MIRA INFORM REPORT

Report Date :

16.03.2013

IDENTIFICATION DETAILS

Name :	PALADIN PAINTS AND CHEMICALS PRIVATE LIMITED

Registered Office :	Unit No.204, Monarch Chambers, Marol Maroshi Road, Marol Naka, Andheri (East), Mumbai – 400 059, Maharashtra

Country :	India

Financials (as on) :	31.03.2012

Date of Incorporation :	30.03.2007

Com. Reg. No.:	11-169427

Capital Investment / Paid-up Capital :	Rs.49.000 millions

CIN No.: [Company Identification No.]	U24220MH2007PTC169427

TAN No.: [Tax Deduction & Collection Account No.]	MUMP23844C

PAN No.: [Permanent Account No.]	AAECP2340R

Legal Form :	Private Limited Liability Company

Line of Business :	Manufacturer of Paints and Paints Related Materials.

No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

B (27)

RATING

STATUS

PROPOSED CREDIT LINE

26-40

Capability to overcome financial difficulties seems comparatively below average.

Small

Maximum Credit Limit :	USD 101000

Status :	Moderate

Payment Behaviour :	Slow

Litigation :	Clear

Comments :	Subject is an established company having moderate track record. Profitability of the company appears to be under pressure. There appear some accumulated losses recorded by the company. However, 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 – June 30, 2012

Country Name

Previous Rating

(31.03.2012)

Current Rating

(30.06.2012)

India

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

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country’s growth, which has averaged more than 7% per year since 1997. India’s diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India’s output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis – in large part because of strong domestic demand – and growth exceeded 8% year-on-year in real terms. However, India’s economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government’s fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India’s medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office :	Unit No.204, Monarch Chambers, Marol Maroshi Road, Marol Naka, Andheri (East), Mumbai – 400 059, Maharashtra, India
Tel. No.:	91-22-29202587/ 29206258
Fax No.:	91-22-29254386
E-Mail :	vanaprabha@vsnl.com
Website :	www.resinsindia.com

Factory :	43, Kumbhivali, Savroli-Kharpada Road, District Raigad – 410 202, Maharashtra, India
Tel. No.:	91-2192-274206/ 282516/ 282517/ 282518/ 282510
Fax No.:	91-2192-274205

DIRECTORS

As on 28.09.2012

Name :	Mr. Prasad Jayram Nadkarni
Designation :	Whole Time Director
Address :	Mangesh Ashram, 13, Ajmal Road, Vile Parle (East), Mumbai – 400 057, Maharashtra, India
Date of Birth/Age :	22.02.1960
Date of Appointment :	07.04.2007
DIN No.:	01228205

Name :	Mr. Jairam Mangesh Nadkarni
Designation :	Director
Address :	Mangesh Ashram, 13, Ajmal Road, Vile Parle (East), Mumbai – 400 057, Maharashtra, India
Date of Birth/Age :	03.06.1926
Date of Appointment :	30.03.2007
DIN No.:	01228399

Name :	Mrs. Radhika Prasad Nadkarni
Designation :	Director
Address :	Mangesh Ashram, 13, Ajmal Road, Vile Parle (East), Mumbai – 400 057, Maharashtra, India
Date of Birth/Age :	05.08.1965
Date of Appointment :	30.03.2007
DIN No.:	01228482

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 28.09.2012

Names of Shareholders (Equity Shares)		No. of Shares
Prasad Jayram Nadkarni		503
Radhika Prasad Nadkarni		3750
Nandkishore Shamrao Laud		500
Jairam Mangesh Nadkarni		4250
Gautam Sabaji Chitnis		500
Shubha Sabaji Chitnis		500
Jairam Mangesh Nadkarni jointly with Radhika Prasad Nadkarni		44600
Prasad Jayram Nadkarni jointly with Radhika Prasad Nadkarni		48347
Radhika Prasad Nadkarni jointly with Prasad Jayram Nadkarni		387050
Sandeep R. Shah jointly with Srilaxmi S. Shah		470784
Total		960784

As on 28.09.2012

Names of Shareholders (Non Cumulative Redeemable Preference Shares)		No. of Shares
Sandeep Shah jointly with Abhilasha Shah jointly with Srilaxmi Shah		1
Sandeep R. Shah jointly with Gaurang Shah jointly with Sameer Shah jointly with Deversons Industries Private, India		1
Deversons Industries Private, India		1
Amrish B. Parikh		1
Kumar Dyes through its Partners		1
Total		5

