MIRA INFORM REPORT

Report Date :

09.07.2008

IDENTIFICATION DETAILS

Name :	KCK EXPORTS LIMITED
Registered Office :	87 – 88, Shahpur Kalpi Road, Panki, Kanpur – 208 020, Uttar Pradesh
Country :	India
Financials (as on) :	31.03.2005
Date of Incorporation :	19.05.1995
Com. Reg. No.:	20 – 18080
CIN No.: [Company Identification No.]	U19129UP1995PLC018080
TAN No.: [Tax Deduction & Collection Account No.]	KNPK00254C KNPK01348E
PAN No.: [Permanent Account No.]	AAACK5007C
Legal Form :	A Closely held Public Limited Liability Company
Line of Business :	Manufacturer and Exporter of Leather Goods.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING			STATUS		PROPOSED CREDIT LINE
41-55		Ba	Overall operation is considered normal. Capable to meet normal commitments.		Satisfactory
	Maximum Credit Limit :			USD 1534990
	Status :			Satisfactory
	Payment Behaviour :			Regular
	Litigation :			Clear
	Comments :			Subject is a well-established and reputed company meeting its normal commitments timeously. Trade relations are fair. Business is active. The company has not filed its latest financials with the government departments and the management declined to part the same. The company can be considered good for normal business dealings.

INFORMATION PARTED BY

Name :	Mr. Vikas Agarwal
Designation :	Chartered Accountants
Contact No.:	91-9336106018
Date :	30.06.2008

LOCATIONS

Registered Office / Factory :	87 – 88, Shahpur Kalpi Road, Panki, Kanpur – 208 020, Uttar Pradesh, India
Tel. No.:	91-512-2262049/ 2262375/ 2262047/ 2262378
Mobile No.:	91-9935388446
Fax No.:	91-512-2263251
E-Mail :	logistics@kckmail.com kckexports@kckmail.com dalipkapur@kcmail.com rohitkapur@kckmail.com manjari@kckmai.com jkscoknp@gmail.com
Website :	http://www.kckgroup.com
Area :	32000 Sq. Yards
Location :	Owned

DIRECTORS

Name :	Mr. Dalip Kapur
Designation :	Managing Director
Address :	7/56, Tilaknagar, Kanpur – 208002, Uttar Pradesh, India
Date of Birth/Age :	04.01.1942
Date of Appointment :	19.05.1995
Name :	Mr. Rohit Kapur
Designation :	Managing Director
Address :	7/56, Tilaknagar, Kanpur – 208002, Uttar Pradesh, India
Date of Birth/Age :	20.09.1977
Date of Appointment :	19.05.1995
Name :	Mr. Narendra Mitto
Designation :	Director
Address :	A – 105, 1^st Floor, Royal B lock, Eldrado Apartment, Tilaknagar, Kanpur – 208002, Uttar Pradesh, India
Date of Birth/Age :	14.08.1953
Date of Appointment :	01.05.1998

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2005

Names of Shareholders	No. of Shares
Mr. Dalip Kapur	390389
Mrs. Indu Kapur	364969
Mr. Rohit Kapur	382961
Mr. Anshuman Kapur	382884
Mr. Ramji Agnihotri	153
Mr. Narendra Mitto	50100
Mrs. Preeti Kapur	1226400
Mrs. Aarti Kapur	1226500
Mrs. Bharti Mitto	100
Lasalle Products India Limited	3000
Mrs. Shobha Agnihotri	153
Mr. Rohit Kapur and Mr. Anshuman Kapur Trust	3461
Total	4031070

Equity share breakup (Percentage of total equity)

Sr. No.	Category	Percentage
1.	Bodies corporate (not mentioned above)	0.07
2.	Directors or relatives of directors	99.84
3.	Other fifty (50) shareholders (other than listed above)	0.09
	Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Leather Goods.

