MIRA INFORM REPORT

Report Date :

10.09.2008

IDENTIFICATION DETAILS

Name :	SARAF CHEMICALS LIMITED
Registered Office :	201, Kakad Chambers, 132, Dr. A B Road, Worli, Mumbai - 400 018, Maharashtra.
Country :	India
Financials (as on) :	31.03.3007
Date of Incorporation :	20.07.1984
Com. Reg. No.:	11-33486
CIN No.: [Company Identification No.]	U24100MH1984PLC033486
TAN No.: (Tax Deduction & Collection Account No.)	MUMS35311D/ MUMS35312E
PAN No.: (Permanent Account No.)	AABCS8425M
Legal Form :	A closely held public limited liability company.
Line of Business :	Manufacturer of Dyestuff, Textile, Fine and Pharma 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 508310
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a leading player in dyes and chemicals. The company is controlled, financed and managed by Saraf family who are respectable, experienced and resourceful businessmen. Their trade relations are reported as fair. Financial position is satisfactory. Payments are correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

INFORMATION PARTED BY

Name :	Mr. Rupesh Javeri
Designation :	Accounts Manager
Date :	09.09.2008

LOCATIONS

Registered Office/ Corporate Office :	201, Kakad Chambers, 2^nd Floor, 132, Dr. Annie Besant Road, Worli, Mumbai - 400 018, Maharashtra, INDIA
Tel. No.:	91-22-24933818 / 6041 / 5482
Fax No.:	91-22-24938868 / 24964301
E-Mail :	sarex@vsnl.com sales@saraf.global.net.in
Website :	http://www.saraf.co.in http://www.sarex.com http://www.sarafdyechem.com
Area :	6500 sq ft
Location :	Rented
Factory 1 :	Plot N-131, MIDC, Boisar Navapur Road, Kumbhavali Naka, Tarapur - 401 506, Maharashtra
Tel. No.:	91-2525-271616 / 272131
Fax No.:	91-2525-271414
Factory 2 :	L-92, MIDC, Tarapur - 401 506, Maharashtra
Tel. No.:	91-2525-2571642/ 2571376
Factory 3 :	Plot No. 232, MIDC, Tarapur – 401506, District – Thane
Factory 4 :	Plot No. N 129/ 312, Tarapur, Bhaisar
Tel No.:	91-2525- 271616

DIRECTORS

Name :	Mr. Mahavir Prasad G. Saraf
Designation :	Chairman and Managing Director
Address:	“Kiran” Plot No. 12, N S Road – 8, J V P D Scheme, Mumbai - 400049
Date of Birth/Age :	26^th September, 1933
Qualification :	S.S.C.
Date of Appointment :	20^th July, 1984
Name :	Mr. Ashok M. Saraf
Designation :	Executive Director
Address:	“Kiran” Plot No. 12, N S Road – 8, J V P D Scheme, Mumbai - 400049
Date of Birth/Age :	18^th March, 1956
Qualification :	B.Com., DFM, DBM (IMC)
Date of Appointment :	20^th July, 1984
Name :	Dr. Naresh M. Saraf
Designation :	Director (Tech & Sales)
Address:	“Kiran” Plot No. 12, N S Road – 8, J V P D Scheme, Mumbai - 400049
Date of Birth/Age :	11^th June, 1957
Qualification :	Ph.D.
Date of Appointment :	31^st December, 1984
Name :	Mr. Prakash M. Saraf
Designation :	Director (Sales)
Address:	“Kiran” Plot No. 12, N S Road – 8, J V P D Scheme, Mumbai - 400049
Date of Birth/Age :	17^th September, 1962
Qualification :	B.Sc.
Date of Appointment :	31^st December, 1984
Name :	Prof. Dr. Mangesh D Teli
Designation :	Director
Address :	Flat No. 16, New building UDCT Staff, Quarter, Matunga, Mumbai- 59
Date of Appointment :	16/05/2003
Name :	Mr. Naresh S. Salgiya
Designation :	Director
Address:	Bldg. No.16, Flat No.201, Saibaba Nagar, Boisar – 401501, Maharashtra, India
Date of Birth/Age :	09.12.1957
Date of Appointment :	06.11.2007
Name :	Mr. Ramesh N. Kudva
Designation :	Director
Address:	102, Kamta Prasad, Rambug Lane No.4, Chikanghar, Kalyan (West), Kalyan – 421301, Maharashtra, India

