MIRA INFORM REPORT

Report Date :

21.05.2012

IDENTIFICATION DETAILS

Name :	MEGHMANI FINECHEM LIMITED
Registered Office :	CH/1, CH/2, GIDC Industrial Estate, Dahej, Tal. Vagra, Bharuch- 392130 Gujarat
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	11.09.2007
Com. Reg. No.:	04-051717
Capital Investment/ Paid-up Capital:	Rs.615.500 Millions
CIN No.: [Company Identification No.]	U24100GJ2007PLC051717
TAN No.: [Tax Deduction & Collection Account No.]	BRDM02927B
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacture and distribute Caustic Soda lye, Caustic Soda Flakes, Chlorine, Hydrogen Gas, Hydrocloric acid, Sodium Hypochlorite and Dilute Sulphuric Acid. Generate power for its captive consumption for caustic Division.
No. of Employees:	Not Divulged by the Management

RATING & COMMENTS

MIRA’s Rating :

B(26)

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

Maximum Credit Limit :	USD 52970000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. There appear huge accumulated losses recorded by the company. 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 cautions.

NOTES:

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

INFORMATION DECLINED BY

Name :	Mr. Sanjay
Designation :	Accounts Manager
Contact No.:	Not Available
Date :	17.05.2012

LOCATIONS

Registered Office :	CH/1, CH/2, GIDC Industrial Estate, Dahej, Tal. Vagra, Bharuch- 392130 Gujarat, India
Tel. No.:	91-2642-256677
Fax No.:	Not Available
E-Mail :	kamlesh.mehta@meghmani.com helpdesk@meghmani.com
Website :	www.meghamani.com
Factory:	Post Dahej, Vagara, Bharuch -392140, Gujarat, India

DIRECTORS

As on 30.06.2011

Name :	Mr. Jayantilal Patel
Designation :	Director
Address :	“Kruti” – L – 18/359, Satygrah Chhavani, Society, Satelite, Ahemdabad – 380015, Gujarat, India
Date of Birth/Age :	01.03.1952
Date of Appointment :	11.09.2007
Din No.:	00027224
Name :	Mr. Ashish Soparkar
Designation :	Director
Address :	L-13/246, Satygrah Chhavani, Society, Satelite, Ahemdabad – 380015, Gujarat, India
Date of Birth/Age :	25.12.1952
Date of Appointment :	11.09.2007
Din No.:	00027480
Name :	Mr. Natwarlal Patel
Designation :	Director
Address :	6 B ashok Vatika No.1 Opposite Ekta Farm, Bodkdev, Ahemdabad – 380058, Gujarat, India
Date of Birth/Age :	01.06.1953
Date of Appointment :	11.09.2007
Din No.:	00027540
Name :	Mr. Rameshbhai Patel
Designation :	Director
Address :	54, Shrinath Society B/h Manekbaug, Ahemdabad – 380015, Gujarat, India
Date of Birth/Age :	01.06.1956
Date of Appointment :	11.09.2007
Din No.:	00027637
Name :	Mr. Anand Patel
Designation :	Director
Address :	54, Shrinath Society B/h Manekbaug, Ahemdabad – 380015, Gujarat, India
Date of Birth/Age :	07.09.1962
Date of Appointment :	11.09.2007
Din No.:	00027836
Name :	Mr. Chinubhai Ramanlal Shah
Designation :	Director
Address :	402, Heritage Residency, B/h Prahladnagar Garden, S G Highway, Ahemdabad – 380015, Gujarat, India
Date of Birth/Age :	04.06.1937
Date of Appointment :	25.03.2009
Din No.:	00558310
Name :	Mr. Balkrishna Tulsidas Thakkar
Designation :	Director
Address :	L -14/265, Satygrah Chhavani, Society, Satelite, Ahemdabad – 380015, Gujarat, India
Date of Birth/Age :	13.10.1946
Date of Appointment :	25.03.2009
Din No.:	00430220