Products :

ITC Code	Product Description
420211	Travel Goods, Similar Containers of Leather, Composition Leather, Patent Leather
640320	Footwear with Outer Soles and Uppers of Leather

Exports :

Countries :

v Italy

v USA

v Hong Kong

v China

v Africa

Imports :

Countries :

v France

Terms :

Selling :

L/C, Cash and Credit

Purchasing :

L/C, Cash and Credit

GENERAL INFORMATION

Customers :

Wholesalers

No. of Employees :

200

Bankers :

v Canara Bank

Overseas Branch, Civil Lines, Kanpur – 208001, Uttar Pradesh, IndiaCC, PCB – (Total Limit Rs. 175.000 millions)

Facilities :

Rs. In millions

Secured Loans

	31.03.2005	31.03.2004
From Banks
Canara Bank Term Loan	4.541	0.000
Canara Bank P/C	45.755	28.893
Canara Bank PCFC	4.912	11.093
Canara Bank OCC	32.067	30.998
Canara Bank P/S	26.289	16.384
	113.564	87.368
Car Loan from ICICI Bank Limited	0.089	0.433
From HDFC Bank Limited	0.000	0.000
Total	113.653	87.801

Notes:

1. Working Capital Loans from Bank are secured by way of hypothecation of stock in trade (Including Raw materials, Finished and Semi finished goods) and Book debts and are personally guaranteed by directors of the company.

Unsecured Loans

	31.03.2005	31.03.2004
From Directors	19.920	31.706
From Others	29.932	8.676
Total	49.852	40.382

Banking Relations :	Satisfactory
Auditors :
Name :	Rajiv Malhotra and Company Chartered Accountants
Sister Concerns :	5 to 6 Sister Concern Companies in Kanpur (Names not divulged).

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
110,00,000	Equity shares	Rs. 10/-each	Rs. 110.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
40,31,070	Equity shares	Rs. 10/-each	Rs. 40.310 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		40.310	40.310
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		266.689	276.375
4] (Accumulated Losses)		0.000	0.000
NETWORTH		306.998	316.685
LOAN FUNDS
1] Secured Loans		113.655	87.801
2] Unsecured Loans		49.853	40.384
TOTAL BORROWING		163.508	128.185
DEFERRED TAX LIABILITIES		0.000	0.000
TOTAL		470.506	444.870
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		130.562	139.272
Capital work-in-progress		0.000	1.646
INVESTMENT		57.392	37.392
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	174.689	150.878
	Sundry Debtors	87.374	78.388
	Cash & Bank Balances	3.576	12.548
	Other Current Assets	0.000	0.000
	Loans & Advances	122.243	114.473
Total Current Assets		387.882	356.287
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	104.193	88.625
	Provisions	1.138	1.138
Total Current Liabilities		105.331	89.763
Net Current Assets		282.551	266.324
MISCELLANEOUS EXPENSES		0.000	0.036
TOTAL		470.506	444.870

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2005	31.03.2004
Sales Turnover		253.188	269.868
Other Income		1.322	9.772
Total Income		254.510	279.640
Profit/(Loss) Before Tax		(9.686)	(15.164)
Provision for Taxation		0.000	0.000
Profit/(Loss) After Tax		(9.686)	(15.164)
Expenditures :
	Manufacturing Expenses	30.314	26.218
	Administrative Expenses	11.247	12.117
	Raw Material Consumed	177.849	187.874
	Selling and Distribution Expenses	12.787	12.492
	Increase/(Decrease) in Finished Goods	9.909	(13.315)
	Salaries, Wages, Bonus, etc.	12.257	14.169
	Financial Expenses	11.009	10.521
	Depreciation & Amortization	18.640	18.094
	Other Expenditure	(19.816)	26.634
Total Expenditure		264.196	294.804

KEY RATIOS

PARTICULARS		31.03.2005	31.03.2004
PAT / Total Income	(%)	(3.80)	(5.42)
Net Profit Margin (PBT/Sales)	(%)	(3.82)	(5.62)
Return on Total Assets (PBT/Total Assets}	(%)	(3.80)	(5.42)
Return on Investment (ROI) (PBT/Networth)		(0.03)	(0.05)
Debt Equity Ratio (Total Liability/Networth)		0.34	0.28
Current Ratio (Current Asset/Current Liability)		3.68	3.97

