MIRA INFORM REPORT

Report Date :

19.05.2012

IDENTIFICATION DETAILS

Name :	SARAF CHEMICALS LIMITED (w.e.f 20.7.1984)
Formerly Known As :	SARAF CHEMICALS PRIVATE LIMITED
Registered Office :	501/ 502, Waterford Building, ‘C’ Wing, C.D. Barfiwala Marg (Juhu Lane), Andheri (West), Mumbai – 400 058, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	20.07.1984
Com. Reg. No.:	11-033486
Capital Investment / Paid-up Capital :	Rs. 63.100 Millions
CIN No.: [Company Identification No.]	U24100MH1984PLC033486
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer of Chemicals and Dyes.
No. of Employees :	200 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (54)

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

Maximum Credit Limit :	USD 760000
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.

NOTES :

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

INFORMATION PARTED BY (GENERAL DETAILS)

Name :	Mr. Kirit
Designation :	Finance
Contact No.:	91-22-42184218
Date :	17.05.2012

LOCATIONS

Registered Office/ Corporate Office :	501/ 502, Waterford Building, ‘C’ Wing, C.D. Barfiwala Marg (Juhu Lane), Andheri (West), Mumbai – 400 058, Maharashtra, India
Tel. No.:	91-22-42184218
Fax No.:	91-22-42184350
E-Mail :	acct@sarex.com sarex@vsnl.com sales@saraf.global.net.in
Website :	http://www.sarex.com
Location:	Owned
Factory :	Plot No. N 129, N130, N131, N132, N232, MIDC, Tarapur – 401 506, Maharashtra, India

DIRECTORS

As on 16.09.2011

Name :	Mr. Ashok Mahavirprasad Saraf
Designation :	Whole Time Director
Address :	“Kiran” Plot No. 12, N S Road – 8, JVPD Scheme, Mumbai – 400 049, Maharashtra, India
Date of Birth/Age :	18.03.1956
Date of Appointment :	20.07.1984
DIN No.:	01627873
Name :	Mr. Naresh Mahavirprasad Saraf
Designation :	Whole Time Director
Address :	“Kiran” Plot No. 12, N S Road – 8, JVPD Scheme, Mumbai – 400 049, Maharashtra, India
Date of Birth/Age :	11.06.1957
Date of Appointment :	31.12.1984
DIN No.:	00479251
Name :	Mr. Prakash Mahavirprasad Saraf
Designation :	Whole Time Director
Address :	“Kiran” Plot No. 12, N S Road – 8, JVPD Scheme, Mumbai – 400 049, Maharashtra, India
Date of Birth/Age :	17.09.1962
Date of Appointment :	31.12.1984
DIN No.:	00479252
Name :	Mr. Naresh S. Salgiya
Designation :	Director
Address :	Building No.16, Flat No.201, Saibaba Nagar, Boisar – 401 501, Maharashtra, India
Date of Birth/Age :	09.12.1957
Date of Appointment :	06.11.2007
DIN No.:	01914141

KEY EXECUTIVES

Name :	Mr. Kirit
Designation :	Finance

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 16.09.2011

Names of Shareholders	No. of Shares
Mahavirprasad G. Saraf	900000
Ashok M. Saraf	280000
Ashok M. Saraf (HUF)	1110000
N. A. Trust, India	125000
Dr. Naresh M. Saraf Jointly with Renu N. Saraf	280000
Naresh M Saraf HUF in the name of Karta NMS	838500
Priyanka Trust in the name of trustee NMS	90000
Shilpa P. Saraf Jointly with PMS	124000
Niharika Trust in the name of trustee NMS	188500
Prakash M. Saraf Jointly with Shilpa	280000
Prakash M. Saraf HUF in the name of Karta pms	686000
Neera A. Saraf Jointly with Ashok M Saraf	185000
Renu N. Saraf jointly with Naresh M Saraf	303000
Yash Trust In the name trustee PMS, India	334000
Aashna Trust in the name of trustee PMS, India	276000
Real GEM Building Private Limited, India	310000
Total	6310000

Equity Share Break up (Percentage of Total Equity)

As on 16.09.2011

Category	Percentage
Bodies corporate	4.91
Directors or relatives of Directors	95.09
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Chemicals and Dyes.

