MIRA INFORM REPORT

Report Date :

03.04.2014

IDENTIFICATION DETAILS

Name :	CHEMBOND CHEMICALS LIMITED
Registered Office :	Plot No.EL-71, TTC Industrial Area, M.I.D.C. Electronic, Mahape, Thane – 400 710, Maharashtra
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	22.03.1975
Com. Reg. No.:	11-018235
Capital Investment / Paid-up Capital :	Rs.66.604 millions
CIN No.: [Company Identification No.]	L24100MH1975PLC018235
TAN No.: [Tax Deduction & Collection Account No.]	MUMC10906A
PAN No.: [Permanent Account No.]	AAACC5467A
Legal Form :	Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Subject is engaged in the manufacture and sale of specialty chemicals primarily for construction and civil engineering industries.
No. of Employees :	307 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

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

Maximum Credit Limit :	USD 1879000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a part of the Chembond Group. It is an established company having satisfactory track record. There seems drastic dip in the profit of the company during 2013. However, general position of the company seems to be decent. The rating takes into consideration healthy financial risk profile, an established customer base and widespread distribution network. Trade relations are reported to be fair. Business is active. Payment terms are reported to be usually correct. The company can be considered normal for business dealing 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.

INDIAN ECONOMIC OVERVIEW

India’s current account deficit for the fiscal third quarter ended September 2013 narrowed to $4.2 billion or 0.9 % of the gross domestic product from $31.9 billion or 6.5 % of GDP a year earlier, thanks to a pick-up in exports and moderation in gold imports. Manufacturing activity and new orders in India showed their strongest growth in a year in February. The news comes as a relief after data showed Asia’s third largest economy grew by a slower-than-expected 4.7 % annually in the three months through December. The HSBC Manufacturing Purchasing Managers’ Index which gauges the business activity of India’s factories but not its’ utilities, rose to 52.5 in February, its highest in a year from 51.4 in January. Overall new orders for factory goods which rose to a one-year high of 54.9 contributed to the surge. China has emerged as India’s biggest trading partner in the current financial year replacing the United Arab Emirates and pushing it to the third spot. India-China trade has reached $49.5 billion with a 8.7 % share in India’s total trade. The US comes second at $46 billion with 8.1 % share during the first nine months of the current financial year.

The Reserve Bank of India has granted an additional nine months to the public to exchange currency notes printed before 2005 including Rs 500 and Rs 1,000 denominations, pushing the deadline to January 1, 2015. A day before dates for the Lok Sabha polls were announced, the government decided to hike interest rates on fixed deposit schemes offered by post offices up to 0.2 per cent. The new rates will be effective April, 1. The Supreme Court will resume hearing on March, 11 Nokia’s appeal against a ruling over transferring ownership of its local mobile phones plant which is the subject of a tax dispute to Microsoft Corp.

In the last days of the current Government, another scam has surfaced. The defence ministry has ordered a probe into Hindustan Aeronautics Limited’s contracts from Britain’s Rolls-Royce Holdings worth at least $ 1.2 billion. The Central Bureau of Investigation will look into allegations that over $80 million was paid in kickbacks in a deal signed in 2011. India has asked Boeing Co. to find a solution for problems with state-owned Air India’s 787 Dreamliners. The aircraft has experienced a series of malfunctions since its debut in 2011.

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long Term Rating: A-
Rating Explanation	Have adequate degree of safety and carry moderate credit risk.
Date	December 03, 2013

Rating Agency Name	CRISIL
Rating	Short Term Rating: A2+
Rating Explanation	Have strong degree safety and carry low credit risk.
Date	December 03, 2013

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.

INFORMATION DECLINED BY

Name :	Mr. Jinesh Maniyar
Designation :	Accounts Manager
Contact No.:	91-22-27618799

LOCATIONS

Registered Office/ Corporate Office/ R&D Centre :	Plot No.EL-71, TTC Industrial Area, M.I.D.C. Electronic, Mahape, Thane – 400 710, Maharashtra, India
Tel. No.:	91-22-39213000/ 3001/ 3002 (Board Line)/ 27618799/ 66143000
Fax No.:	91-22-39213100/ 27681294
E-Mail :	chembond@bom2.vsnl.net.in dipti.samant@chembondindia.com info@chembondindia.com chembond@vsnl.com jinesh.maniyar@chembondindia.com omkar.mhamunkar@chembondindia.com
Website :	http://www.chembondindia.com
Factory 1 :	Plot No.E-6/3 and 6/4, MIDC Estate, Tarapur, Boisar, District Thane – 401 506, Maharashtra, India
Tel. No.:	91-2522-2572615
Fax No.:	91-2522-2571172
Factory 2 :	Plot T/129, MIDC Tarapur, District Thane, Maharashtra, India
Factory 3 :	Khasra No.177/2, Village Theda, PO Lodhimajra, Tehsil Nalagarh, Baddi District, Solan – 174 101, Himachal Pradesh, India.
Factory 4 :	Near Ramuna Golai, Opposite Gurudwara / Gati Courier Office, Beside Rajesh Rajesh Chemicals, Balasore – 756 019, Orissa, India
Factory 5 :	S.F. No.5/5, 5/6B, Avadi Road, Sennerkuppam, Poonamallee, Chennai – 600 056, India
Tel. No.:	91-44-26801331/ 64552655
Factory 6 :	404/B/P-1, Village Dudhawada, ECP Road, Taluka Padra, District Vadodara – 391 450, Gujarat, India
Tel. No.:	91-2662-273778/ 273181
Fax No.:	91-2662-273781
Branch/ Sales Office :	Located at: · Mumbai  · Ahmedabad · Noida · Kolkata · Chennai