LOCAL AGENCY FURTHER INFORMATION

Trade References

v Mr. Pradeep – S S Chemicals – Kanpur

v Allana Group of Companies – Fort

Form 8

Name of the company	KCK EXPORTS LIMITED
Presented By	Mr. Dalip Kapur, Director
1) Date and description of instrument creating the change	Common hypothecation agreement dated 06.07.1995 required on 03.08.1995
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 60.000 millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	v Book Debts
4) Gist of the terms and conditions and extent and operation of the charge.	Interest @ 21.75% p.a.
5) Name and Address and description of the person entitled to the charge.	Canara Bank Overseas Branch, Civil Lines, Kanpur
6) Date and brief description of instrument modifying the charge	Limit increased from Rs. 60.000 millions to Rs. 72.500 millions on 16.06.2003 Hypothecation agreement dated 18.07.2005
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	A) 02.11.2004 limit increased from Rs. 72.500 millions to Rs. 174.821 millions regds. On 16.11.2004 D. No. 58. Additional security of land out Block B, Panki Kanpur and property situated at Fatehpur Roshnai, Uttar Pradesh, Kanpur. Other terms and conditions same. B) Limit increased from Rs. 174.821 millions to Rs. 204.821 millions other terms and conditions are same.

Form 8

This form is for	Modification of charge
Charge Identification (ID) number of the charge to be modified	90271742
Corporation identity number (CIN) or foreign company registrations number of the company	U19129UP1995PLC018080
Name of the company	KCK EXPORTS LIMITED
Address	87 – 88, Shahpur Kalpi Road, Panki, Kanpur – 208 020, Uttar Pradesh, India
Type of Charges	v Book Debts v Movable property (not being pledge) v Others
Particular of the charge holder	Name : Canara Bank Address : Overseas Branch, Civil Lines City : Kanpur State : Uttar Pradesh ISO country code : IN Pin code : 208001 e-mail ID : jkscoknp@gmail.com
Nature or description of the instrument creating or modifying the charge	Supplemental Common hypothecation agreement.
Date of the instrument creating charge	28.03.2008
Whether charge created or modified outside India	No
Amount Secure by the charge	Rs. 363.000 millions
Brief particulars of the principal terms and conditions and extent and operation of the charge	(a) Rate oif interest As per agreement of hypothecation / sanction terms. (b) Terms of repayment (i) Working Capital – Repayable on demand (ii) Term loans – As per existing repayment schedule. (c) Margin As per agreement hypothecation/ sanction terms. (d) Extent and operation of the charge The Company’s properties as mentioned hereunder (as per column no. 14) are hypothecated to secure following credit facilities aggregating to Rs. 363.000 millions granted by the Bank to the Borrower. (Breakup of Credit facilities as per annexure attached.)
Short particulars of the Property charged	(i) Hypothecation of all stocks of raw materials, goods in process, finished and manufactured goods and all other items of stocks in trade and stores, spares, components, machinery, vehicles, furniture and fixtures etc. and all other movable articles of the company situiated at Borrower’s premises godowns or elsewhere or in transit. (ii) All the Borrower’s present and future book debts, outstanding monies, bills receivables, claimsetc of company. (iii)Hypothecation of all plant and machineries (Both present ands future) of company.
Whether any of the property or interest therein under reference is not registered in the name of the company	No
Date of latest modification prior to the present modification	14.12.2007
Particulars of the present modification	The aggregate amount of various credit facilities granted by the Bank have now been enhanced from Rs. 333.000 millions to Rs. 363.000 millions. Therefore, total amount of charge secured against hypothecation of stocks, book debts, plant and machinery etc. as per details mentioned in column No. 14 above has now been enhanced from Rs. 333.000 millions to Rs. 363.000 millions.

Fixed assets

v Land and Buildings

v Plant and Machinery

v Furniture and Fixtures

v Computer

v Vehicles

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs. 43.37
UK Pound	1	Rs. 85.51
Euro	1	Rs. 68.08

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		45

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	Unfavourable & favourable factors carry similar weight in credit consideration. 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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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