KEY EXECUTIVES

Name :	Mr. Deepak V. Alat
Designation :	Vice President (Business Development)
Name :	Mr. Samuel S. Jadhav
Designation :	General Manager (Sales)
Name :	Dr. Arvind K. Manian
Designation :	Group Leader (R & D)
Name :	Mr. Easwar G. Iyer
Designation :	General Manager (Finance)
Name :	Mr. Ashwin P. Shah
Designation :	Manager (Quality Control)
Name :	Mrs. K. P. Mistry
Designation :	Administrative Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.03.2007

Names of Shareholders	No. of Shares
Mr. Mahavirprasad G Saraf	180000
Mrs. Kiran M Saraf	720000
Mr. Ashok M Saraf	346700
Mr. Ashok M Saraf	300000
Mr. Ashok M Saraf	125000
Mr. Naresh M Saraf	180000
Mr. Naresh M Saraf	225000
Mr. Naresh M Saraf	90000
Mrs. Shilpa P Saraf	124000
Mr. Naresh M Saraf	229150
Mr. Prakash M Saraf	180000
Mr. Prakash M Saraf	416650
Mrs. Neera A Saraf	185000
Mrs. Renu N Saraf	235000
Mr. Prakash M Saraf	232500
Mr. Ashok M Saraf (HUF)	365000
Mr. Naresh M Saraf (HUF)	218500
Mr. Prakash M Saraf (HUF)	141000
Mr. Prakash M Saraf	9000
M/s. Niharika Trust	76000
M/s. Aashna Trust	167000
Mr. Ashok M Saraf	45000
Mr. Naresh M Saraf	45000
Mrs. Renu N Saraf	68000
Mr. Prakash M Saraf	45000
M/s. Yash Trust	51500
Total	5000000

AS ON 26.07.2007

Equity Share Breakup	Percentage of Holding
Category
Directors or relatives of directors	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Dyestuff, Textile, Fine and Pharma Chemicals.

Products :

Item Code No.	Product Description
3204 & 3809	Synthetic Organic Colouring Matter, Finishing Agents

Exports :

Countries :

50% of its' production to Thailand, USA, UK, Indonesia, Sri Lanka, Nigeria and also to the Middle-East

Terms :

Selling :

L/C and Credit (30 Days)

Purchasing :

L/C and Credit (60 Days)

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Chemicals (Processed)	Kgs.	36,00,000	21,02,917
Dyes	Kgs.	12,00,000	5,50,900

GENERAL INFORMATION

Customers :

· Arvind Mills Limited

· Aldrich

· Ashima Limited

· Bhilwara Spinners Limited

· Biocon India Limited

· Bombay Dyeing & Manufacturing Company Limited

· Camlin Limited

· Century Textiles & Industries Limited

· Coats Viyella India Limited

· Grasim Group of Industries

· J.C.T. Mills Limited

· L. N. J. Group of Mills

· Mafatlal Group

· Morarjee Mills

· Oswal

· Premier Mills

· Raymond Limited

· Reid & Taylor

· Reliance Industries Limited

· RPG Life Sciences Limited

· Siyaram Group

· Syngene International Private Limited

· Vera Laboratories Limited

· Welspun Terry Towels

No. of Employees :

200 (Office – 80, Factory - 120)

Bankers :

· Indian Overseas Bank, Mumbai Worli Branch, Kakad Chamber 132, A B Road, Worli Mumbai – 400018

· Central Bank of India, Mumbai

· Union Bank of India, Mumbai

· ICICI Bank Limited, Landmark Race Course Circle, Alkapuri, Baroda – 390015, Gujarat, India

· Standard Chartered Bank

Facilities :

Secured Loan	(Rs in millions)
Term Loans	8.634
From Indian Overseas Bank	42.000
Cash Credit, Bills Discounting and packing Credit Accounts with a Bank	33.086
Vehicle Loan	1.739
CC Limit (Indian Overseas Bank)	460.000
Total	545.459

Banking Relations :	Satisfactory
Auditors :	C. C. Chokshi & Company Chartered Accountants
Address :	12, Dr, Annie Besant Road, Opp. Shiv Sagar Estate, Worli, Mumbai – 400018, India
Tel. No.:	91-22-56679000
Mobile No.:	91-22-56679025
Associates/Subsidiaries :	˜ Sarex Overseas -Subject was established in the year 1988. It offers a wide range of disperse dyes, reactive dyes and specialty chemicals. ˜ Sarex International ˜ Supertex