DIRECTORS

AS ON 31.03.2013

Name :	Dr. Vinod D. Shah
Designation :	Chairman Emeritus
Qualification :	Doctorate in Chemical Engineering
Name :	Mr. Ashwin R. Nagarwadia
Designation :	Director
Date of Birth/Age :	76 Years
Qualification :	B.E. Mechanical
Name :	Mr. Jawahar I. Mehta
Designation :	Independent Director
Name :	Mr. Jayantilal S. Vasani
Designation :	Independent Director
Name :	Mr. Mahendra K. Ghelani
Designation :	Independent Director
Date of Birth/Age :	68 Years
Qualification :	Advocate Solicitor and Notary
Name :	Mr. Nirmal V. Shah
Designation :	Vice Chairman and Managing Director
Name :	Mr. O.P. Malhotra
Designation :	Independent Director
Name :	Mr. Perviz H. Dastur
Designation :	Director
Name :	Mr. Sameer V. Shah
Designation :	Chairman and Managing Director
Name :	Mr. Sushil U. Lakhani
Designation :	Independent Director

KEY EXECUTIVES

Name :	Mr. Omkar Mahamukar
Designation :	Company Secretary
Name :	Mr. Virendra Bhatt
Designation :	Whole Time Practicing Company Secretary
Name :	Mr. Jinesh Maniyar
Designation :	Accounts Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.12.2013

Category of Shareholders	No. of Shares	Percentage of holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	3795871	56.99
Bodies Corporate	762815	11.45
Sub Total	4558686	68.44
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	4558686	68.44
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	23800	0.36
Sub Total	23800	0.36
(2) Non-Institutions
Bodies Corporate	536862	8.06
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	553423	8.31
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	961741	14.44
Any Others (Specify)	25900	0.39
Directors & their Relatives & Friends	25900	0.39
Sub Total	2077926	31.20
Total Public shareholding (B)	2101726	31.56
Total (A)+(B)	6660412	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	6660412	0.00

Shareholding of securities (including shares, warrants, convertible securities) of persons belonging to the category Promoter and Promoter Group

Sl. No.	Name of the Shareholder	No. of Shares held	As a % of grand total	Total shares (including underlying shares assuming full conversion of warrants and convertible securities) as a % of diluted share capital
1	Alpana Sandeep Shah	50450	0.76	0.76
2	Amrita Sameer Shah	19729	0.30	0.30
3	Ashwin R Nagarwadia	385932	5.79	5.79
4	Guloo Perviz Dastur	200900	3.02	3.02
5	Jyoti Nikhil Mehta	34740	0.52	0.52
6	Kshitija Nirmal Shah	9800	0.15	0.15
7	Kumud A Nagarwadia	154700	2.32	2.32
8	Mallika S Shah	12800	0.19	0.19
9	Mamta Nirmal Shah	47400	0.71	0.71
10	Nikhil J Mehta	21400	0.32	0.32
11	Nirmal V Shah	311524	4.68	4.68
12	Padma V Shah	747557	11.22	11.22
13	Shah Parul	27400	0.41	0.41
14	Perviz Homi Dastur	157060	2.36	2.36
15	Raunaq S Shah	3400	0.05	0.05
16	Sameer Vinod Shah	308384	4.63	4.63
17	Sandeep Shah	40192	0.60	0.60
18	Shah Bhadresh	112460	1.69	1.69
19	Shah Kalpana Sunil	21600	0.32	0.32
20	Shah Sunil Dahyalal	25500	0.38	0.38
21	Shilpa Sameer Shah	30872	0.46	0.46
22	Trupti A Nagarwadia	148500	2.23	2.23
23	Vinod D Shah	923571	13.87	13.87
24	Visan Holdings and Financial Services Private Limited	612518	9.20	9.20
25	Finor Piplaj Chemicals Private Limited	66600	1.00	1.00
26	GTK Intermediates Private Limited	3800	0.06	0.06
27	S and N Ventures	79897	1.20	1.20
	Total	4558686	68.44	68.44

Shareholding of securities (including shares, warrants, convertible securities) of persons belonging to the category Public and holding more than 1% of the total number of shares

Sl. No.	Name of the Shareholder	No. of Shares held	Shares as % of Total No. of Shares	Total shares (including underlying shares assuming full conversion of warrants and convertible securities) as a % of diluted share capital
1	Ajay Sheth	379847	5.70	5.70
2	Quest Investment Advisors Private Limited	364433	5.47	5.47
3	Bina Sheth	273619	4.11	4.11
4	Chartered Finance and Leasing Limited	79529	1.19	1.19
5	Rajni S Shah	72800	1.09	1.09
6	Ajay C Laloo	71380	1.07	1.07
	Total	1241608	18.64	18.64