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2011

Names of Shareholders	No. of Shares
Meghmani Finechem Limited	35182333
Jayantilal Patel	550100
Ashish Soparkar	825100
Natwarlal Patel	850100
Rameshbhai Patel	550100
Anand Patel	852600
Maulik Jaynthibahi Patel	1650100
Deval Ashish Soparkar	137600
Ankit Natwarlal Patel	1400100
Karna Rameshbhai Patel	440100
Darshan Anandbhai Patel	82600
Taraben Jaynthibahi Patel	275000
Kruti Jaynthibahi Patel	275000
Nayana Ashish Soparkar	275000
Ruchi Ashish Soparkar	137500
Kaushal Ashish Soparkar	1375000
Bhartiben Natwarlal Patel	200000
Disha Natwarlal Patel	300000
Kalpanaben Rameshbhai Patel	385000
Vaishakhi Rameshbhai Patel	275000
Nayana Anandbhai Patel	82500
Chintan Anandbhai Patel	82500
International Finance Corporation	15366666
	61549999

As on 30.06.2011

Equity Shares break up

Category	Percentage
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	24.97
Bodies corporate	57.16
Directors or relatives of directors	17.87
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacture and distribute Caustic Soda lye, Caustic Soda Flakes, Chlorine, Hydrogen Gas, Hydrocloric acid, Sodium Hypochlorite and Dilute Sulphuric Acid.

Generate power for its captive consumption for caustic Division.

Products :

Item Code No.	Product Description
3008	Caustic Soda

PRODUCTION STATUS As on 31.03.20011

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Caustic Soda	MT	201,600	119,000	89,265
Chlorine Gas	MT	178,620	105,435	79,089
Hydrogen Gas	‘000 NM	56,448	33,320	24,994
Hydrochloric Acid	MT	69,120	40,800	16,423
Sodium Hypochlorite	MT	16,200	9,563	1,807
Captive Power Plant	MW	378,000	336,000	263,363

GENERAL INFORMATION

No. of Employees :

Not Divulged by the Management

Bankers :

· ICICI Bank Limited, J M C House, Opposite Parimal Garden, Ambawadi, Ahemdabad – 3800009, Gujarat, India

· Standard Chartered Bank, Abhijeet II Ground Floor, Near Mithakali Six Roads, Ahmedabad - 380006 Gujarat, India

Facilities :

Rs.in Millions

SECURED LOAN	31.03.2011	31.03.2010
Rupee term loans banks secured	2415.403	2773.240
Foreign currency loans financial institutions secured	891.900	898.000
Working capital loans secured	208.408	119.280
Total	3515.711	3790.520
SECURED LOAN	31.03.2011	31.03.2010
Working capital loans unsecured	300.000	0.000

Banking Relations :	--
Auditors :
Name :	Patel and Khandwala
Address :	202, Akik Building, Mithakhali, Ahmedabad, Gujarat, India
Pan No.:	AAEFP0241L
Holding Company :	Meghmani Organics Limited CIN No.: L24110GJ1995PLC024052

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
75000000	Equity Share	Rs.10/- each	Rs.750.000 Millions
2500000	Preferences Shares	Rs.100/-each	Rs.250.000 Millions
Total			Rs.1000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
61549999	Equity Share	Rs.10/- each	Rs.615.500 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		615.500	615.500	615.500
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1229.999	1229.999	1230.000
4] (Accumulated Losses)		(521.307)	(302.448)	0.000
NETWORTH		1324.192	1543.051	1845.500
LOAN FUNDS
1] Secured Loans		3515.711	3790.520	3609.442
2] Unsecured Loans		300.000	0.000	0.000
TOTAL BORROWING		3815.711	3790.520	3609.442
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		5139.903	5333.571	5454.942
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		4391.740	4788.940	317.809
Capital work-in-progress		97.927	4.687	4257.880
INVESTMENT		0.010	0.010	404.164
DEFERREX TAX ASSETS		254.382	155.328	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	111.923	52.060	15.401
	Sundry Debtors	226.707	94.848	0.000
	Cash & Bank Balances	50.987	11.717	81.679
	Other Current Assets	4.986	1.697	0.000
	Loans & Advances	301.602	476.100	720.111
Total Current Assets		696.205	636.422	817.191
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	194.416	151.617	310.358
	Other Current Liabilities	105.166	99.417	31.574
	Provisions	0.779	0.782	0.170
Total Current Liabilities		300.361	251.816	342.102
Net Current Assets		395.844	384.606	475.089
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		5139.903	5333.571	5454.942