As on 28.09.2012

Names of Shareholders (Non Cumulative Optionally Convertible Redeemable Preference Shares)		No. of Shares
Abhilasha Shah jointly with Sandeep R. Shah		829999
Sandeep R. Shah jointly with Srilaxmi S. Shah		759216
Sandeep R. Shah Trustee of Sandeep R. Shah Family Trust		2349996
Total		3939211

As on 28.09.2012

Equity Share Breakup		Percentage of Holding
Category
Directors or relatives of directors		51.00
Other top fifty shareholders		49.00
Total		100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Paints and Paints Related Materials.

Products :

Item Code No. (ITC Code)	32081090
Product Description	Paints and Paints related materials

PRODUCTION STATUS (AS ON 31.03.2012)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Paints, Enamels, Varnishes, Thinners and Synthetic Resins	MT	684	900	675

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Jalgaon Janata Sahakari Bank Limited, Vardhaman Chambers, 17-G, Cawasji Patel Street, Fort, Mumbai – 400 001, Maharashtra, India

Facilities :

Secured Loans	31.03.2012 (Rs. in Millions)	31.03.2011 (Rs. in Millions)
LONG TERM BORROWINGS
From Bank Cash Credit Limit (Secured by hypothecation of plant and machineries and other fixed assets, stocks and book debts as first charge and mortgage of properties as second charge and also personal guarantees of some of the Directors and shareholders)	1.709	3.932
From Bank – Working Capital Demand Loan (Secured by hypothecation of plant and machineries and other fixed assets, stocks and book debts as first charge and mortgage of properties as second charge and also personal guarantees of some of the Directors and shareholders) (Payable in 60 monthly installments)	0.919	1.475
From Bank – Vehicle Loan (Secured by hypothecation of Cars) (Payable in 36 monthly installments)	0.416	0.000
SHORT TERM BORROWINGS
From Bank - Working Capital Demand Loan (Secured by hypothecation of plant and machineries and other fixed assets, stocks and book debts as first charge and mortgage of properties as second charge and also personal guarantees of some of the Directors and shareholders) (Payable in 60 monthly installments)	0.556	0.309
From Bank – Vehicle Loan (Secured by hypothecation of Cars) (Payable in 36 monthly installments)	0.353	0.000
Total	3.953	5.716


Banking Relations :	--

Auditors :
Name :	D. Ajmera and Company Chartered Accountants
Address :	112B, Super Market, Monghi Bai Road, Vile Parle (East), Mumbai – 400 057, Maharashtra, India
Income-tax PAN of auditor or auditor's firm :	AABPA6705B

Associates and Group Companies :	Lara Organics (India) Private Limited Arco Products

CAPITAL STRUCTURE

As on 28.09.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
1000000	Equity Shares	Rs.10/- each	Rs.10.000 millions
500	Non Cumulative Redeemable Preference Shares	Rs.10/- each	Rs.0.005 million
3999500	Non Cumulative Optionally Convertible Redeemable Preference Shares	Rs.10/- each	Rs.39.995 millions
	Total		Rs.50.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
960784	Equity Shares	Rs.10/- each	Rs.9.608 millions
5	Non Cumulative Redeemable Preference Shares	Rs.10/- each	Rs.0.000 million
3939211	Non Cumulative Optionally Convertible Redeemable Preference Shares	Rs.10/- each	Rs.39.392 millions
	Total		Rs.49.000 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		49.000	49.000	0.100
2] Share Application Money Pending Allotment		11.700	11.700	37.100
3] Reserves & Surplus		0.000	0.000	3.905
4] (Accumulated Losses)		(35.391)	(23.928)	(20.760)
NETWORTH		25.309	36.772	20.345
LOAN FUNDS
1] Secured Loans		3.953	5.716	3.273
2] Unsecured Loans		49.500	29.500	40.771
TOTAL BORROWING		53.453	35.216	44.044
DEFERRED TAX LIABILITIES		0.000	0.000	0.000

TOTAL		78.762	71.988	64.389

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		52.686	47.987	40.471
Capital work-in-progress		0.000	0.000	0.000