Products :

Item Code No. (ITC Code)	3204
Product Description	Synthetic Organic Coloring Matter, Finishing Agents
Item Code No. (ITC Code)	3809
Product Description	Dyes

Exports :

Products :

· Dyestuff

· Textile

· Fine

· Pharma Chemicals

Countries :

· Sri Lanka

· Nigeria

· USA

· Thailand

Terms :

Selling :

L/C Cash and Credit (30 Days)

Purchasing :

L/C Cash and Credit (30 Days)

PRODUCTION STATUS As on 31.03.2011

Particulars	Unit	Installed Capacity	Actual Production
Chemicals	Kgs.	6600000	6087657
Dyes	Kgs.	300000	68566

GENERAL INFORMATION

Customers :

· Wholesalers

· Retailers

No. of Employees :

200 (Approximately)

Bankers :

· Indian Overseas Bank, Mumbai Worli Branch, Kakad Chamber 132, A B Road, Worli Mumbai – 400 018, Maharashtra, India

· 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

· Bank of Baroda, Worli Branch office No. 13, Vaswani Chambers, Opp. Old Pass Port office, Dr. A.B. Road, Worli, Mumbai – 400030, Maharashtra, India

Facilities :

(Rs. in Millions)

Secured Loan	As on 31.03.2011	As on 31.03.2010
Non-convertible debentures secured	50.000	50.000
Rupee term loans banks secured	264.911	347.938
Rupee term loans others secured	201.797	152.776
Loans taken for vehicles secured	0.690	1.571
Total	517.398	552.285
Unsecured Loan	As on 31.03.2011	As on 31.03.2010
Deferred sales tax loan unsecured	42.668	42.668
Other debt unsecured	0.000	5.000
Total	42.668	47.668

Banking Relations :	--
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Address :	12, Dr, Annie Besant Road, Opposite Shiv Sagar Estate, Worli, Mumbai – 400 018, Maharashtra, India
PAN.:	AACFD4815A
Subsidiaries :	Quexst Solutions Private Limited CIN No.: U72200PN2004PTC019775

CAPITAL STRUCTURE

As on 31.11.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.10/- each	Rs.100.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
6310000	Equity Shares	Rs.10/- each	Rs. 63.100 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		63.100	60.000	60.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		128.480	72.976	74.482
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		191.580	132.976	134.482
LOAN FUNDS
1] Secured Loans		517.398	552.285	485.495
2] Unsecured Loans		42.668	47.668	42.668
TOTAL BORROWING		560.066	599.953	528.163
DEFERRED TAX LIABILITIES		45.465	49.941	42.657
TOTAL		797.111	782.870	705.302
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		707.480	697.183	449.876
Capital work-in-progress		0.867	6.506	171.392
INVESTMENT		7.383	7.347	7.347
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	76.753	73.697	60.598
	Sundry Debtors	218.989	290.058	192.993
	Cash & Bank Balances	3.241	4.945	4.816
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	73.541	60.746	61.230
Total Current Assets		372.524	429.446	319.637
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	263.982	333.979	171.623
	Other Current Liabilities	20.603	17.576	65.927
	Provisions	6.558	6.057	5.400
Total Current Liabilities		291.143	357.612	242.950
Net Current Assets		81.381	71.834	76.687
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		797.111	782.870	705.302