CAPITAL STRUCTURE

AS ON 26.07.2007

Authorised Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares	Rs. 10/- each	Rs. 50.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares	Rs. 10/- each	Rs. 50.000 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		50.000	45.000	45.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		51.662	33.480	25.376
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		101.662	78.480	70.376
LOAN FUNDS
1] Secured Loans		155.683	171.390	85.460
2] Unsecured Loans		43.010	44.621	44.276
TOTAL BORROWING		198.693	216.011	129.736
DEFERRED TAX LIABILITIES		27.745	24.100	21.570
TOTAL		328.100	318.591	221.682
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		224.273	220.440	166.693
Capital work-in-progress		18.246	0.524	0.000
INVESTMENT		0.041	0.040	0.037
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	86.175	90.436	64.608
	Sundry Debtors	154.200	142.835	97.959
	Cash & Bank Balances	5.127	3.439	2.343
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	28.178	24.615	21.069
Total Current Assets		273.680	261.325	185.979
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	187.730	159.413	122.153
	Provisions	0.410	4.325	8.876
Total Current Liabilities		188.140	163.738	131.029
Net Current Assets		85.540	97.587	54.950
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		328.100	318.591	221.682

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		580.035	458.467	359.720
Other Income		2.661	2.517	0.574
Total Income		582.696	460.984	360.294
Profit/(Loss) Before Tax		33.244	16.679	12.205
Provision for Taxation		12.160	5.631	2.859
Profit/(Loss) After Tax		21.084	11.048	9.346
Expenditures :
	Raw Material Consumed	377.728	315.452	243.748
	Purchases made for re-sale	15.298	17.324	15.755
	Consumption of stores and spares parts	4.454	3.215	2.013
	Increase/(Decrease) in Finished Goods	4.452	(11.491)	(12.415)
	Salaries, Wages, Bonus, etc.	29.255	27.443	24.609
	Managerial Remuneration	4.683	3.138	3.527
	Payment to Auditors	0.400	0.305	0.304
	Interest	16.245	8.946	5.678
	Insurance Expenses	1.565	1.237	1.062
	Power & Fuel	17.312	12.440	8.254
	Depreciation & Amortization	13.066	9.509	7.460
	Other Expenditure	64.994	56.787	48.094
Total Expenditure		549.452	444.305	348.089

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	03.61	02.39	2.41
Net Profit Margin (PBT/Sales)	(%)	05.73	03.63	3.15
Return on Total Assets (PBT/Total Assets}	(%)	06.43	03.45	3.46
Return on Investment (ROI) (PBT/Networth)		32.70	21.25	0.17
Debt Equity Ratio (Total Liability/Networth)		3.80	4.83	3.70
Current Ratio (Current Asset/Current Liability)		1.45	1.59	1.41

LOCAL AGENCY FURTHER INFORMATION

Trade Reference

· Atul Limited

· Raymond’s

HISTORY

The company was incorporated on 20^th July, 1984 at Mumbai in Maharashtra under name and style of Saraf Chemicals Private Limited and change the name and style to Saraf Chemicals Limited with effect form 1^st July, 1996. Its’ having Company Registration No. 33486.

Subject is a part of Saraf Group which was established in the year 1952.

The company has collaboration with Novo Norsdisk, Denmark, the largest manufacturer of industrial enzymes in the world.

The group has tie ups with Bayer AG, Germany for textile finishing chemicals, Sumitomo Corporation India, for speciality reactive dyes and Novo Nordisk for enzymes.

The Group has been accredited with ISO 9002 Certification.

The company’s fixed assets of important value include land, building, plant and machinery, furniture and fixture and office equipments and vehicles.

