MIRA INFORM REPORT

Report Date :

05.12.2011

IDENTIFICATION DETAILS

Name :	LG POLYMERS INDIA PRIVATE LIMITED
Registered Office :	R. R. V. Venkatapuram, Visakhapatnam – 530029, Andhra Pradesh
Country :	India
Financials (as on) :	31.12.2010
Date of Incorporation :	10.12.1996
Com. Reg. No.:	01-25917
Capital Investment / Paid-up Capital :	Rs.1263.300 Millions
CIN No.: [Company Identification No.]	U25203AP1996PTC025917
TAN No.: [Tax Deduction & Collection Account No.]	VPNL00060E
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturing of Polystyrene and Expandable Polystyrene.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (49)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 8000000
Status :	Good
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a part of LG Group, a well known Korean giant. It is a well established company having satisfactory track. The company us progressing well. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The Company can be considered normal for business dealings at usual trade terms and conditions.

NOTES:

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office/ Factory :	R. R. V. Venkatapuram, Visakhapatna – 530029, Andhra Pradesh, India
Tel. No.:	91-891-2520455 to 58/ 2520018
Fax No.:	91-891-2520338/ 2520528
E-Mail :	info@lgpi.co.in cs01071953@gmail.com dssetty@lgpi.co.in
Website :	http://www.lgpi.co.in
Location :	Owned
Corporate/ Head Office:	Oberoi Garden Estates, 2^nd Floor, A Wing, Off Saki Vihar Road, Chandivali, Sakinaka, Andheri (East), Mumbai – 400072, Maharashtra, India
Branches :	1001 Vikram Tower, 16 Rajendra Place, New Delhi – 110 008, India Tel. No. : 91-11-25726918/25728002/25747295 Fax No. : 91-11-25755730 Located at · Mumbai · Bangalore · Kolkata · Chennai
Location :	Owned
Sales Office 1 :	No.5, Nehru Nagar, 2^nd Avenue, Anna Nagar, Chennai – 600040, Tamilnadu, India
Tel No.:	91-44-28592450/ 28592117
Fax No.:	91-44-28592117
Email :	rsomds@lgpi.co.in
Sales Office 2 :	1/36, 2nd Floor, Ulsoor Road Cross, Hanumanthappa Layout, Bangalore – 560042
Tel No.:	91-80-25591889 / 890
Fax No.:	91-80-25550722 / 723
Overseas Branch :	AB-3, Safdarjung Enclave, New Delhi, India
Tel. No.:	91-11-26714001
Fax No. :	91-11-26713646

DIRECTORS

As on 30.06.2011

Name :	Mr. Kim Jeeyul
Designation :	Additional Director
Address :	Olympic Family Town Apartment, 209-702, 150 Munjeong-Dong-Songpa-Gu, Seoul, Korea
Date of Birth/Age :	20.10.1957
Date of Appointment :	24.03.2011
DIN No.:	03585773

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U25203AP1996PTC025917	LG Polymers India Private Limited	Additional director	24-03-11	24-03-11	-	Active	NO
2	U24290DL1996PTC081742	LG Chemical India Private Limited	Additional director	25-03-11	25-03-11	-	Active	NO

Name :	Mr. Cheo Ki Jang
Designation :	Director (Finance and Accounts)
Address :	692 (28/8), Gojan-dong Danwon – Gu, Ansan-si, Gyeonggido, Korea
Date of Birth/Age :	18.04.1966
Date of Appointment :	03.03.2008
DIN No.:	02121350

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U25203AP1996PTC025917	LG Polymers India Private Limited	Director	03-03-08	03-03-08	-	Active	NO
2	U24290DL1996PTC081742	LG Chemical India Private Limited	Director	03-03-08	03-03-08	-	Active	NO

Name :	Mr. Byung Gu Kwag
Designation :	Managing Director and Chief Executive Officer
Address :	20, Yoido-Dong, Youngdungpo-gu Seoul, Korea – 150721
Date of Birth/Age :	23.09.1959
Date of Appointment :	01.01.2010
DIN No.:	02949235

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U25203AP1996PTC025917	LG Polymers India Private Limited	Managing director	01-01-10	01-01-10	-	Active	NO
2	U24290DL1996PTC081742	LG Chemical India Private Limited	Director	01-01-10	01-01-10	-	Active	NO

Name :	Mr. Jang Sunghooh
Designation :	Additional Director
Address :	50-1 (11/4), B – 3401, Hangangno 1 (il) – Ga, Yongsan-Gu, Seoul Metropolitan
Date of Birth/Age :	30.11.1954
Date of Appointment :	24.03.2011
DIN No.:	03513972