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	889.018	843.665	708.998
		Other Income	9.245	5.764	7.730
		TOTAL (A)	898.263	849.429	716.728
Less	EXPENSES
		Consumption material changes inventories	627.459	585.252
		Manufacturing services costs	42.643	42.057
		Employee related expenses	55.487	49.716
		Administrative selling other expenses	74.509	72.583
		TOTAL (B)	800.098	749.608	629.109
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		98.165	99.821	87.619
Less	FINANCIAL EXPENSES (D)		53.186	58.058	48.978
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		44.979	47.763	38.641
Less/ Add	DEPRECIATION/ AMORTISATION (F)		34.824	29.352	19.327
	PROFIT BEFORE TAX (E-F) (G)		10.155	12.411	19.314
Less	TAX (H)		(2.528)	10.419	12.405
	PROFIT AFTER TAX (G-H) (I)		12.683	1.992	6.909
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		3.723	5.229	3.783
Less	APPROPRIATIONS
		Transfer to General Reserve	3.155	3.000	3.000
		Tax on Dividend	0.524	0.498	0.463
		Debenture Redemption Reserve	0.500	0.000	2.000
	BALANCE CARRIED TO THE B/S		12.227	3.723	5.229
	EARNINGS IN FOREIGN CURRENCY
		Export of Goods FOB (cash basis)	391.352	381.611	264.426
	TOTAL EARNINGS		391.352	381.611	264.426
	IMPORTS
		Raw Materials	60.755	78.647	70.627
	TOTAL IMPORTS		60.755	78.647	70.627
	Earnings Per Share (Rs.)		2.06	0.33	1.31

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	1.41	0.24	0.96
Net Profit Margin (PBT/Sales)	(%)	1.14	1.47	2.72
Return on Total Assets (PBT/Total Assets}	(%)	2.73	2.89	6.04
Return on Investment (ROI) (PBT/Networth)		0.05	0.09	2.51
Debt Equity Ratio (Total Liability/Networth)		1.52	2.69	1.81
Current Ratio (Current Asset/Current Liability)		1.28	1.20	1.32

LOCAL AGENCY FURTHER INFORMATION

Details of Sundry Creditors:

Particulars	31.03.2011 (Rs. in millions)	31.03.2010 (Rs. in millions)	31.03.2009 (Rs. in millions)
Sundry Creditors
- Dues of Micro, small and medium enterprises	0.000	0.000	0.000
- Other than Micro, small and medium enterprises	263.982	333.979	171.623

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	Yes
5) Type of Business	No
6) Line of Business•	Yes
7) Promoter’s background	Yes
8) No. of employees	Yes
9) Name of person contacted	Yes
10) Designation of contact person	Yes
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	Yes
19) Payments terms	Yes
20) Export / Import details (if applicable)	Yes
21) Market information	--
22) Litigations that the firm / promoter	--
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

Note: Registered office of the company has been shifted from 201, Kakad Chambers, 2^nd Floor, 132, Dr. Annie Besant Road, Worli, Mumbai - 400 018, Maharashtra, India to the present address w.e.f 24.08.2009.

OPERATIONS:

TURNOVER

The turnover during the year is Rs.961.786 Millions as against Rs.902.551 Millions in the previous year. Indicating a growth of 6.55% over the previous year. The division wise sales are discussed below.

TEXTILE CHEMICALS AND DYES

Turnover of Textile chemicals is Rs. 635.973 Millions as against Rs.585.465 Millions in the previous year indicating an increase of 8.76% % over the previous year. The year was very challenging as higher cotton prices and commodity prices impacted the demand. The Company is only chemical Company in India having Marck and Spencer UK accredation for Textile Rand D Center. With the New Rand D Center, the Company will able to focus on exports market and boost the confidence of customers and provide assurance on quality of products. Turnover of Disperse Dyes is Rs.35.641 Millions as against Rs.18.821 Millions in the previous year an increase of 89.36%.

FINE CHEMICALS and BULK INTERMEDIATES

The turnover of Fine Chemicals and Bulk Intermediates have remained to Rs.2901.72 lacs as against Rs.298.265 Millions in last year. The production of fine chemicals got impacted due to two months shutdown taken in production line for installation of new equipments and modification of set up which can increase prductivity in the years to come. The Company was successful in reducing the material cost though yield improvement and solvent recovery for the key products and now all the thrust is on cost reduction. The outlook for FY 2011-2012 is better.

EXPANTION CUM MODERNISATION OF FINE CHEMICALS AND PHARMA INTERMIDIATE MANUFACTURING FACILITY

Major consolidation of project under manual operating mode is completed in last year whereas the second phase with automation covering PLC, SCADA and Technology up gradation is also successfully done. The directors are proud to convey that all the manufacturing set up is accredited with ISO 14001 in the year under review.

