MIRA INFORM REPORT

Report Date :

12.07.2012

IDENTIFICATION DETAILS

Name :	ADVANCED ENZYME TECHNOLOGIES LIMITED
Registered Office :	Sun-Magnetica, A Wing, 5^th Floor, Near LIC Service Road, Louis Wadi, Thane (West) - 400 604, Maharashtra
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	15.03.1989
Com. Reg. No.:	11-051018
Capital Investment / Paid-up Capital :	Rs.207.312 millions
CIN No.: [Company Identification No.]	U24200MH1989PLC051018
TAN No.: [Tax Deduction & Collection Account No.]	PNEA05159A
PAN No.: [Permanent Account No.]	AABCA4555E
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Subject is engaged in the business of manufacturing and sales of enzymes.
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 3241000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Profitability of the company appears to be good. Trade relations are reported as trustworthy. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered good 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 (30.09.2011)	Current Rating (31.12.2011)
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 :	Sun-Magnetica, A Wing, 5^th Floor, Near LIC Service Road, Louis Wadi, Thane (West) - 400 604, Maharashtra, India
Tel. No.:	91-22-41703200/ 25838350
Fax No.:	91-22-25835159
E-Mail :	info@enzymeindia.com
Website :	http://www.enzymeindia.com
R&D Centre 1 :	106, Dhanlaxmi Industrial Estate, Old Agra Road, Thane (West) - 400 601, Maharashtra, India
R&D Centre 2 :	Plot No.A-61, Main Road No.27, Wagle Industrial Estate, Thane (West) - 400 604, Maharashtra, India
R&D Centre 3 :	A-135, Road No.23, Wagle Industrial Estate, Thane (West) - 400 604, Maharashtra, India
R&D Centre 4 :	A-61, M.I.D.C. Area, Sinnar, Nasik - 422 103, Maharashtra, India
Factory 1 :	A-61/62, M.I.D.C. Area, Sinnar, Nasik - 422 103, Maharashtra, India
Factory 2 :	SORL, H-17, M.I.D.C, Satpur Area, Nasik, Maharashtra, India
Factory 3 :	Survey No.30, Pali, Vasind, Shahpur, Thane, Maharashtra, India
Factory 4 :	Plot No.B-5-13, SEZ, Pithampur, Dhar, Madhya Pradesh, India
Overseas Office :	Specialty Enzymes and Biotechnologies Co. 13591, Yorba Ave, Chino, California 91710 USA
Tel. No.:	+ 1-909-613-1660
Fax No.:	+ 1-909-613-1663
E-Mail :	adm@specialtyenzymes.com
Website :	www.specialtyenzymes.com

DIRECTORS

As on 31.03.2012

Name :	Mr. V.L. Rathi
Designation :	Chairman
Name :	Mr. C.L. Rathi
Designation :	Managing Director
Date of Birth/ Age :	57 Years
Qualification :	B. Tech (Hons) Chemical Engg. DBM
Experience :	34 Years
Date of Apportionment :	30.11.1992
Name :	S.C. Rathi
Designation :	Whole Time Director
Name :	Mr. M.M. Kabra
Designation :	Whole Time Director
Date of Birth/ Age :	40 Years
Qualification :	BE.(Chemical), Master of Science
Experience :	13 Years
Date of Apportionment :	01.09.2004
Name :	R.T. Mehta
Designation :	Director
Name :	Mr. Pradip Shah
Designation :	Director
Name :	P.K. Gupta
Designation :	Director
Name :	Mr. Kedar Desai
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Beni Prasad Rauka
Designation :	Chief Financial Officer and Company Secretary
Name :	Dr. Anil Kumar Gupta
Designation :	General Manager – Research and Development
Name :	Mr. Dipal Roda
Designation :	General Manager
Name :	Mr. Piyush Rathi
Designation :	General Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2012