Shareholding of securities (including shares, warrants, convertible securities) of persons (together with PAC) belonging to the category “Public” and holding more than 5% of the total number of shares of the company

Sl. No.	Name(s) of the shareholder(s) and the Persons Acting in Concert (PAC) with them	No. of Shares	Shares as % of Total No. of Shares	Total shares (including underlying shares assuming full conversion of warrants and convertible securities) as a % of diluted share capital
1	Ajay Sheth	379847	5.70	5.70
2	Quest Investment Advisors Private Limited	364433	5.47	5.47
	Total	744280	11.17	11.17

Details of Locked-in Shares

Sl. No.	Name of the Shareholder	No. of Shares	Locked-in Shares as % of Total No. of Shares
1	Alpana Sandeep Shah	3000	0.05
2	Ashwin Ratilal Nagarwadia	45000	0.68
3	Jyoti Nikhil Mehta	3000	0.05
4	Nirmal V Shah	26000	0.39
5	Perviz Homi Dastur	23000	0.35
6	S & N Ventures	24000	0.36
7	Sameer Vinod Shah	26000	0.39
8	Vinod D Shah	17000	0.26
9	Visan Holdings and Financial Services Private Limited	133000	2.00
	Total	300000	4.50

BUSINESS DETAILS

Line of Business :

Subject is engaged in the manufacture and sale of specialty chemicals primarily for construction and civil engineering industries.

Products :

Products Description	ITC Code No.
Metal Pretreatment Chemicals	3402.90 / 3811.00
Water Treatment Chemicals	3811.00
Construction Chemicals	3823.00
Anticorrosive Paints/ Coatings	3208.90 / 3814.00

PRODUCTION STATUS (AS ON 31.03.2011):

Particulars	Unit	Actual Production
Liquid	KL/MT	15052
Powder	KL/MT	3416

GENERAL INFORMATION

No. of Employees :

307 (Approximately)

Bankers :

• Bank of India, Worli Naka Branch, Mumbai – 400 018, Maharashtra, India
• HDFC Bank Limited, Nariman Point, Mumbai, Maharashtra, India
• Kotak Mahindra Bank Limited, 36-38A, Nariman Bhavan, 227, D, Nariman Point, Mumbai – 400 021, Maharashtra, India
• HDFC Bank Limited, HDFC Bank House, Senapati Bapat Marg, Lower Parel (West), Mumbai – 400 013, Maharashtra, India

Facilities :

Secured Loans	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Term Loan from Banks	24.000	41.982
SHORT TERM BORROWINGS
Over Draft Facilities	32.266	31.518
Working Capital Loan	23.947	0.000
Total	80.213	73.500

Notes:

LONG TERM BORROWINGS

Term Loan from Banks are secured by Equitable Mortgage on movable and immovable fixed assets and hypothecation of Plant and Machinery of the company. The maturity profile of these loans are as follows:

(Rs. in millions)

	1-2 years	2-3 years	3-4 years	Beyond 4 Years
Term Loan from Banks	8.000	8.000	8.000	Nil

SHORT TERM BORROWINGS

a. Over Draft Facility are secured against Fixed Deposit of Subsidiary Company Protochem Industries Private Limited.

b. Working Capital loan is secured by charge on current asset, Mortgage of Tangible Immovable Properties and charge on other fixed assets.

Banking Relations :	--
Statutory Auditors :
Name :	Kastury and Talati Chartered Accountants,
Address :	Mumbai, Maharashtra, India
Cost Auditor :	R.S. Raghavan
Subsidiary Companies :	Chembond Ashland Water Technologies Limited Protochem Industries Private Limited H2O Innovation India Limited Chembond Inver Coatings Limited
Joint Venture :	Henkel Chembond Surface Technologies Limited
Associates :	Chembond Distribution Limited Chembond Enzyme Company Limited Chembond Bioengineering Company Limited (Subsidiary of Associate)
Entities over which Key Management personnel are able to exercise influence :	CCL Optoelectronics Private Limited Finor Piplaj Chemicals Limited S and N Ventures Limited GTK Intermediates Private Limited Bentec Organo Clays Private Limited Visan Holdings and Financial Services Private Limited

CAPITAL STRUCTURE

AS ON 31.03.2013

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
6660412	Equity Shares	Rs.10/- each	Rs.66.604 millions

a. Shares issued for consideration other than cash and bonus shares issued:

Out of the issued, subscribed and paid up share capital, during the last five years

i) 190206 Equity Shares of Rs.10 each have been issued for consideration other than cash

ii) 3180206 Equity Shares of Rs.10 each have been issued as fully paid Bonus Shares by way of capitalisation of Reserves and Surplus.

b. Details of Shareholders holding more than 5% Shares

Name of the Shareholder	As at 31.03.2013
	No of Shares	% held
Dr. Vinod D. Shah	922397	13.85%
Padma V. Shah	747360	11.22%
Visan Holding and Financial Services Private Limited	612121	9.19%
Ashwin R. Nagarwadia	385932	5.79%
Ajay Sheth	379847	5.70%
Quest Investment Advisors Private Limited	360233	5.41%

c. Terms/Rights attached to Equity Shares

The Company has only one class of Equity Shares having a par value of Rs.10 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General Meeting.