Other Directorship

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U25203AP1996PTC025917	LG Polymers India Private Limited	Additional director	24-03-11	24-03-11	-	Active	NO
2	U24290DL1996PTC081742	LG Chemical India Private Limited	Additional director	24-03-11	24-03-11	-	Active	NO

Name :	Mr. Praveen Surisetty Venkata
Designation :	Director (Operations)
Address :	50-24-12, TPT Colony, Seethammadhara, Visakhapatnam – 530002, Andhra Pradesh, India
Date of Birth/Age :	03.02.1957
Date of Appointment :	03.03.2008
DIN No.:	02147522

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2011

Names of Shareholders	No. of Shares
LG Chemical India Private Limited, India	126330000
Praveen Surisetty Venkata	1
Total	126330001

Equity Share Break up (Percentage of Total Equity)

As on 30.06.2011

Category	Percentage
Bodies corporate	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Polystyrene and Expandable Polystyrene.

Products :

Products Description	Item Code No
Polystyrene	39031909
Expandable Polystyrene	39031100
Styrene	29025000

PRODUCTION STATUS

As on 31.12.2010

Particulars	Unit	Installed Capacity*	Actual Production
Polystyrene	MT	100000	74792
Expandable Polystyrene	MT	22000	22155

Note: * As certified by the management.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· Bank of America

· ICICI Bank

· Standard Chartered Bank, Credit Risk Control, Narain Manzil, 23 Barakhamba Road, New Delhi – 110001, India

· Chohugh Bank

· Bank Of India

· Hongkong Shanghai Banking Corporation

· HDFC Bank Limited

· CITI Bank

· IDBI Bank Limited, Balaji Mangalagiri Chambers, 9/29/6-1, Balaji Nagar, Sripuram, Visakhapatanam – 530003, Andhra Pradesh, India

Facilities :

Secured loans	31.12.2010 (Rs. In Millions)	31.12.2009 (9 Months) (Rs. In Millions)
Short Term Loan from a Bank (secured by way of hypothecation over the stock and Book debts of the company, on pari passu basis)	60.000	0.000
Cash credit and Working Capital loans from banks (Secured by way of hypothecation charge over the stocks debts of the company, on pari passu basis)	43.436	0.000
Total	103.436	0.000

Banking Relations :	--
Auditors :
Name :	Price Waterhouse Chartered Accountants
Address :	8-2-293/82, A /1131 A, Road No.36, Jubilee Hills, Hyderabad – 500034, Andhra Pradesh, India
Tel No.:	91-40-66246600
Fax No.:	91-40-66246400
PAN No.:	AAEFP5579P
Holding Company:	· LG Chemical India Private Limited Address: AB -3, LG house, Safdarjung Enclave, New Delhi – 110 029, India CIN No.: U99999DL1996PTC081742
Ultimate Holding Company:	LG Chemical Limited, Korea

CAPITAL STRUCTURE

As on 31.12.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
130000000	Equity Shares	Rs.10/- each	Rs.1300.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
126330001	Equity Shares	Rs.10/- each	Rs.1263.300 millions

NOTE:

(Of the above shares 126330000 share are held by LG Chemical India Private Limited, the Holding Company)

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2010	31.12.2009 9 Months	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		1263.300	1263.300	1263.300
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		730.100	574.025	467.750
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1993.400	1837.325	1731.050
LOAN FUNDS
1] Secured Loans		103.436	0.000	152.160
2] Unsecured Loans		0.000	0.000	10.389
TOTAL BORROWING		103.436	0.000	162.549
DEFERRED TAX LIABILITIES		55.181	69.810	28.635
TOTAL		2152.017	1907.135	1922.234
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		479.934	498.509	516.698
Capital work-in-progress		14.550	2.525	106.037
INVESTMENT		4.020	34.020	361.198
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1332.725	660.117	498.547
	Sundry Debtors	697.176	751.718	528.528
	Cash & Bank Balances	102.481	237.396	187.785
	Other Current Assets	0.000	0.000	0.050
	Loans & Advances	494.357	346.795	227.077
Total Current Assets		2626.739	1996.026	1441.987
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	715.938	534.758	406.423
	Other Current Liabilities	48.044	44.104	51.543
	Provisions	209.244	45.083	45.720
Total Current Liabilities		973.226	623.945	503.686
Net Current Assets		1653.513	1372.081	938.301
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		2152.017	1907.135	1922.234