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	1736.160	848.841	848.841
		Other Income	5.640	26.675	26.674
		TOTAL (A)	1741.800	875.516	875.515
Less	EXPENSES
		Consumption material changes in inventories	998.774	550.423
		Manufacturing Service Cost	80.802	55.368
		Contract Cost	34.615	24.556
		Employee related expenses	60.772	43.608
		Administrative selling other expenses	51.737	44.452
		TOTAL (B)	1226.700	718.407	716.387
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		515.100	157.109	159.128
Less	FINANCIAL EXPENSES (D)		374.226	269.353	271.372
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		140.874	(112.244)	(112.244)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		461.050	323.478	323.479
	Exceptional Income		2.803	(22.053)	(22.053)
	PROFIT/ LOSS BEFORE TAX (E-F) (G)		(317.373)	(457.775)	(457.776)
Less	TAX (H)		(98.513)	(155.328)	(155.328)
	PROFIT/LOSS AFTER TAX (G-H) (I)		(218.860)	(302.447)	(302.448)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(302.447)	NA	NA
	BALANCE CARRIED TO THE B/S		(521.307)	NA	NA
	Earnings Per Share (Rs.)		(3.56)	(4.91)	(4.91)

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	(12.57)	(34.55)	(34.55)
Net Profit Margin (PBT/Sales)	(%)	(18.28)	(53.93)	(53.93)
Return on Total Assets (PBT/Total Assets}	(%)	(6.24)	(8.44)	(40.33)
Return on Investment (ROI) (PBT/Networth)		(0.24)	(0.30)	(0.25)
Debt Equity Ratio (Total Liability/Networth)		3.11	2.62	2.14
Current Ratio (Current Asset/Current Liability)		22.93	2.53	2.39

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report [Yes/No]
Year of Establishment	Yes
Locality of the Firm	Yes
Construction of the firm	Yes
Premises details	No
Type of Business	Yes
Line of Business	Yes
Promoters background	Yes
No. of Employees	No
Name of Person Contacted	Yes
Designation of contact person	Yes
Turnover of firm for last three years	Yes
Profitability for last three years	Yes
Reasons for variation <> 20%	-
Estimation for coming financial year	No
Capital the business	Yes
Details of sister concerns	Yes
Major Suppliers	No
Major Customers	No
Payment Terms	No
Export / Import Details [If Applicable]	No
Market Information	-
Litigations that the firm / promoter involved in	-
Banking Details	Yes
Banking Facility Details	Yes
Conduct of the banking account	-
Buyer visit details	-
Financials, if provided	Yes
Incorporation details, if applicable	Yes
Last accounts filed at ROC	Yes
Major Shareholders, if applicable	Yes

SUNDRY CREDTIORS DETAILS:

Particular	31.03.2011	31.03.2010	31.03.2009
Creditors due small micro enterprises	2.448	0.905	0.000
Creditors due others	191.668	150.711	0.000
Other Creditor	0.000	0.000	310.358
Total	194.116	151.616	310.358

OPERATIONS:-

This being the first full year of operation the Company has achieved Net Sales of Rs.1736.16 Millions. This increase in revenue is attributable to optimum level of Power Generation. The macro factors also helped and the prices of Caustic Chlorine also moved upward from November 2010 till 31st March 2011. This contribution helped the Company to reduces its loss by Rs.115.55 Millions.

The directors expect that if the price of Caustic Chlorine is maintained at this level the Company will be in a position to earn more revenue in the next full year of operation.