In the event of liquidation of the Company, the holders of Equity Shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

d. On 25^th March, 2013 the Company has allotted 300000 Equity Shares of Rs.10 each fully paid at a premium of

Rs.173.97 per share against exercise of options attached to the 300000 Convertible Warrants issued to the Promoters and Promoters Group entitling them to subscribe for one equity share against each warrant in accordance with provisions specified under Chapter VII of SEBI (ICDR) Regulations, 2009 and as per the In Principle Approval received from Bombay Stock Exchange (BSE) on May 07, 2012.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1) Shareholders' Funds
(a) Share Capital	66.604	63.604	63.604
(b) Reserves & Surplus	403.086	334.102	280.408
(c) Convertible Warrants money pending allotment	0.000	13.798	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	469.690	411.504	344.012
(3) Non-Current Liabilities
(a) Long-term borrowings	87.136	93.516	84.446
(b) Deferred tax liabilities (Net)	30.740	25.267	21.985
(c) Other long term liabilities	0.000	0.000	0.000
(d) Long-term provisions	8.102	7.822	6.142
Total Non-current Liabilities (3)	125.978	126.605	112.573
(4) Current Liabilities
(a) Short term borrowings	125.798	79.901	45.735
(b) Trade payables	323.041	261.561	203.291
(c) Other current liabilities	60.723	78.601	59.492
(d) Short-term provisions	18.982	14.947	15.947
Total Current Liabilities (4)	528.544	435.010	324.465
TOTAL	1124.212	973.119	781.050
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	331.526	279.188	205.908
(ii) Intangible Assets	8.820	8.984	5.516
(iii) Capital work-in-progress	31.783	50.350	2.660
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	149.687	143.774	138.445
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	37.542	10.675	5.924
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	559.358	492.971	358.453
(2) Current assets
(a) Current investments	0.055	0.051	0.048
(b) Inventories	247.490	215.300	177.998
(c) Trade receivables	283.375	224.776	229.130
(d) Cash and cash equivalents	11.326	30.457	6.473
(e) Short-term loans and advances	22.608	9.564	8.948
(f) Other current assets	0.000	0.000	0.000
Total Current Assets	564.854	480.148	422.597
TOTAL	1124.212	973.119	781.050

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Revenue from Operations	1744.682	1519.721	1322.447
		Other Income	66.751	57.043	56.109
		TOTAL (A)	1811.433	1576.764	1378.556
Less	EXPENSES
		Cost of materials consumed	1385.812	1147.159	996.442
		Purchases of stock-in-trade	84.466	117.114	89.618
		Changes in inventories of finished goods, work-in-progress and traded goods	(11.904)	(3.127)	(0.825)
		Employee benefits expense	127.832	101.081	78.355
		Other expenses	135.915	96.800	96.506
		TOTAL (B)	1722.121	1459.027	1260.096
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		89.312	117.737	118.460
Less	FINANCIAL EXPENSES (D)		29.170	23.781	25.010
	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		60.142	93.956	93.450
Less/ Add	DEPRECIATION/ AMORTISATION (F)		18.195	13.853	11.875
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		41.947	80.103	81.575
Less	TAX (H)		7.171	13.680	17.025
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		34.776	66.423	64.550
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		278.315	231.432	187.259
Add	Transfer from Revaluation Reserve		0.189	0.189	0.189
Less	APPROPRIATIONS
		General Reserves	3.995	7.000	6.500
		Set off of Dividend Tax in respect of dividend from Subsidiary Company	(3.226)	(4.643)	(1.827)
		Proposed Dividend	18.982	14.947	13.675
		Tax on Proposed Dividend	3.226	2.425	2.218
	BALANCE CARRIED TO THE B/S		290.303	278.315	231.432
	EARNINGS IN FOREIGN CURRENCY
		Export of Goods on FOB basis	45.582	13.626	29.654
		Commission Earnings	0.000	0.000	0.003
	TOTAL EARNINGS		45.582	13.626	29.657
	IMPORTS
		Raw Materials and Finished Goods	266.632	247.508	258.717
	TOTAL IMPORTS		266.632	247.508	258.717
	Earnings/ (Loss) Per Share (Rs.)
	- Basic		5.46	10.44	10.15
	- Diluted		5.44	10.44	10.15

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	1.92	4.21	4.68
Net Profit Margin (PBT/Sales)	(%)	2.40	5.27	6.17
Return on Total Assets (PBT/Total Assets}	(%)	4.45	10.28	12.75
Return on Investment (ROI) (PBT/Networth)		0.09	0.19	0.24
Debt Equity Ratio (Total Debt/Networth)		0.45	0.42	0.38
Current Ratio (Current Asset/Current Liability)		1.07	1.10	1.30