Names of Shareholders	No. of Shares	Percentage of Holding
Shareholders holding more than 5% of the shares
Vasant L. Rathi	8942800	43.14%
Chandrakant Rathi Finance and Investment Company Private Limited	3621200	17.47%
Atharva Capital Ventures Private Limited	2522940	12.17%
Prabha V. Rathi	1283600	6.19%
Total	16370540	78.97%

BUSINESS DETAILS

Line of Business :	Subject is engaged in the business of manufacturing and sales of enzymes.
Products :	v Enzymes v Animal Feed v Micro Organism

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Actual Production Qty.
Enzymes	Kgs.	1,149,139
Animal Feed	Kgs.	1,096,754
Micro Organism	Kgs.	2,326
Others	Kgs.	331,667

Licenced Capacity - not applicable

Installed Capacity has not been disclosed as these are variable and subject to changes in product mix.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

v Citi Bank N.A.

v HDFC Bank Limited

v Yes Bank Limited

Facilities :

Secured Loans	31.03.2012 (Rs. in millions)		31.03.2011 (Rs. in millions)
	Long Term	Short Term	Long Term	Short Term
Term loans
From banks	264.204	0.000	269.163	0.000
Finance lease obligations	6.273	0.000	8.323	0.000
Loans repayable on demand
From banks	0.000	308.451	0.000	262.452
Total	270.477	308.451	277.486	262.452

Unsecured Loans	31.03.2012 (Rs. in millions)		31.03.2011 (Rs. in millions)
	Long Term	Short Term	Long Term	Short Term
Fixed deposits
From directors	1.365	8.846	8.846	1.365
From relatives of directors	2.300	8.035	8.035	2.150
From other shareholders	2.150	1.940	2.990	1.400
From others	0.680	0.710	1.060	0.210
Deferred sales tax payment liabilities	66.592	0.000	71.488	0.000
Loans from related parties	0.000	0.246	0.000	0.000
Total	73.087	19.777	92.419	5.125

Banking Relations :	--
Auditors :
Name :	Walker, Chandiok and Company Chartered Accountants
Address :	16^th Floor, Tower II, Indiabulls Finance Center, S.B. Marg, Elphiston (West), Mumbai – 400 013, Maharashtra, India
Subsidiaries :	v Advanced Bio-Agro Tech Limited v Advanced EnzyTech Solutions Limited v Advanced Bio Proteins Limited v Advanced Enzyme Far East Limited, Hong Kong v Advanced Enzymes USA, USA v Cal India Foods International, USA (Wholly owned subsidiary of Advanced Enzymes, USA w.e.f. 4^th April, 2011)
Other Related Parties (companies in which either of the directors or their relatives have significant influence) :	v Atharva Capital Ventures Private Limited v Chandrakant Rathi Financial and Investment Company Private Limited v Cal India Foods International (upto 3^rd April, 2011) v Advanced Vital Enzymes Limited v AST Enzymes v Rathi Properties LLC

CAPITAL STRUCTURE

As on 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
35000000	Equity Shares	Rs.10/- each	Rs.350.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
20731200	Equity Shares	Rs.10/- each	Rs.207.312 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		207.312	207.312	207.312
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		602.840	419.361	256.123
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		810.152	626.673	463.435
LOAN FUNDS
1] Secured Loans		578.928	539.938	251.325
2] Unsecured Loans		92.864	97.544	105.834
TOTAL BORROWING		671.792	637.482	357.159
DEFERRED TAX LIABILITIES		64.181	70.064	62.902
TOTAL		1546.124	1334.219	883.496
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		476.009	506.981	485.425
Capital work-in-progress		591.499	188.437	20.481
INVESTMENT		137.202	48.742	5.255
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	198.214	163.262	234.286
	Sundry Debtors	282.126	218.703	197.661
	Cash & Bank Balances	33.416	99.135	7.813
	Other Current Assets	0.886	0.020	0.000
	Loans & Advances	199.145	285.327	98.532
Total Current Assets		713.787	766.447	538.292
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	167.678	84.768	94.366
	Other Current Liabilities	148.732	64.924	48.385
	Provisions	55.963	26.696	23.206
Total Current Liabilities		372.373	176.388	165.957
Net Current Assets		341.414	590.059	372.335
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1546.124	1334.219	883.496