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2010	31.12.2009 9 Months	31.03.2009
	SALES
		Income	6896.120	4492.378	5446.143
		Other Income	31.182	43.347	51.379
		TOTAL	6927.302	4535.725	5497.522
Less	EXPENSES
		Office Expenses
		Administrative Expenses
		Advertising Expenses
		TOTAL	6459.649	4344.030	5636.592
	PROFIT / (LOSS) BEFORE TAX		467.653	191.695	(139.070)
Less	TAX		164.266	85.420	56.955
	PROFIT / (LOSS) AFTER TAX		303.387	106.275	(82.115)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		562.599	456.324	538.439
Less	APPROPRIATIONS
		Proposed Dividend at 10%	126.330	0.000	0.000
		Dividend Distribution Tax	20.982	0.000	0.000
	BALANCE CARRIED TO THE B/S		718.674	562.599	456.324
	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Export	490.000	527.318	49.922
	TOTAL EARNINGS		490.000	527.318	49.922
	IMPORTS
		Raw Materials	5503.701	3526.272	3397.560
		Chemicals, Stores & packaging material	60.242	34.104	44.320
		Capital Goods	4.164	2.831	0.768
		Traded Goods	83.709	136.470	703.634
	TOTAL IMPORTS		5651.816	3699.677	4146.282
	Earnings / (Loss) Per Share (Rs.)		2.40	0.84	(0.65)

KEY RATIOS

PARTICULARS		31.12.2010	31.12.2009 9 Months	31.03.2009
PAT / Total Income	(%)	4.38	2.34	(1.49)
Net Profit Margin (PBT/Sales)	(%)	6.78	4.27	(2.55)
Return on Total Assets (PBT/Total Assets}	(%)	15.05	7.68	(7.10)
Return on Investment (ROI) (PBT/Networth)		0.23	0.10	(0.08)
Debt Equity Ratio (Total Liability/Networth)		0.54	0.34	0.38
Current Ratio (Current Asset/Current Liability)		2.70	3.20	2.86

LOCAL AGENCY FURTHER INFORMATION

FINANCIAL PERFORMANCE:

EPS Manufacturing Capacity has been increased by MT 2000 per annum by process improvement etc.

There is an increase in the sale of manufactured product i.e. polystyrene and EPS. But the company has been gradually withdrawing from trading in styrene monomer as per corporate guide lines. Despite withdrawal from trading activity, there has been an increase in over all sales volume and turnover.

And there is significant improvement in profitability due to improved business environment despite some loss on US dollar exchange rate movement on imports against a profit in the previous accounting period.

The directors are working for further improvement in sales volume and the operating level of the plants during current year.

CONTINGENT LIABILITY:

(Rs. In Millions)

Particulars	31.03.2010	31.03.2009
Excise duty matters disputed by the company	1.682	0.200
Service tax matters disputed by the company	52.289	46.592
Sales tax matters under dispute	3.747	4.984
Income tax matter under dispute	47.064	31.101
Stamp Duty disputed by the company	56.011	56.011
Claims against the company not acknowledge as debts	44.053	42.056

FORM 8:

Corporate identity number of the company	U25203AP1996PTC025917
Name of the company	LG POLYMERS INDIA PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	R. R. V. Venkatapuram, Visakhapatnam – 530029, Andhra Pradesh, India E-mail : dssetty@lgpi.co.in
This form is for	Creation of charge
Type of charge	Book Debts Other (First charge over current assets)
Particular of charge holder	Standard Chartered Bank, Credit Risk Control, Narain Manzil, 23 Barakhamba Road, New Delhi – 110001, India E-mail : ashima.tandon@sc.com
Nature of instrument creating charge	Unattested memorandum of hypothecation
Date of instrument Creating the charge	07.05.2010
Amount secured by the charge	Rs.1120.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest As per facility advice letter dated 09.04.2010 to be amended from time to time. Terms of repayment As per facility advice letter dated 09.04.2010 to be amended from time to time. Margin As per facility advice letter dated 09.04.2010 to be amended from time to time. Extent and operation of the charge Extent and operation – 100%
Short particulars of the property or asset(s) charged (including complete address and location of the property)	Hypothecation by way of first charge over all present and future book debts outstanding moneys, receivable, claims and bill etc. and all present and future stock in trade of raw material, finished goods, goods in process of manufacture and other merchandise whatsoever being movable properties stored or to be stored at the company’s godowns or premises or whereverlse the same may be.

FIXED ASSETS:

· Freehold Land

· Building

· Factory

· Non Factory

· Plant and Machinery

· Furniture and Fixture

· Office Equipment

· Vehicles

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.51.35
UK Pound	1	Rs.80.51
Euro	1	Rs.69.14

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--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		49

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	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
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.