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns.)	(INR in Mlns.)	(INR in Mlns.)
Share Capital	63.604	63.604	66.604
Reserves & Surplus	280.408	334.102	403.086
Convertible Warrants money pending allotment	0.000	13.798	0.000
Net worth	344.012	411.504	469.690
Long-term borrowings	84.446	93.516	87.136
Short term borrowings	45.735	79.901	125.798
Total borrowings	130.181	173.417	212.934
Debt/Equity ratio	0.378	0.421	0.453

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Revenue from Operations	1322.447	1519.721	1744.682
		14.917	14.803

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(INR in Mlns)	(INR in Mlns)	(INR in Mlns)
Revenue from Operations	1322.447	1519.721	1744.682
Profit	64.550	66.423	34.776
	4.88%	4.37%	1.99%

LOCAL AGENCY FURTHER INFORMATION

Details of Current maturities of long term debt:

Particulars	31.03.2013 (Rs. in millions)	31.03.2012 (Rs. in millions)	31.03.2011 (Rs. in millions)
Current maturities of long term debt	16.869	40.433	32.433

Sr. No.	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	No
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	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	Yes

INDEX OF CHARGES:

S. No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10343562	01/08/2013 *	110,000,000.00	KOTAK MAHINDRA BANK LIMITED	36-38A, NARIMAN BHAVAN, 227, D, NARIMAN POINT, MUMBAI, MAHARASHTRA - 400021, INDIA	B83152256
2	10319447	02/11/2011	45,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL (WEST), MUMBAI, MAHARASHTRA - 400013, INDIA	B25957564
3	10172907	14/07/2009 *	30,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL (WEST), MUMBAI, MAHARASHTRA - 400013, INDIA	A68978675
4	10149256	14/07/2009 *	65,250,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL (WEST), MUMBAI, MAHARASHTRA - 400013, INDIA	A68802123
5	10075425	08/10/2007	9,250,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL (WEST), MUMBAI, MAHARASHTRA - 400013, INDIA	A26522847
6	10058441	15/06/2007	20,250,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL (WEST), MUMBAI, MAHARASHTRA - 400013, INDIA	A17957614
7	90145732	14/07/2009 *	120,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE, SENAPATI BAPAT MARG, LOWER PAREL (WEST), MUMBAI, MAHARASHTRA - 400013, INDIA	A68802263
8	90141731	27/07/1992	1,500,000.00	MAHARASHTRA STATE FINANCIAL CORPORATION	NEW EXCELSIOR BUILDING; 5TH; 7TH; 8TH & 9TH FLOORS, AMRIT KESHAV NAYAK MARG, MUMBAI, MAHARASHTRA - 400001, INDIA	-
9	90141528	14/03/1989 *	50,000.00	BANK OF INDIA	WORLI NAKA BRANCH, PANKAJ MANSION; OPPOSITE PODAR HOSPITAL; WORLI NAKA, MUMBAI, MAHARASHTRA - 400018, INDIA	-

* Date of charge modification

Unsecured Loans	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
LONG TERM BORROWINGS
Loans from Related Parties	58.366	46.626
Loans from Others	4.770	4.908
SHORT TERM BORROWINGS
Working Capital Loan	20.000	20.000
Buyers Credit Loan	49.585	27.307
Deferred Sales Tax Liability	0.000	1.076
Total	132.721	99.917

Notes:

LONG TERM BORROWINGS

Maturity Profile of Unsecured Loans from related parties and others is as follows:

(Rs. in millions)

	1-2 years	2-3 years	3-4 years
Loans from Related Parties	14.362	44.004	Nil
Loans from Others	4.770	Nil	Nil

MANAGEMENT DISCUSSION AND ANALYSIS

Over the last few years Indian industry has faced challenging times starting with the global financial crisis in 2008 through the current situation with high deficits, high inflation, greater public scrutiny, delayed macro decision making, etc. All of this seems to have led to a slowdown in infrastructure investment by the government, delayed capital investment by industry, and sharply lower spending (than forecasted) by the consumer on cars, appliances, and to a large extent on homes.

These factors have resulted in an exception where continuous profit growth has been interrupted for only the second time in recent memory. While sales have grown by almost 15%, this was much lower than planned. Thus, investments made in the year in people and brands have affected the profits of the Company. High inflation combined with a devaluation of the Rupee, added pressure to the gross margins. As a result, EBITDA and profits are lower.

There are good signs however, as everyone agrees that the Indian economy is still a better performing one than most developed and emerging countries and that it will soon revert to its higher growth phase. It could be said that the outcomes of the watchdog / public scrutiny, focus by the electorate on governance, the debate on deficits, and the waning of price controls, albeit gradual, bodes well for the future.