EXPORTS

Exports during the year amounted to Rs.391.352 Millions as against Rs.381.614 Millions in the previous year. The volatility in Euro and Dollor impacted the realisation. The Company has started hedging the exports. The exports will drastically improve in next year as company is having export orders well in avance at the begnining of the year.

RAND D CENTRE

The Directors are pleased to inform that state of Art Rand D centre is created to carryout experiments and develop new molecules in house right from literature search. Ultramodern equipments and other infrastructures created to strengthen various developmental activities. RandD has played key role in reducting cost of key products and developed new products.

NEW DEVELOPMENT LABORATORY

The Directors are pleased to inform about succesfull commissioning of the new development Marks and Spancer -UK Aprroved Lab for textile application, which will boost the company's imageand intrinsic strength.

.

CONTINGENT LIABILITIES:

Particulars	31.03.2011 (Rs. in millions)
Bank Guarantee	31.588
Disputed Income Tax demand	16.668
Disputed ESIC demand	1.172
2.120Other contractual matters	2.120

BANKERS CHARGES REPORT AS PER REGISTRY

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	501/ 502, Waterford Building, ‘C’ Wing, C.D. Barfiwala Marg (Juhu Lane), Andheri (West), Mumbai – 400 058, Maharashtra, India Email: sarex@vsnl.com
This form is for	Modification of charge
Charge identification (ID) number of the charge to be modified	10122980
Type of charge	Immovable property
Particular of charge holder	Bank of Baroda, Worli Branch office No. 13, Vaswani Chambers, Opp. Old Pass Port office, Dr. A.B. Road, Worli, Mumbai – 400030, Maharashtra, India Email: shirishshetye@gmail.com
Nature of instrument creating charge	Supplemental Memorandum of Entry.
Date of instrument Creating the charge	27.12.2011
Amount secured by the charge	Rs. 192.300 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest Interest to be charged as per sanction/review of the account from time to time. Terms of Repayment As per sanction. Margin As per sanction. Extent and Operation of the charge The charge is modified to secure the due repayment, discharge and redemption by the Company to the Bank of its Term Loan (1) of Rs.72.500 Millions, Term Loan (2) of Rs.9.800 Millions and Corporate Term Loan of Rs.110.000 Millions, aggregating to Rs.192.300 Millions together with interest, compound interest, and /or additional interest in case of default, penal interest, liquidated damages, commitment charges, premia on prepayment or on redemption, costs, charges, expenses and other moneys payable by the Company to the Bank.
Short particulars of the property or asset(s) charged (including complete address and location of the property)	Office Premises No.501 admeasuring 4078 sq. ft. on 5th floor C Wing in the building known as Waterford bearing CTS No.548A and 548B of Village Vile Parle, Andheri, Mumbai owned by Sarex Chemicals (a division of Saraf Chemicals Limited.) and Office Premises No.502 admeasuring 3122 sq. ft. on 5th floor C Wing in the building known as Waterford bearing CTS No.548A and 548B of Village Vile Parle, Andheri, Mumbai owned by Sarex Chemicals (a division of Saraf Chemicals Limited.) both together with fixed plants and machinery, fixtures and fittings, constructed, erected or installed thereon.
Date of instrument modifying the charge	06.11.2009
Particulars of the present modification	The charge is increased upto Rs.192.300 Millions to cover Term Loan (1) of Rs.72.500 Millions (Reduced from Rs.130.400 Millions), Term Loan (2) of Rs.9.800 Millions (Reduced from Rs.15.000 Millions) and Corporate Term Loan of Rs.110.000 Millions (Fresh).

FIXED ASSETS:

· Leasehold Land

· Buildings

· Plant and Machinery

· Furniture and Fixtures

· Office Equipments

· 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 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.54.87
UK Pound	1	Rs.86.46
Euro	1	Rs.69.48

INFORMATION DETAILS

Information Gathered by :	PJA
Report Prepared by :	KVT

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	NO
--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	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.