FORM NO.8

Name of the Company	Saraf Chemicals Limited
Presented By	Mr. Asok M Saraf
1) Date and description of instrument creating the change	Letter of Hypothecation dated 14.03.1989
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 0.100 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	Steck of Textiles chemicals lying at the Godown at kakad Chambers, worli and anywhere else in India.
4) Gist of the terms and conditions and extent and operation of the charge.	Rate of interest 17.5% Margin 40% in Bank Favour Payable on Demand The empowered to take possession of remove stock The charge covers the money due to the bank in other accountant
5) Name and Address and description of the person entitled to the charge.	Indian Overseas Bank, Worli Branch, Kakad Chamber 132, A B Road, Worli Mumbai – 400018
6) Date and brief description of instrument modifying the charge	Letter of SICOM Limited for Ceding of paripassu charge on the block assets of the company with Indian overseas Bank dated 12.12.2005
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.	Present Modification By the present modification the terms and conditions and securities of the charge on the block assets of the company had been modified by letter from SICOM to secure Term Loan of Rs. 51.600 Millions The securities are First charge in favour of the Bank in respect of the Book Debts, Stock of Raw Me trials, work in progress and finished goods, stores, spares, accepted bills, Hundies etc. of the company Charge on block assets of the company shall rank pari – passu with SICOM Limited to secure term loan of Rs. 51.600 Millions Past Modification Original charge dated 14.03.1989 Registered on 14.09.1989 Further modification charged registered on 06.09.1996 July 1996 charge Further modification charged 11^th March, 1998 registered on 18.07.2000 charge Further modification charged 2.06.2000 registered on 20.09.200 charge Further modification charged 2.06.2000 registered on 20.09.200 charge Further modification charged 16.11.2000 registered on 7.12.200 charge Further modification charged 15.04.2002 registered on 01.05.2002 charge Further modification charged 21.08.2004 registered on 26.08.2004 charge

This form is for

Modification of charge

Charge identification number of the modified

90235388

Corporate identity number of the company

U24100MH1984PLC033486

Name of the company

Saraf Chemicals Limited

Address of the registered office or of the principal place of business in India of the company

201, Kakad Chambers, 132, Dr. A B Road, Worli, Mumbai - 400 018, Maharashtra, India.

Type of charge

Book Debts

Movable Property

Floating Charge

Particular of charge holder

Name :	Indian Overseas Bank
Address :	Mumbai Worli Branch, Kakad Chamber 132, A B Road, Worli Mumbai – 400018
Email :	worlimgr@mummrc01.iobnet.co.in

Nature of description of the instrument creating or modifying the charge

Letter of hypothecation (Form 110E)

Term loan Agreement (Form 110C)

Date of instrument Creating the charge

10.01.2008

Amount secured by the charge

Rs.450.097 Millions

Brief particulars of the principal terms an conditions and extent and operation of the charge

Rate of Interest

Cash Credit

IDDBP/ DUBD

Cheque purchase

Term Loan

PC/ PCFC

FDDPB/ FDUBD

Letter of Credit

Letter of Guarantee

Terms of Repayment

Term Loans : Repayable in 20 equal monthly installments.

Other limits : Repayable on demand

Margin

Cash Credit : Stocks – 25%; Book Debts – 35%

PC/ PCFC : 15%

IDDBP/ IDUBD : 10%

FDDBP/ FDUBD : LC Bills – Nil; Non LC Bills – 10%

Term Loan 2 and 3 : 25%

Letter of Credit : 10%

Letter of Guarantee 1 : 10%

Letter of Guarantee 2 : 25%

Extent and Operation of the charge

The charge is to operate as security, by way of first charge, for the due repayment of the enhanced aggregate credit limit of Rs.450.097 Millions together with interests, additions interests, costs, charges, expenses and all other money payable by the company to the bank in term of sanction

Others

Facility	Limit in (millions)	Sub Limit
CC	135.000	--
TL 1	51.600	--
TL 2	37.550	PC/ PCFC Rs.60.000 Millions
TL 3	186.100	IDDBP/ IDUBD Rs.30.000 Millions
LC	30.000	Ch. Purchase Rs.2.000 Millions
LG 1	2.000	FDDBP/ FDUBD Rs.30.000 Millions
LG 2	7.847

Short particulars of the property charged

First charge on all the company’s

Raw material for manufacturer of textile auxiliary chemicals, fine chemicals, drug intermediates, dyestuffs, all work in process, finish goods, all other inventory and book debts.

Machinery installed/ lying in the factories, vehicles and all other assets

Factory buildings, machineries and project assets financed from the term loan (Present and Previous)

Date of latest modification prior to the present modification

27.12.2005

Particulars of the present modification

The amount secured by the charge has been enhanced from rs.186.150 millions to rs.450.097 millions.

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. 44.97
UK Pound	1	Rs. 81.04
Euro	1	Rs. 56.41

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	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