MIRA INFORM REPORT

Report Date :

02.03.2011

IDENTIFICATION DETAILS

Name :	ADI FINECHEM LIMITED (w.e.f. 19.10.2010)
Formerly Known As :	H K FINECHEM LIMITED
Registered Office :	253/P, Chekhala, Sanand Kadi Highway, Tal Sanand, Chekhala – 382145, Gujarat
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	25.05.1985
Com. Reg. No.:	04-7845
CIN No.: [Company Identification No.]	L15140GJ1985PLC007845
TAN No.: [Tax Deduction & Collection Account No.]	AHMH00018E
PAN No.: [Permanent Account No.]	AAACH5113Q
Legal Form :	Public limited liability company. Company’s Shares are listed on Stock Exchange.
Line of Business :	Manufacture of high grades of rice bran oil, fatty acids and monoglycerides.

RATING & COMMENTS

MIRA’s Rating :

B (30)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 540764
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Profitability of the company appears to be under pressure. However, trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some caution.

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 – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
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 :	253/P, Chekhala, Sanand-Kadi Highway, Taluka  Sanand, Dist. Ahmedabad 382 145, Gujarat,  India
Tel. No.:	91-2717-222618 – 19 - 20 – 324390
Fax No.:	91-2717-222616
E-Mail :	hkindia@hkfinechem.com
Website :	http://www.hkfinechem.com

DIRECTORS

Name :	Mr. Rajan R. Harivallabhdas
Designation :	Chairman and Managing Director
Name :	Mr. Shyam B. Ghia (upto October 28, 2005)
Designation :	Director
Name :	Mr. Chinubhai R. Shah
Designation :	Director
Name :	Mr. Nahoosh J. Jariwala
Designation :	Executive Director
Name :	Mr. Prafull Anubhai
Designation :	Director
Directorship in Public Limited company :	· Unichem Laboratories Limited · Vardhman Textiles Limited · Gruh Finance Limited · Torrent Cables Limited · H.K. Finechem Limited · The EMDAF Limited · Soma Textiles and Industries Limited
Name :	Mr. Janak G. Nanavaty
Designation :	Director
Directorship in public Limited Company :	· Santram Spinners Limited · H.K. Finechem Limited
Name :	Dr. Himanshu C. Patel
Designation :	Director
Name :	Mr. Naishadh I. Parikh (w.e.f. October 28, 2005)
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Rajen N. Jhaveri
Designation :	General Manager (Finance) and Company Secretary

SHAREHOLDING PATTERN

AS ON 31.12.2010

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of promoter and Promoter Group
1) Indian
a) Individuals / Hindu Undivided Family	4342716	45.71
b) Bodies corporate	1460378	15.37
Any Others (Secify)
Partnership Firm	164977	1.74
2) Foreign
(B) Public Shareholdings
1) Institutions
2) Non – Institution
a) Bodies corporate	651269	6.86
b) Individuals
i. Individual Shareholders holding nominal share capital upto Rs.0.100 Million	1224520	12.89
ii. Individual Shareholders holding nominal share capital in excess Rs.0.100 Million	1591478	16.75
c) Any other
i) NRI	64662	0.68
Total	9500000	100.00

BUSINESS DETAILS

Line of Business :

Manufacture of high grades of rice bran oil, fatty acids and monoglycerides.

Products :

I.T.C. Code No.(ITC Code)	Product Description
38249090	Deodorizer Distillate (Mixed Tocopherols)
29171990	Dimer Acid
38231900	Linoleic Acid

GENERAL INFORMATION

No. of Employees :

127

Bankers :

• State Bank of India
• HDFC Bank

Facilities:

Secured Loan	Rs. In Millions 31.03.2010	Rs. In Millions 31.03.2009
Term Loans	13.538	31.243
Interest Accrued and Due	0.050	0.000
Working Capital Loans	67.633	65.749
Loans - Against hypothecation of vehicles	2.167	1.727
Total	83.388	98.719
Notes: 1. All the above loans except Vehicle loans from Bank are secured by first mortgage on the Company's immovable properties both present and future and hypothecation of all present and future machinery, other movable assets, goods and bookdebts of the Company. They are further secured by personal guarantee given by the Managing Director of the Company. 2. The Vehicle loans from banks are secured by hypothecation of vehicles and are further secured by personal guarantee given by the Directors of the Company. 3. Principal amount payable within one year Rs.11.493 Millions (Previous year Rs.17.704 Millions)
Unsecured Loan	Rs. In Millions 31.03.2010	Rs. In Millions 31.03.2009
Inter-Corporate Deposits Fixed Deposits - From a Director - From Others	35.000 1.000 10.552	38.000 1.000 7.972
Total	46.552	46.972

Banking Relations :	--
Auditors :
Name :	Shah and Shah Associates Chartered Accountants
Address :	Ahmedabad
Associates/Subsidiaries :	Aja Impex Private Limited formerly known as (Shri Aja Electro Chem Private Limited) Shri Abhyudaya Chemicals Private Limited Shri Arya Investment Private Limited Essenar Investments Private Limited PCD Investment Private Limited UKM Investment Private Limited Harihar Manufacturing and Trading Private Limited Adicorp Enterprises Private Limited

CAPITAL STRUCTURE

AS ON 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
14500000	Equity Shares	Rs.10/- each	Rs.145.000 Millions
50000	Preference Shares	Rs.100/- each	Rs.5.000 Millions
	Total		Rs.150.000 Millions

Issued Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
9500000	Equity Shares	Rs.10/- each	Rs.95.000 Millions

Note:

Equity Share Capital includes 31,500 equity shares allotted as fully paid up bonus shares by way of capitalisation from surplus in Profit and Loss account.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		95.000	95.000	95.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		40.191	45.750	60.246
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		135.191	140.750	155.246
LOAN FUNDS
1] Secured Loans		83.389	98.720	91.421
2] Unsecured Loans		46.552	46.972	32.700
TOTAL BORROWING		129.941	145.692	124.121
DEFERRED TAX LIABILITIES		19.539	21.206	27.537
TOTAL		284.671	307.648	306.904
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		190.125	204.019	208.322
Capital work-in-progress		2.782	3.466	3.563
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	66.834	56.916	65.332
	Sundry Debtors	29.034	46.362	32.353
	Cash & Bank Balances	2.152	2.222	2.045
	Other Current Assets	0.259	0.208	0.000
	Loans & Advances	11.521	12.495	23.071
Total Current Assets		109.800	118.203	122.801
Less : CURRENT LIABILITIES & PROVISIONS
		9.669	10.843
	Other Current Liabilities	4.133	3.271	27.782
	Provisions	4.234	3.926
Total Current Liabilities		18.036	18.040	27.782
Net Current Assets		91.764	100.163	95.019
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		284.671	307.648	306.904

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	383.913	340.311	311.710
		Other Income	1.355	0.337	2.320
		TOTAL (A)	385.268	340.648	314.030
Less	EXPENSES
		(Increase)/Decrease in Stocks	15.801	10.446	(27.560)
		Manufacturing & Other Operating Expenses	342.960	315.740	307.180
		TOTAL (B)	358.761	326.186	279.620
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		26.507	14.462	34.410
Less	FINANCIAL EXPENSES (D)		16.206	18.243	15.670
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		10.301	(3.781)	18.740
Less/ Add	DEPRECIATION/ AMORTISATION (F)		16.910	16.536	16.160
	PROFIT BEFORE TAX (E-F) (G)		(6.609)	(20.317)	2.580
	Previous Year Expenses (Net)		0.230	0.000	0.000
Less	TAX (I)		(1.283)	(5.821)	(5.640)
	PROFIT AFTER TAX (G-I) (J)		(5.556)	(14.496)	8.220
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		39.364	53.860	45.640
	BALANCE CARRIED TO THE B/S		33.806	39.364	53.860
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	99.810	60.468	56.546
	TOTAL EARNINGS		99.810	60.468	56.546
	IMPORTS
		Raw Materials	5.938	0.318	13.051
		Stores & Spares	0.025	0.000	0.183
		Capital Goods	0.000	0.000	0.022
	TOTAL IMPORTS		5.963	0.318	13.256
	Earnings Per Share (Rs.)		(0.59)	(1.53)	--

