MIRA INFORM REPORT

Report Date :

09.06.2011

IDENTIFICATION DETAILS

Name :	FUSION CHEMICALS AND PRODUCTS PRIVATE LIMITED
Registered Office :	Plot No. 8, I.D.A. Phase – I, Cherlapally, Hyderabad – 500051, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	17.01.1981
Com. Reg. No.:	01-002892
Capital Investment / Paid-up Capital :	Rs.1.600 Millions
CIN No.: [Company Identification No.]	U24110AP1981PTC002892
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer of Potassium Silicate, Lithium Silicate and Sodium Silicate
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba [45]

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

Maximum Credit Limit :	USD 110000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. 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 – June 30, 2010

Country Name	Previous Rating (01.04.2010)	Current Rating (30.06.2010)
India	A1	A1

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

INFORMATION PARTED BY

Name :	Mr. Suryanarayan
Designation :	Head of Finance and Account Department
Date :	07.06.2011
Name :	Mr. Unikrishnan
Designation :	Director
Contact No.:	91-9866074972
Date :	07.06.2011

LOCATIONS

Registered Office :	Plot No. 8, I.D.A. Phase – I, Cherlapally, Hyderabad – 500051, Andhra Pradesh, India
Tel. No.:	91-40-27261880 / 27261509
Mobile No.:	91-9866074972 [Mr. Uni Krishnan]
Fax No.:	91-40-27262206
E-Mail :	Fusion1001@yahoo.com
Location :	Owned

DIRECTORS

As on 30.09.2010

Name :	Mr. Sangaraju Manihar Raju
Designation :	Managing Director
Address :	2-23, Road No.3, Kakatiyanagar, Habsiguda, Ranga Reddy, Hyderabad – 500007, Andhra Pradesh, India
Date of Birth/Age :	15.08.1956
Date of Appointment :	01.04.2007
DIN :	00188956
Name :	Mr. Sreedhar Chowdhary
Designation :	Director
Address :	8-2-680/A, Road No.12, Banjarahills, Ranga Reddy, Hyderabad – 500034, Andhra Pradesh, India
Date of Birth/Age :	12.05.1951
Date of Appointment :	26.12.1994
DIN :	00188924

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2010

Names of Shareholders	No. of Shares
Sangaraju Manihar Raju	10280
S. Sree Sudha Raju	69720
Sreedhar Chaowdhary	65800
G. Renuka Chaowdahry	5800
G. Jayadev Chaowdhary	8400
Total	160000

As on 30.09.2010

Category	Percentage
Directors or relatives of Directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Potassium Silicate, Lithium Silicate and Sodium Silicate

PRODUCTION STATUS As on 31.03.2010

Particulars	Unit	Installed Capacity	Actual Production
Potassium and Sodium Silicate	Tonnes	2400	3103.123
Zirconium Frit	Tonnes	180	128.520
Lacquer	Litres	60,000	122.000

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

State Bank of Hyderabad, Habsiguda Branch, Habsiguda, Hyderabad – 500007, Andhra Pradesh, India

Facilities :

Secured Loan [Rs. in million]	31.03.2010	31.03.2009
From State Bank of Hyderabad
Working capital Loans	3.645	3.423
Vehicle loan from profit and loss account	0.904	1.396
Total	4.549	4.819

Banking Relations :	--
Auditors :
Name :	Brahmayya and Company Chartered Accountant
Address :	403 and 404, Gloden Green Apartments,Irrum Manzil Colony, Hyderbad, Andhra Pradesh – 500082, India
Associates :	Fusion Advanced Materials Private Limited

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
250,000	Equity Shares	Rs.10/-each	Rs.2.500 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
160,000	Equity Shares	Rs.10/-each	Rs.1.600 millions

Of the above shares 120,000 equity shares are allotted as fully paid up by way of bonus shares by capitalizing general reserve

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

Particulars		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		1.600	1.600	1.600
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		26.427	26.020	24.447
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		28.027	27.620	26.047
LOAN FUNDS
1] Secured Loans		4.549	4.819	4.050
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		4.549	4.819	4.050
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		32.576	32.439	30.097
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		6.460	6.211	4.159
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		1.396	1.340	1.387
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	5.079	5.304	3.990
	Sundry Debtors	11.054	10.864	6.928
	Cash & Bank Balances	12.263	12.249	18.015
	Other Current Assets	1.220	1.206	0.941
	Loans & Advances	9.410	7.610	4.617
Total Current Assets		39.026	37.233	34.491
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	5.464	4.664	--
	Other Current Liabilities	0.403	0.353	4.072
	Provisions	8.439	7.328	5.868
Total Current Liabilities		14.306	12.345	9.940
Net Current Assets		24.720	24.888	24.551
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		32.576	32.439	30.097

