MIRA INFORM REPORT

Report Date :

27.09.2008

IDENTIFICATION DETAILS

Name :	KULKARNI POWER TOOLS LIMITED
Formerly Known As :	KULKARNI BLACK AND DECKER
Registered Office :	At and Post Shirol, Dist. Kolhapur, Shirol – 416 103, Maharashtra
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	30.07.1976
Com. Reg. No.:	19147
CIN No.: [Company Identification No.]	L29130MH1976PLC019147
TAN No.: [Tax Deduction & Collection Account No.]	KLPK01344A
PAN No.: [Permanent Account No.]	AAACK7368Q
Legal Form :	Public Limited Liability Company. Company’s shares are listed on the Stock Exchange.
Line of Business :	Manufacturer, Suppliers and Exporter of Precision Industrial Blowers and Fans

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 830000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track recods. Trade relations are fair. Financial position is good. Payments are reported and as per commitments. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a medium to long-run.

LOCATIONS

Registered Office :	At and Post Shirol, Dist. Kolhapur, Shirol – 416 103, Maharashtra, India
Tel. No.:	91-2322-661500
Fax No.:	91-2322-661546
E-Mail :	kptl@sancharnet.in kptho@vsnl.net
Website :	www.kpt.co.in
Factory :	5/102, Reha Apartment, Near LIC Office, Aundh Road, Pune – 411 001, Maharashtra, India
Tel. No.:	91-20-25812724 / 25812725
Mobile No :	91-9225838922 / 9225838923
Fax No.:	91-20-25812725

DIRECTORS

Name :	Mr. P D Gune
Designation :	Chairman
Name :	Mr. M L Apte
Designation :	Director
Name :	Mr. D C Shroff
Designation :	Director
Name :	Mr. A A Kulkarni
Designation :	Joint Managing Director
Name :	Mr. P A Kulkarni
Designation :	Vice Chairman and Managing Director
Name :	Mr. S N Inamdar
Designation :	Director
Name :	Mr. S S Shirgaokar
Designation :	Director
Name :	Mr. D B Kulkarni
Designation :	Whole Time Director

BUSINESS DETAILS

Line of Business :	Manufacturer, Suppliers and Exporter of Precision Industrial Blowers and Fans
Products :	· Twin Lobe Blower · Centrifugal Fans · Axial Flow Fans · Acoustic Hood
Brand Names :	Postmaster
Exports :
Countries :	· East Africa · Nigeria · South Africa · South East Asia and SAARC countries

PRODUCTION STATUS

(As on 31.03.2008)

(Rs. In Millions)

Particulars	Unit	Installed Capacity
Portable Power Tools		Refer Note below
Blowers		Refer Note below
Electricity	KWH per annum	4.500

Notes :

· Most of the Plant and Machinery being common for different products manufactured by the Company and Installed Capacity being dependent on product-mix, which in turn, is decided by the actual demand for various products, from time to time, and also on availing subcontracting facilities, it is not feasible for the Company to indicate the exact Installed Capacity.

· The Company does not require licence to manufacture the items produced by it.

Production

Product	Unit	Quantity
Portable Power Tools	Nos.	173685
Blowers	Nos.	949
Electricity	KWH	2016343

GENERAL INFORMATION

Customers :

· Reliance Industries

· Larson and Toubro

· Crompton Greaves

· Ajanta Pharma Limited

· Ashoka Organic India Limited

· Ashok S.S.K. Limited

· Ashok Alcochem Limited

· Apex Innovation Limited

· Alfa Packaging

· Annapurna Dying and Printing

· Arklite Spec. Lamp Limited

· Aireff Detoc Inc.

· Bagadia Colourchem Limited

· Bhogawati S.S.K. Limited

· Bombay Oxygen Company Limited

· Batliboi Limited

· Britco Foods

· Bajaj Auto Limited

No. of Employees :

400

Bankers :

· Bank of Maharashtra, Sagli

· IDBI Bank Limited, Sangli

Facilities :

Secured Loans	(As on 31.03.2008) Rs. In millions
Loans and advances from Banks
Cash/Export Credit Facilities (Secured by hypothecation of stocks and book debts and mortgage of immovable property)	144.529
Term Loans (Secured by hypothecation of machinery purchased)	23.226
Term Loans (Secured by hypothecation of vehicles)	0.898
Term Loans (Secured by mortgage of immovable property)	13.177
Term Loans (Secured by first charge on machinery purchased and second charge on gross block of the Company)	42.722
Term Loans (Secured by first charge on machinery purchased and mortgage of immovable property constructed)	42.366
Loans and advances from others (Secured by hypothecation of machinery purchased)	1.633
Total	268.551
Out of above loans
Loans guaranteed by Managing Director and Joint Managing Director	260.694
Loans guaranteed by Joint Managing Director	6.959
Unsecured Loans
Fixed deposits (Deposits from Directors Rs.0.050 million)	4.184
Interest free sales tax loan	69.826
Short-term loans and advances:
From Others	4.500
Total	78.510