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Revenue from operations (net)	1129.512	1113.248	1070.160
		Other Income	35.752	14.612	7.529
		TOTAL (A)	1165.264	1127.860	1077.689
Less	EXPENSES
		Cost of materials consumed	395.469	401.319	864.045
		Changes in inventories of finished goods and work-in-progress	(38.566)	57.211
		Employee benefit expenses	126.426	107.342
		Other expenses	342.916	298.605
		Prior period items	0.237	0.000
		Loss of goods in transit	1.506	0.000
		TOTAL (B)	827.988	864.477	864.045
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		337.276	263.383	213.644
Less	FINANCIAL EXPENSES (D)		36.986	21.819	24.217
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		300.290	241.564	189.427
Less/ Add	DEPRECIATION/ AMORTISATION (F)		52.079	47.510	47.303
	PROFIT BEFORE TAX (E-F) (G)		248.211	194.054	142.124
Less	TAX (H)		40.638	18.728	32.431
	PROFIT AFTER TAX (G-H) (I)		207.573	175.326	109.693
Less	Short / (Excess) provision of Income Tax of earlier years		NA	0.000	0.541
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		395.537	232.298	228.104
Less	APPROPRIATIONS
		Interim Dividend	NA	0.000	10.366
		Proposed Dividend	NA	10.366	0.000
		Corporate Tax on Dividend	NA	1.721	1.761
		Issue of Bonus Shares	NA	0.000	92.831
	BALANCE CARRIED TO THE B/S		NA	395.537	232.298
	EARNINGS IN FOREIGN CURRENCY
		Export value of goods on FOB basis	508.772	419.957	286.923
		Other income	0.000	0.000	5.797
		Non operating income	4.158	1.604	0.717
	TOTAL EARNINGS		512.930	421.561	293.437
	IMPORTS
		Raw materials	116.975	136.569	232.378
		Components and spare parts	13.948	7.879	4.177
		Capital goods	18.878	35.786	0.245
	TOTAL IMPORTS		149.801	180.234	236.800
	Earnings Per Share (Rs.)		10.09	8.46	5.27

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	17.81	15.55	10.18
Net Profit Margin (PBT/Sales)	(%)	21.98	17.43	13.28
Return on Total Assets (PBT/Total Assets}	(%)	20.86	15.24	13.88
Return on Investment (ROI) (PBT/Networth)		0.31	0.31	0.31
Debt Equity Ratio (Total Liability/Networth)		1.29	1.30	1.13
Current Ratio (Current Asset/Current Liability)		1.92	4.35	3.24

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1) Year of Establishment	Yes
2) Locality of the firm	Yes
3) Constitutions of the firm	Yes
4) Premises details	No
5) Type of Business	Yes
6) Line of Business	Yes
7) Promoter’s background	Yes
8) No. of employees	No
9) Name of person contacted	No
10) Designation of contact person	No
11) Turnover of firm for last three years	Yes
12) Profitability for last three years	Yes
13) Reasons for variation <> 20%	--
14) Estimation for coming financial year	No
15) Capital in the business	Yes
16) Details of sister concerns	Yes
17) Major suppliers	No
18) Major customers	No
19) Payments terms	No
20) Export / Import details (if applicable)	No
21) Market information	--
22) Litigations that the firm / promoter involved in	--
23) Banking Details	Yes
24) Banking facility details	Yes
25) Conduct of the banking account	--
26) Buyer visit details	--
27) Financials, if provided	Yes
28) Incorporation details, if applicable	Yes
29) Last accounts filed at ROC	Yes
30) Major Shareholders, if available	Yes

BACKGROUND OF THE COMPANY:

The Company was incorporated on 15^th March, 1989. The Company is engaged in the business of manufacturing and sales of enzymes.