INVESTMENT		0.297	0.297	0.297
DEFERRED TAX ASSETS		27.786	23.115	20.155

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	8.990	10.944	6.675
	Sundry Debtors	8.255	9.855	4.769
	Cash & Bank Balances	1.813	0.874	0.189
	Other Current Assets	6.609	2.691	0.000
	Loans & Advances	1.056	2.805	3.009
Total Current Assets		26.723	27.169	14.642
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	19.989	18.999	8.825
	Other Current Liabilities	8.639	7.515	2.371
	Provisions	0.102	0.066	0.088
Total Current Liabilities		28.730	26.580	11.284
Net Current Assets		(2.007)	0.589	3.358

MISCELLANEOUS EXPENSES		0.000	0.000	0.108

TOTAL		78.762	71.988	64.389

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Revenue from Operations	92.275	80.771	37.279
		Other Income	0.699	0.276	NA
		TOTAL (A)	92.974	81.047	NA

	EXPENSES
		Materials Consumed	62.185	57.644	48.770
		Changes in Inventories	(0.869)	(1.879)
		Manufacturing Expenses	4.421	3.440
		Employee Benefits Expenses	16.752	11.929
		Other Expenses	16.082	13.159
		TOTAL (B)	98.571	84.293	48.770 (including interest and depreciation)

Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		(5.597)	(3.246)

Less	INTEREST (D)		7.101	4.574

	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(12.698)	(7.820)

Less/ Add	DEPRECIATION/ AMORTISATION (F)		3.436	2.214

	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		(16.134)	(10.034)	(13.422)

Less	TAX (H)		(4.671)	(2.961)	(1.704)

	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		(11.463)	(7.073)	(11.718)

	EARNINGS IN FOREIGN CURRENCY
		FOB value of Exports	47.516	17.642	4.565
	TOTAL EARNINGS		47.516	17.642	4.565

	Earnings/ (Loss) Per Share (Rs.)
	- Basic		(11.90)	(85.30)	NA
	- Diluted		(2.30)	(18.40)	NA

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	(12.33)	(8.73)	NA

Net Profit Margin (PBT/Sales)	(%)	(17.48)	(12.42)	(36.00)

Return on Total Assets (PBT/Total Assets}	(%)	(20.32)	(13.35)	(24.35)

Return on Investment (ROI) (PBT/Networth)		(0.64)	(0.27)	(0.66)

Debt Equity Ratio (Total Debt/Networth)		2.11	0.96	2.16

Current Ratio (Current Asset/Current Liability)		0.93	1.02	1.30

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
31) Date of Birth of Proprietor/Partner/Director, if available	Yes
32) PAN of Proprietor/Partner/Director, if available	No
33) Voter ID No of Proprietor/Partner/Director, if available	No
34) External Agency Rating, if available	No

Unsecured Loans	31.03.2012 (Rs. in Millions)	31.03.2011 (Rs. in Millions)
LONG TERM BORROWINGS
From Shareholders	49.500	29.500
Total	49.500	29.500

FINANCIAL RESULTS:

During the year, the Company has incurred a loss of Rs.16.134 millions (before taxation).

BACKGROUND:

The Company was formed .under Part IX of the Companies Act, 1956 converting Paladin Paints and Chemicals - a partnership firm in to a Private Limited Company. All the partners decided to reconstitute the firm and convert it in to as the Private Limited Company, which was constituted under Part IX of the Companies Act, 1956. Pursuant to the above scheme of conversion with effect from 30.03.2007, all the Assets, Liabilities and the Reserves of the said firm Paladin Paints and Chemicals stands transferred to and vested in the Company at its book value. Pending completion of the relevant formalities of transfer of certain assets acquired pursuant to above scheme, such assets remain included in the books of the Company under the name of erstwhile Firm.

FIXED ASSETS:

· Land

· Buildings

· Plant and Machinery

· Equipments

· Lab and R&D Equipments

· Computers

· Vehicles

· Furniture and Fixtures

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 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.54.16
UK Pound	1	Rs.81.74
Euro	1	Rs.70.50

INFORMATION DETAILS

Report Prepared by :

SMN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	--
--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
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
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.

MIRA INFORM REPORT

8.990

8.255

1.813

6.609

1.056

26.723

19.989

8.639

0.102

28.730

(2.007)

(12.33)

(8.73)

(17.48)

(12.42)

(36.00)

(20.32)

(13.35)

(24.35)

(0.64)

(0.27)

(0.66)

2.11

0.93

Unit