In Chembond as well, there are some encouraging news that come out of the analysis. The growth in sales has largely come from the newer businesses, where margins have also held their own for the most part. And, on a consolidated basis, the profit reduction is much smaller in percent terms. Over the last two years, the Company has built the infrastructure in capacities, people, technology, and brands and is well poised to handle and benefit from the growth of the county

BUSINESS AREAS

Construction Chemicals is a wide category of specialty chemicals which includes products like plasticizers for concrete, sealants, grouts, concrete curing compounds, tile fixing adhesives, waterproofing chemicals, membranes, and mortars. With the deployment of modern construction techniques, expectations of higher quality, and pressure on reduction of project durations, the use of these products becomes necessary. This is therefore a market that is growing rapidly. As with most of their products, this is a competitive market though with some strong Indian and multinational companies in the field.

During the year, the Company has further consolidated its position in the construction chemicals field. Several new products and technologies launched during the previous year are now well-established in the market. As in the last two years, this year too has seen a focus on marketing and promotions. The Company has participated in several exhibitions and a new campaign to extend its market reach is underway. New capacity has been added to the existing facilities of manufacturing and R & D. The addition of new qualified and trained manpower has seen a visible change in the speed of new product turnaround and the system being strengthened.

The range of high performance coatings for protection and enhancement of industrial floors and for use in corrosion protection has shown a steady growth in business. Several new products and technologies were successfully launched in the market to tap unmarked segments, Initiatives taken in previous years to develop and cater to demanding applications has helped the Company gain some high valued projects. Experienced personal were appointed throughout the regions to increase presence and to offer skilled technical assistance.

Significant investments were made to further equip the R&D and product development facilities. Intensive testing for validation of new products was carried out. Some new products like the elastomeric PU coating have shown significant market potential amidst escalating demand. With continued focus on development the division is expected to exploit more opportunities to grow substantially during the coming year.

The range of products for use in the Animal Health industry continues its rapid growth. This could have been much better if the industry had not faced the crises of rising feed ingredient costs, rainfall shortage, and disease outbreaks. With more than 20 products for the poultry and dairy segments, a robust product pipeline, and a growing field force, the Animal Health business will be a major growth driver in the biotech division and the Company.

The Company's enzymes for textile processing and alcohol production continue to show promising growth.

Both of these segments have innovative products and a dedicated, focused team in sales, technical support, and development. The strong R&D capabilities have helped gain key accounts.

Performance of Joint Ventures and Subsidiaries Chembond Ashland Water Technologies Limited is a Joint Venture between the Company and Ashland Inc., USA in which the Company holds 55% equity and rest is held by Ashland Inc. The Company is a leader nationally in the field of industrial water treatment chemicals used in cooling towers, boilers, RO plants and waste water treatment plants. During the year the sales of the Company grew by 10.29% but the pressure on input costs and higher expense levels saw a profit after tax growth of 2.25% over prior year. The Company serves customers across very diverse manufacturing sectors. Ashland Inc. has recommitted its involvement in the water treatment segment globally and with USD 8 billion plus revenues is placed in the Fortune Global 500.

Henkel Chembond Surface Technologies Limited the Company's joint venture with Henkel. KGaA, Germany caters to the automotive, steel, and appliance industries. During the year sales of the Company grew by 6.53%, marginally higher than prior year owing to the industrial slowdown and PBT declined by 7.64%. Inflation in raw material prices and the value of the US Dollar also resulted in lower margins.

H2O Innovation (India) Limited is a Joint Venture between the Company and H2O Innovation Inc., Canada in which Chembond owns 51% equity. The company, formed in 2010, is in the business of designing, fabricating, installing and operating water treatment equipment for front end water treatment, process water production as well as waste water recycle applications. During the year the company executed several projects for local customers as well as for export. H2O Innovation Inc. have expressed their desire to exit the India JV. The equipment business is one with a longer incubation period. The Company is convinced about the future opportunities of this business and is working towards delivering a profitable performance.

Chembond lnver Coatings Limited is a wholly owned subsidiary of subject, which manufactures industrial coatings under license from lnver SPA, Italy. The business is focused in the field of agricultural machinery, construction equipment, trucks, metal furniture, engineering equipment, and architectural aluminum with a wide range of premium solvent borne, water borne, and powder paints. During the year, the teams at Chembond and Inver, Italy have exchanged the applications and the technology, undertaken visits to the labs and plant in Italy, as well as to key customers in India. Production of this product range has commenced at the plant in Dudhwada.

Protochem Industries Private Limited, the wholly owned subsidiary is mainly engaged in toll production for the Company's joint venture Henkel Chembond post the acquisition of Protochem and subsequent transfer of the metal treatment chemicals business to Henkel Chembond. Protochem is now embarking on new range of products for the Maintenance, Repair, and Overhaul (MRO) segment. MRO is a very large and fast growing market in the country and Protochem is a reputed name in the industry, which should help it stand out among some large international competitors and local players in MRO, heat treatment fluids and products for the defense sector.

SIGNIFICANT DEVELOPMENTS DURING THE YEAR

Start of Operations of Chembond lnver Coatings Limited

The Company had identified industrial coatings as an area of diversification about 3 years ago. Discussions with an Italian company for licensing the technology have now culminated into the formation of Chembond lnver Coatings Limited. Key executives from lnver SPA, Italy have visited customers in India and their personnel from product development, production and sales have undergone training by lnver in Italy. This signals the start-up of operations in industrial coatings.