PRODUCTION:-

During the period, the Company could operate the plant between 95%-100% capacity utilization as against significantly lower average production levels that they have achieved in the past. Because of the higher production they were able to run the flaking unit at the desired capacity level and this has also improved the overall contribution because of a better product mix.

EXPANSION:-

They are planning to do a de-bottlenecking exercise so as to make the total plant capacity at the level of 476 TPD as under:

Since all their utilities and support infrastructure are designed for operating the plant at 476 TPD, they propose to increase the capacity of manufacturing Caustic Chlorine up to 476 TPD by purchasing certain additional balancing equipments at an outlay of around Rs.180.000 Millions

The current power plant capacity is 40 MW. However, if the plant has to operate at the level of 476 TPD, they will need to increase the power plant capacity by further 20 MW and accordingly they are planning to increase the power plant capacity by 20 MW at an approximate outlay of around Rs.700.000 Millions

Contingent Liability

In Respect of Bank Guarantee Rs.34.579 Millions

Bankers Charges Report as per Registry

Corporate identity number of the company	U24100GJ2007PLC051717
Name of the company	MEGHMANI FINECHEM LIMITED
Address of the registered office or of the principal place of business in India of the company	CH/1, CH/2, GIDC Industrial Estate, Dahej, Tal. Vagra, Bharuch- 392130 Gujarat, India Email: kamlesh.mehta@meghmani.com
This form is for	Creation of charge
Type of charge	· Book debts · Movable property (not being pledge) · Floating Charge · Others
Particular of charge holder	Standard Chartered Bank, Abhijeet II Ground Floor, Near Mithakali Six Roads, Ahmedabad - 380006 Gujarat, India Email: shivan.umashankar@sc.com
Nature of instrument creating charge	Unattested Memorandum of Hypothecation
Date of instrument Creating the charge	16.02.2012
Amount secured by the charge	Rs.765.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest: The rate of interest on each utilisation will be at Bank's margin of 280 bps per annum added to three months LIBOR/the cost of funds to the Bank for the period of the utilisation Terms of Repayment Repayment will be made on each repayment date with an amount which reduces the base currency amount of the outstanding aggregate Utilization by an amount equal to 7.143% in 14 quarterly installments after a moratorium of 21 months from the date of first disbursement (1st installment will become due in 21st month from the date of drawdown) of all Utilizations borrowed by the Borrower as at close of business in London on the last day of the Availability period Margin 280 bps per annum added to three months LIBOR/the cost of funds to the Bank for the period of the utilisation. Extent and Operation of the charge The Bank is having first pari-passu charge by way of hypothecation of all moveable fixed assets of the Borrower (both present and future) including without limitation its all moveable plant and machinery and Second pari-passu charge by way of hypothecation over current assets (both present and future) of the Borrower as more specifically described under Schedule of the attached Unattested Memorandum of Hypothecation. Others: The security by way of hypothecation has been created in f/o the Bank for securing the ECB facility to the extent of USD 15 Mio. granted to Meghmani Finechem Ltd. For the purpose of filing Form 8, it is clarified that Facility Amount is repayable in USD, hence any repayment from sale/enforcement proceeds of abovesaid assets shall be made at prevailing foreign currency exchange rate, for conversion from Indian Rupees to USD at the time of repayment to ensure full repayment of the Facility Amount.
Short particulars of the property charged (Including location of the property)	· First pari-passu charge on all present and future moveable fixed assets of the Company including without limitation its moveable plant and machinery etc. · Second pari-passu charge on all present and future book debts, outstanding moneys receivables, claims and bills etc. · Second pari-passu charge on all present and future stock in trade consisting of raw materials , finished goods, goods in process of manufacturing etc..

FIXED ASSETS

· Lease hold Land

· Building

· Plant and Machinery

· Capital Power Plant and Machinery

· Furniture and Fittings

· Vehicles

· Other Equipments

Intangible Assets

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.54.88
UK Pound	1	Rs.86.47
Euro	1	Rs.69.49

INFORMATION DETAILS

Information Gathered by :	PJA
Report Prepared by :	BYI

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		27

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.