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	60.323	45.959	42.726
		Other Income	2.149	1.584	0.855
		TOTAL (A)	62.472	47.543	43.581
Less	EXPENSES
		Raw material Consumed	33.826	26.981
		Rates and taxes	1.871	1.435
		Power and Fuel	6.039	3.797
		Staff Cost	7.180	5.699
		Other Expenses	7.937	5.261
		Increase/ Decrease in Stocks	0.225	(0.938)
		Diminution in the value of Investments	(0.056)	0.047
		TOTAL (B)	57.022	42.282	37.758
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		5.450	5.261	5.823
Less	FINANCIAL EXPENSES (D)		0.412	0.288	0.053
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		5.038	4.973	5.770
Less/ Add	DEPRECIATION/ AMORTISATION (F)		1.511	1.189	0.979
	PROFIT BEFORE TAX (E-F) (G)		3.527	3.784	4.791
Less	TAX (I)		1.254	1.275	2.060
	PROFIT AFTER TAX (G-I) (J)		2.273	2.509	2.731
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		11.520	10.947	10.988
Less	APPROPRIATIONS
		Transfer to General Reserve	1.000	1.000	0.900
		Dividend	1.600	0.800	1.600
		Tax on Dividend	0.266	0.136	0.272
	BALANCE CARRIED TO THE B/S		10.927	11.520	10.947
	EARNINGS IN FOREIGN CURRENCY		2.462	2.831	NA
	Earnings Per Share (Rs.)		14.21	15.68	--

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	3.64	5.28	6.27
Net Profit Margin (PBT/Sales)	(%)	5.85	8.23	11.21
Return on Total Assets (PBT/Total Assets}	(%)	7.75	8.71	12.39
Return on Investment (ROI) (PBT/Networth)		0.12	0.14	0.18
Debt Equity Ratio (Total Liability/Networth)		0.67	0.62	0.54
Current Ratio (Current Asset/Current Liability)		2.73	3.02	3.47

LOCAL AGENCY FURTHER INFORMATION

Review Operations :

This year they are able to achieve the sales of Potassium Silicate, Sodium Silicate and Zirconium Frit to the extent of Rs.60.323 millions [Potassium Silicate and Sodium Silicate Quantity 3093.436 MT’s and Zirconium Frit 131.47 MT’s] there is an increase in sales to the extent of Rs.14.364 millions than previous year.

Contingent liabilities

Contingent Liabilities not provided for in the books of account on account of:

a. Disputed sales tax and excise duty liabilities are estimated at Rs.0.164 million (previous year Rs.0.363 million).

b. Guarantees given by the bankers to the extent of Rs. 1.498 millions (previous year Rs.0.803 million).

Bankers Charges Report as per Registry

This form is for	Modification of charge
Charge identification number of the modified	90135258
Corporate identity number of the company	U24110AP1981PTC002892
Name of the company	FUSION CHEMICAL AND PRODUCTS PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	Plot No.8ida Phase-I, Cherlapally, Hyderabad – 500051, Andhra Pradesh, India
Type of charge	Book Debts Movable Property Floating Charge Immovable Property
Particular of charge holder	State Bank of Hyderabad, Habsiguda Branch, Habsiguda, Hyderabad – 500007, Andhra Pradesh, India
Nature of description of the instrument creating or modifying the charge	1.Agreement Of Hypothecation Of Goods And Assets, C.2 2.Letter Regarding The Grant Of Individual Limits Within The Overall Limit, C.5
Date of instrument Creating the charge	05.03.2008
Amount secured by the charge	Rs.9.000 millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest - ROI ON Cash Credit : 12.5% p.a, Further the rate will be subject to change as per the directives of the RBI and at the discretion of the bank from time to time. Terms of Repayment - working capital limits repayable on demand. Margin - margin on stocks : 25%, 50% on book debts (cover period 90 days), Margin on FLC 25%, tenor 90 days. Extent and Operation of the charge - 1st Charge on and Hypothecation of stocks, book debts and other current assets of the company both present and future. 1st Charge on fixed assets of land and buildings, plant and machinery and other movable fixed assets of the company both present and future. Equitable mortgage of Factory land and buildings, situated at Plot # 8, IDA, Cherlapally, Hyderabad 500051 standing in the name of the company. Personal guarantee of the directors. Others – [Rs. in millions] Nature of facilities existing revised Cash Credit : 3.000 4.000 ODBCC : 1.000 -- IUBD : 1.000 -- D.P : 1.500 1.000 B G : 2.500 2.500 FLC : -- 1.500 Total : 9.000 9.000
Short particulars of the property charged	1st Charge on and Hypothecation of stocks, book debts and other current assets of the company both present and future. 1st Charge on fixed assets of land and buildings, plant and machinery and other movable fixed assets of the company both present and future. Equitable mortgage of Factory land and buildings, situated at Plot # 8, IDA, Cherlapally, Hyderabad 500051 standing in the name of the company. Personal guarantee of the directors.
Date of latest modification prior to the present modification	11.12.2006
Particulars of the present modification	No change WCL of Rs. 9.000 millions(CC: Rs 4.000 millions + D.P:Rs 1.000 million + BG:Rs. 2.500 millions + FLC:Rs. 1.500 millions ). 1st Charge on current assets of the company both present and future. 1st Charge on fixed assets of land and buildings, plant and machinery and other movable fixed assets of the company both present and future. Equitable mortgage of Factory land and buildings, situated at Plot # 8, IDA, Cherlapally, Hyderabad standing in the name of the company. Personal guarantee of the directors.

FIXED ASSETS :

• Land
• Factory - Building
• Plant and Machinery
• Furniture
• Vehicles
• Lab Equipments
• Computer
• Office Equipments
• Water Works

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.44.61
UK Pound	1	Rs.73.27
Euro	1	Rs.65.47

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	5
--PROFITABILIRY	1~10	5
--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	NO
--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	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.