DEFERRED TAX LIABILITIES		1.433	1.903	1.339
TOTAL		578.964	413.815	356.747
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		153.808	115.856	113.101
Capital work-in-progress		11.750	23.041	14.029
INVESTMENT		0.339	12.151	12.205
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	238.653	152.446	94.660
	Sundry Debtors	560.968	293.729	211.957
	Cash & Bank Balances	88.340	32.830	28.199
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	127.485	65.766	54.045
Total Current Assets		1015.446	544.771	388.861
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	510.431	244.407	148.583
	Provisions	91.948	37.597	22.866
Total Current Liabilities		602.379	282.004	171.449
Net Current Assets		413.067	262.767	217.412
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		578.964	413.815	356.747

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		1528.279	785.096	659.143
Other Income		19.361	18.993	11.535
Total Income		1547.640	804.089	696.967
Profit/(Loss) Before Tax		81.131	39.162	29.838
Provision for Taxation		31.682	14.524	7.848
Profit/(Loss) After Tax		49.449	24.638	21.990
Expenditures :
	Raw Material Consumed	939.195	433.775	267.657
	Consumption of stores and spares parts	7.772	6.037	5.197
	Increase/(Decrease) in Finished Goods	[1.878]	[36.798]	26.849
	Salaries, Wages, Bonus, etc.	130.852	94.704	62.826
	Managerial Remuneration	4.858	2.980	1.926
	Payment to Auditors	0.230	0.230	0.155
	Interest	24.511	14.492	13.684
	Insurance Expenses	10.437	7.616	4.726
	Power & Fuel	5.309	3.799	3.297
	Depreciation & Amortization	13.682	10.459	11.016
	Other Expenditure	331.541	227.633	269.796
Total Expenditure		1466.509	764.927	667.129

KEY RATIOS

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
PAT / Total Income	(%)	3.19	3.07	3.16
Net Profit Margin (PBT/Sales)	(%)	5.30	4.98	4.53
Return on Total Assets (PBT/Total Assets}	(%)	6.94	5.93	5.94
Return on Investment (ROI) (PBT/Networth)		0.32	0.17	0.14
Debt Equity Ratio (Total Liability/Networth)		3.61	2.04	1.43
Current Ratio (Current Asset/Current Liability)		1.68	1.94	2.27

LOCAL AGENCY FURTHER INFORMATION

Financial Review

The Company’s Total Income for the year ended 31.03.2008 increased to Rs. 1549.500 Millions compared to Rs. 840.900 Millions in the previous year registering the growth of 84.27 percent. Operating profit increased by 86.12 percent to Rs. 119.300 Millions during the year up from Rs. 64.100 Millions in the previous year.

OPERATIONAL HIGHLIGHTS

The company has executed many prestigious projects orders and lump sum Turnkey Contracts during the year under review to name a few:

Reliance Petroleum Limited – Jamnagar Export Refinery	Analyzer Systems and Closed Sampling Systems
National Thermal Power Corporation Limited	Ambient Air Quality Monitoring systems at 20 plants
Surat Municipal Corporation	Power generation from Biogas 3 projects
Indian Oil Corporation Limited Panipat Refinery	On line analyzer system for Diesel Blending
Larsen and Toubro Limited	Stack Analyser System for IOCL Panipat Refinery
Hindustan Petroleum Corporation Limited - Visakhapatanam	Product Quality Analyser System

Fixed Assets

· Freehold land

· Factory building

· Leasehold land

· Residential flats

· Office premises

· Computers

· Furniture and Fittings

· Electrical Installation

· Office Equipments

· Motor Vehicle

Form 8

This form is for	Modification of charge
Charge identification number of the modified	90153709
Corporate identity number of the company	U29299MH1981PLC024757
Name of the company	CHEMTROLS INDUSTRIES LIMITED
Address of the registered office or of the principal place of business in India of the company	910, Tulsiani Chambers, 212, Nariman Point, Mumbai 400021, Maharashtra, India
Type of charge	Book Debts Movable Property
Particular of charge holder	Central Bank of India Nariman Point Branch, Chander Mukhi, Ground Floor, Nariman Point, Mumbai 400021, Maharashtra, India E-mail: aborase@gmail.com
Nature of description of the instrument creating or modifying the charge	Composite hypothecation deed dated 23.07.2008 Term loan agreement dated 23.07.2008 General counter Guarantee and Indemnity Covering Several Guarantees within the sanctioned guarantee limit dated 23.07.2008. Comprehensive pre and post shipment agreement dated 23.07.2008
Date of instrument Creating the charge	23.07.2008
Amount secured by the charge	Rs. 121.950 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest Working Capital Facility BPLR 0.5% at present i.e. 12.5% payable monthly Term loan BPLR + 1% at present i.e. 14% payable monthly. Terms of Repayment Working Capital facilities on demand Term loan 20 Quarterly installment after moratorium of 2 quarters Margin Cash credit 25% and 50% for book debts Others 10% Term loan 38.75% Extent and Operation of the charge The facilities are secured by hypothecation of stocks, book debts, all movable machineries plants pari passu basis with HDFC Bank Limited
Short particulars of the property charged	All the movable machinery, plant present and future stocks, book debts, outstanding monies receivable, claims, bills contracts, engagements and securities
Date of latest modification prior to the present modification	05.04.2007

AS PER WEBSITE DETAILS

PROFILE

Subject was founded by renowned technocrat Mr. K. Nandakumar in 1975. Beginning with manufacturing of level instruments and instrument fittings for the process industries, the Company grew rapidly and diversified into manufacturing and supply of wide range of process instruments, process monitoring, control and automation systems over the past 30 years. Today subject is a leading solution provider in analytical systems, process instruments, environment monitoring, fire and gas detection, terminal automation, flow metering & custody transfer, SCADA and automation systems. Subject has supplied instrumentation and process control systems to almost all Chemical and Hydrocarbon Processing Industries in India. Chemtrols’ SCADA and RTU systems cater to a number of Utilities in India. Overseas reference cover Asia Pacific, Middle East, Europe, USA and Canada.

A technology driven company, Subject is managed by qualified professionals. Subject specializes in execution of small to large turnkey projects from design, engineering to procurement, manufacturing, testing, installation, commissioning and servicing backed by strong project management skills.

Subject provides latest state-of-the-art products and solutions in partnerships with renowned overseas companies for various industries that include Oil and Gas, Refineries, Petrochemicals, Chemicals, Fertilizers, Electricity, Iron & Steel, Cement, Water, Renewable Energy and Transportation.

Subject has a documented Quality Management System that meets the requirement of ISO 9001:2000 QMS Standard.

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. 48.99
UK Pound	1	Rs. 72.14
Euro	1	Rs. 61.57

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	6
--PROFITABILIRY	1~10	6
--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	NO
--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, 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