REVIEW OF OPERATIONS:

On consolidated basis, total net sales for FY 2012 was Rs.1717.400 millions as against Rs.1165.700 millions during FY 2011. The higher sale is mainly due to inclusion of net sales of Rs.540.100 millions of US based subsidiary Cal India Foods International doing business as Specialty Enzymes and Biotechnologies (SEB), acquired during the year.

On standalone basis, the Company posted total net sales of Rs.1129.500 millions as compared to Rs.1113.200 millions during FY 2011 and registered a growth of 1.46 % in spite of capacity constraints faced by the company for past 3 years.

The Company during the year focused on sale of its core manufactured products and gradually reduced sales of Non-Core Non-Enzyme products resulting in a very lower growth in sales. However the Company's exports have gone up to Rs.522.000 millions during FY 2012 from Rs.429.300 millions as compared to FY 2011, registering a growth of about 22% during FY 2012.

On consolidated basis , EBIDTA margin was about 38% during FY 2012 as against 23% during FY 2011 and PAT margin has increased to 20% during FY 2012 as against 14% during FY 2011, this could happen mainly due to acquisition of SEB.

On standalone basis, the Company has recorded a growth of 28% in its EBIDTA margin and 18% in its net profit after tax margin during the FY 2012 as compared to its FY 2011, this became possible due to the focused approach on core manufactured product sales, coupled with very heartening efforts of all the employees of the Company.

AWARDS AND RECOGNITION:

The Company has been recognized as "Star Export House" by Director General of Foreign Trade. Beside one of the patent of the Company had also got registered under "IPCT" in US Patent.

FUTURE OUTLOOK:

During the year "Advanced Enzymes U.S.A", a wholly owned subsidiary of the Company, acquired Cal India Foods International doing business as Specialty Enzymes and Biotechnologies (SEB), this acquisition enabled the Company to expand globally, on one parent entity concept. With this acquisition the Company had got a 100% subsidiary in USA with a step down subsidiary.

The Company had made consistent exports to European countries and with a view to provide better supply and services, it is in the process of putting up proper infrastructure at place in Europe and is also formed a wholly owned subsidiary in Netherlands "Advanced Enzymes Europe B.V.".

On the manufacturing capacity front, the Company has set up a fermentation facility of240m3 at SEZ, Indore, and the increased capacity will help the Company to manufacture and expand its export market.

Contingent liabilities and commitments

Particulars	31.03.2012 (Rs. in millions)
Claims against the company not acknowledged as debt	2.746
Other money for which the company is contingently liable	0.000
Estimated amount of contracts remaining to be executed on capital account and not provided for	6.025

FIXED ASSETS:

v Freehold Land

v Leasehold Land

v Buildings

v Plant and Equipment

v Furniture and Fixtures

v Vehicles

v Office Equipment

v Leasehold Improvements

v Computer

WEBSITE DETAILS:

NEWS:

ADVANCED ENZYMES TECHNOLOGIES OPENS PLANT IN INDORE

Advanced Enzymes, manufacturer of industrial enzymes, has set up an ultra-modern manufacturing facility near Indore. The state-of-the-art plant has been built with an investment of over Rs.600.000 millions and incorporates the topmost technological innovations available in the enzyme industry globally.

The new plant, spread over 38400 sq. mt, has the potential of providing employment to over 100 people, directly or indirectly. The new plant has enabled Advanced Enzymes to treble its fermentation capacity from 120 cu mt to 400 cu mt. The facility is also indigenously designed in such a way, that a further fermentation capacity of 600 cu mt can be added up in the same plant with minimal incremental investment in the near future.

C L Rathi, Managing Director, Advanced Enzymes said, “The new facility will help us cater to various industries and increase our global foot print. With the new plant in place, Advanced Enzymes expects to meet the growing demand for its products globally. As such 65 per cent of its total revenues are already generated from its international operations and this figure is expected to grow still higher in the near future.”

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.55.37
UK Pound	1	Rs.85.95
Euro	1	Rs.67.87

INFORMATION DETAILS

Report Prepared by :

SMN

SCORE & RATING EXPLANATIONS

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