Plant for Manufacturing Coatings commissioned at Dudhwada

A new, well laid out plant for manufacturing high performance coatings was commissioned at the Dudhwada site. The facility includes a well-equipped quality control and Product development laboratory and incorporates automation in manufacturing and material handling.

H2O Innovation India

Three years ago the Company entered in a new area of design and manufacturing of water treatment equipment. The field though exciting and full of opportunities also has its own set of challenges worldwide. The Company has had an excellent start and has marquee reference projects and the infrastructure to set-off the not so good financial results. The global economic slowdown affected the business of several international companies forcing them to review their strategy. One such change in the strategy of the JV partner- H2O Innovation Inc, Canada -has resulted in a cordial and mutual termination of the JV - H2O Innovation India Limited. Reflecting the change in ownership, the company has been renamed as Chembond Clean Water Technologies Limited.

Visibility and Branding

As mentioned earlier in the MDA, the Company has been investing to increase its visibility to users and influencers of its products. During the year the Company exhibited Construction Chemicals and Animal Health divisions at the industry best events to an overwhelming response. The Company sponsored the leading annual corrosion conference in Mumbai and also the construction chemicals national seminar in Delhi. Branding efforts continued with interactive meets with influencers and users and an FM radio campaign in Gujarat for waterproofing products.

Periodic Call Auction

As a result of a circular issued by SEBI changes have been made by the BSE for trading in illiquid stocks. The introduction of these changes has resulted in the shares of the Company now being traded in the Periodic Call Auction route. A stock is classified as 'illiquid' when in a quarter the average volume is below 10000 and average daily number of trades is below 50.

Research and Development

For a long time the Company has wished to put increased focus on R&D activities. At a time when the economy was passing through a stage of guarded optimism, Chembond believed that R&D was crucial for maintaining a leading edge for the Company. A few steps in the direction of taking R&D activities to a higher level have been taken. Facilities at Mahape have been extended to house a new R&D centre; and novel techniques for remediation of waste water and have been initiated.

Outlook

A few months ago, the management team of the Company prepared a blueprint outlining the vision for the next five years. Although this was when everyone was more optimistic about the economy, the long-term vision remains intact. Sales are expected to double in the next three years primarily driven by the Construction Chemicals, Coatings, Biotech, and Animal Health businesses. The necessary infrastructure for handling such a growth is in place with the investments made by the Company in facilities, brands, people, IT, systems, and technology. Emphasis on delivering the growth is now one of the prime focus areas for the management of the Company and accordingly, some processes are being changed. The Company introduced its CRM system, SalesPro, a year ago, which with continued training is beginning to show its benefits in the minds of the sales and service teams. Compensation policies have also been tweaked in line with the expectations.

The outlook for the established businesses of water and metal treatment chemicals is to grow at a minimum of twice the GDP growth. Since these businesses need only make incremental investments, the bottom lines will grow at better than topline percentages. The Construction Chemicals and Coatings businesses will consistently grow at a minimum of 20 - 25% for at least the next three to five years. For the new businesses of biotech, animal health, bioremediation, and the subsidiaries Protochem, Chembond Clean Water, and Chembond Inver, the requirements are much higher and the management will devote considerable energies to make each of these areas achieve scale.

The management team is enthused with the opportunities the economy and the business areas present and the

Company is well positioned to rise to these challenges.

MANUFACTURING

During the year, The Coatings production was moved to a modern, larger facility in Dudhwada and construction of the new plant at Ranipet reached an advanced stage of commissioning. The Company has existing manufacturing units at Tarapur, Mahape, Dudhwada, Baddi, Chennai, and Balasore. With this, the Company has the capability to efficiently serve the customers' requirements in all parts of the country. The overall manufacturing capacity is elastic, with a flexibility of wide range of product categories and capable of handling the requirements of the Company for the next several years. The plants are modern, compliant with health, safety, and environment norms, and the team is also well trained to use the best manufacturing practices.

FORWARD LOOKING STATEMENTS

This report contains statements, which may constitute 'forward looking statements' within the meaning of the applicable securities laws and regulations. Forward-looking statements are based on certain assumptions and expectations of the future events. Actual results could differ materially from those expressed or implied. Important factors that could impact the Company's performance include, among others, economic conditions affecting the demand/ supply and price conditions in the markets in which the Company operates, changes in the Government policies, regulations, tax laws, other statutes and incidental factors.

The Company undertakes no obligations to update or revise forward-looking statements on the basis of any subsequent developments, information, or events.