QUARTERLY

PARTICULARS	30.06.2010	30.09.2010	31.12.2010
Type	1^st Quarter	2^nd Quarter	3^rd Quarter
Sales Turnover	110.710	111.240	160.170
Total Expenditure	89.330	95.240	131.520
PBIDT (Excl OI)	21.380	16.000	28.650
Other Income	0.010	0.010	0.000
Operating Profit	21.390	16.010	28650
Interest	3.130	3.300	3.210
Exceptional Items	0.000	0.000	0.000
PBDT	18.260	12.710	25.440
Depreciation	4.200	4.320	4.430
Profit Before Tax	14.060	8.390	21.010
Tax	6.140	4.960	7.110
Reported PAT	7.920	3.430	13.900
Extraordinary Items	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000
Net Profit	7.920	3.430	13.900

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(1.44)	(4.25)	2.62
Net Profit Margin (PBT/Sales)	(%)	(1.72)	(5.97)	0.83
Return on Total Assets (PBT/Total Assets}	(%)	(2.20)	(6.30)	0.78
Return on Investment (ROI) (PBT/Networth)		(0.05)	(14.43)	0.09
Debt Equity Ratio (Total Liability/Networth)		1.09	1.16	0.18
Current Ratio (Current Asset/Current Liability)		6.09	6.55	4.42

LOCAL AGENCY FURTHER INFORMATION

OPERATIONS:

(A) Sales and Profit:

The sales and other income of the Company during 2009-10 were marginally higher at Rs.385.269 Millions compared to Rs.340.648 Millions of the previous year. The company has incurred a loss of Rs.555.900 Millions compared to previous year's loss of Rs.14.496 Millions. This is due to better utilization of capacity.

(B) Raw Material:

Main raw materials were in shot-supply and there was also rise in prices.

(C) Export:

The company was able to procure the required orders for Toco-concentrates. The Company has made export of Rs.99.809 Millions during the year.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

ECONOMIC SCENARIO

The year started in the midst of the global crisis, financial meltdown and adverse business condition. Increase in inflation, high interest rates and liquidity crunch witnessed slowdown in both local and export demand.

The Indian government introduced a lot of stimulus measures to boost the demand by increase in public expenditure, reduction in excise duty etc. The Reserve Bank of India also injected liquidity in the market by different measures. As a result of this the market sentiments improved in the later part of the year.

INDUSTRY STRUCTURE AND DEVELOPMENT:

The growth of vegetable oil refining industry has got boost due to changes in lifestyle, food habits, organized food retail, urbanization and increase in per capita income. Realizing vast untapped opportunities domestic and international players have been constantly expanding operations in India.

OPPORTUNITIES AND THREATS:

Company Processes by-product streams of vegetable oil refineries. Availability of the raw materials consumed by the company has increased during the year with minor increase in prices. Company is confident of selling additional quantity and passing the cost burden by increasing the prices of its products in Export and Domestic markets. Company has developed new product Cardanol from Cashew Nut Shell Liquid.

Fixed Assets

Ø Land

Ø Building

Ø Plant and Machinery

Ø Electric Installation

Ø Air Conditioners

Ø Office Equipments

Ø Furniture and Fixtures

Ø Vehicles

AS PER WEBSITE

COMPANY PROFILE:

Subject is a manufacturing company located near the city of Ahmedabad in the western region of India. Their company utilizes state of the art technology with critical equipments acquired from Germany and Switzerland. Fractions of natural oils and fats such as soyabean, sunflower and cottonseed are the source of the company's fine chemical products. They specialize in oleo chemicals and products for the nutraceutical industry. Their hallmark has been consistent supply of products of superior quality in India, USA, Europe and Japan

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.45.12
UK Pound	1	Rs.73.43
Euro	1	Rs.62.32

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	3
--RESERVES	1~10	2
--CREDIT LINES	1~10	3
--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	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		30

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.