CONTINGENT LIABILITIES NOT PROVIDED FOR ARE IN RESPECT OF:

Particulars	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
a. Outstanding LCs and Bank Guarantees issued by Bankers.	6.748	15.366
b. Corporate Guarantee given to Bank of India by the company on behalf of Subsidiaries Chembond Ashland Water Technologies Limited and H2O Innovation India Limited	90.000	90.000
c. Income Tax matter under appeal	0.135	0.135
d. Balance Payment for Capital Commitments	5.240	0.857
e. Claim against the Company not acknowledged as debts	0.960	0.960

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED AND NINE MONTHS ENDED 31^ST DECEMBER, 2013

(Rs. in millions)

Sr. No	Particulars		Standalone
			Quarter Ended		Nine Months Ended
			31.12.2013	30.09.2013	31.12.2013
			Unaudited	Unaudited	Unaudited
1	Income From Operations
	a. Net Sales/ Income from Operations (Net of Excise Duty)		500.427	487.498	1465.274
	b. Other Operating Income		8.390	7.116	42.491
	Total Income from Operations (Net)		508.817	494.614	1507.765
2	Expenditure
	a. Cost of material Consumed		400.405	411.478	1205.939
	b. Purchase of Stock-in trade		17.790	17.786	54.296
	c. Changes in inventory of finished Goods, work- in-progress and Stock-in-trade		2.404	(18.156)	(25.337)
	d. Employees Benefit Expenses		44.406	43.643	128.893
	e. Depreciation and Amortisation Expenses		4.771	4.532	13.739
	f. Other expenses		28.570	26.978	82.024
	Total Expenses		498.346	486.261	1459.554
3	Profit from Operations before Other Income, Interest and Exceptional Items		10.471	8.353	48.211
4	Other Income		--	--	--
5	Profit from ordinary activities before finance cost & exceptional items		10.471	8.353	48.211
6	Finance Costs		7.900	6.795	20.349
7	Profit from ordinary activities after finance costs & exceptional items		2.571	1.558	27.861
8	Exceptional items		--	--	--
9	Profit from ordinary activities before tax		2.571	1.558	27.861
10	Tax Expense
	- Income Tax		--	(0.521)	--
	- Deferred Tax		2.204	0.923	4.335
11	Net Profit from ordinary activity after tax		0.367	1.156	23.526
12	Extraordinary Items		--	--	--
13	Net Profit After Tax		0.367	1.156	23.526
14	Paid-up equity share capital (face value of Rs.10 per share)		66.604	66.604	66.604
15	Reserves excluding Revaluation Reserve as per balance sheet of previous accounting Year		--	--	--
16	Earning Per Share (of Rs.10 each) (not annualized)
	Basic EPS		0.06	0.17	3.53
	Diluted EPS		0.05	0.17	3.52
A		PARTICULARS OF SHAREHOLDING
17		Public Shareholding
		- No. of shares	2101726	2101726	2101726
		- Percentage of shareholding	31.56%	31.56%	31.56%
18		Promoter & Promoter Group Shareholding
		a) Pledged/Encumbered
		- No. of shares	Nil	Nil	Nil
		- Percentage of shareholding (as a % of the total shareholding of promoter and promoter group)	Nil	Nil	Nil
		- Percentage of shareholding (as a % of the total share capital of the company)	Nil	Nil	Nil
		b) Non-encumbered
		- No. of shares	4558686	4558286	4558286
		- Percentage of shareholding (as a % of the total shareholding of promoter and promoter group)	100.00%	100.00%	100.00%
		- Percentage of shareholding (as a % of the total share capital of the company)	68.44%	68.44%	68.44%

B	Particulars	3 months ended 31.12.2013
	INVESTOR COMPLAINTS
	Pending at the Beginning of the Quarter	0
	Received During the Quarter	1
	Disposed of during the Quarter	1
	Remaining Unresolved at the End of Quarter	0

Notes:

1. The above results have been reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on February 08, 2014.

2. The Limited Review, as required under Clause 41 of the Listing agreement has been completed by the Statutory Auditors.

3. Previous quarter figures have been regrouped or reallocated wherever necessary to conform to this quarter classification.

4. The company operates in a single business segment, namely "Specialty Chemicals", therefore the information pursuant to AS - 17 is not applicable.

5. Other Operating Income for the Nine Month Ended December 31, 2013 includes Dividend Rs.19.250 millions (Previous Year Rs.15.124 millions) from Subsidiary Company.

6. The Company has forayed in the areas of Water treatment equipments, retail construction chemical products and Industrial coatings which are in gestation period. In this respect, the Company has investments, Loans and Advances and Debtors aggregating Rs.119.547 millions in two subsidiaries and one associate company whose net worth has eroded. However no provision is considered necessary as Management is confident enough to bring positive trend in near future and the investments are long term and losses are temporary in nature. Auditors have without Qualifying their Limited Review Report given emphasis on this matter.

7. Deferred tax is higher as the Company has capitalised its Ranipet Manufacturing facility during the Quarter Ended December 31, 2013.

FIXED ASSETS:

Tangible Assets

· Leasehold Land

· Freehold Land

· Buildings

· Equipment and Machinery

· Computers

· Furniture and Fixtures

· Motor Cars

· Electric Fittings and Installations

Intangible Assets

· Computer Software

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.59.65
UK Pound	1	Rs.99.21
Euro	1	Rs.82.39

INFORMATION DETAILS

Information Gathered by :	HNA
Analysis Done by :	RAS
Report Prepared by :	SMN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	5
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		50

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.