Banking Relations :	Good
Auditors :
Name :	M/s. P G Bhagwat Chartered Accountants
Address :	Suite No. 101-102, “Orchard”, Dr. Pai Marg, Baner, Pune – 411 045, Maharashtra, India

CAPITAL STRUCTURE

(As on 31.03.2008)

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.5/- each	Rs.50.000 millions
3000000	Preference Shares	Rs.10/- each	Rs.30.000 millions
	Total		Rs.80.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
3400000	Equity Shares	Rs.5/- each	Rs.17.000 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		17.000	17.000	17.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		149.368	123.641	106.000
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		166.368	140.641	123.000
LOAN FUNDS
1] Secured Loans		268.551	210.454	156.300
2] Unsecured Loans		78.510	73.360	83.600
TOTAL BORROWING		347.061	283.814	239.900
DEFERRED TAX LIABILITIES		43.429	41.763	0.000
TOTAL		556.858	466.218	362.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		312.936	283.172	218.700
Capital work-in-progress		13.640	0.665	0.800
INVESTMENT		0.665	0.665	0.600
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	110.176	108.246	90.800
	Sundry Debtors	167.342	124.507	127.100
	Cash & Bank Balances	13.731	14.477	9.700
	Other Current Assets	0.881	0.347	0.000
	Loans & Advances	53.987	38.745	42.000
Total Current Assets		346.117	286.322	269.600
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	114.089	108.922	122.500
	Provisions	9.378	6.134	4.300
Total Current Liabilities		123.467	115.056	126.800
Net Current Assets		222.650	171.266	142.800
MISCELLANEOUS EXPENSES		6.967	10.450	0.000
TOTAL		556.858	466.218	362.900

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		579.709	441.927	430.300
Other Income		7.985	6.404	9.700
Total Income		587.694	448.331	440.000
Profit/(Loss) Before Tax		45.535	44.332	28.700
Provision for Taxation		11.610	20.758	10.000
Profit/(Loss) After Tax		33.925	23.574	18.700
FOB Value of Exports		96.658	57.248	0.000
Imports :
	Raw Materials	66.198	50.235	0.000
	Capital Goods	11.632	7.220	0.000
Total Imports		77.830	57.455	0.000
Expenditures :
	Excise Duty	0.000	0.000	53.100
	Selling and Administration Expenses	0.000	0.000	29.100
	Raw Material Consumed	386.650	273.921	245.800
	Payments and benefits to employees	33.396	28.618	0.000
	Operating and Other Expenses	63.184	50.208	0.000
	Increase/(Decrease) in Finished Goods	0.000	0.000	(28.300)
	Other Manufacturing Expenses	0.000	0.000	32.700
	Employee Cost	0.000	0.000	28.200
	Interest and Finance charges	29.132	25.459	21.900
	Miscellaneous Expenses	0.000	0.000	4.000
	Power & Fuel	0.000	0.000	6.200
	Depreciation & Amortization	26.313	23.181	18.600
	Other Expenditure	3.484	2.612	0.000
Total Expenditure		542.159	403.999	411.300

QUARTERLY RESULTS

PARTICULARS	30.06.2008
Type	1st Quarter
Sales Turnover	149.800
Other Income	14.400
Total Income	164.200
Total Expenditure	127.500
Operating Profit	36.700
Interest	7.400
Gross Profit	29.300
Depreciation	7.400
Tax	4.100
Reported PAT	18.600

KEY RATIOS

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
PAT / Total Income	(%)	5.77	5.26	4.25
Net Profit Margin (PBT/Sales)	(%)	7.85	10.03	6.67
Return on Total Assets (PBT/Total Assets}	(%)	6.91	7.78	5.88
Return on Investment (ROI) (PBT/Networth)		0.27	0.32	0.23
Debt Equity Ratio (Total Liability/Networth)		2.83	2.84	2.98
Current Ratio (Current Asset/Current Liability)		2.80	2.49	2.13

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject was formerly called Kulkarni Black and Decker, incorpoated in 1976 its name was changed to Kulkarni Power Tools (KPTL) in 1994. It was promoted by P Kulkarni, a technocrat. P D Gune is the Chairman and P A Kulkarni, the Managing Director.

The company commenced commercial production in 1978 at its unit in Shirol, Kolhapur district. It is engaged in the manufacture of power tools. The range includes basic drills, grinders and sanders with an installed capacity of 75,000. The company markets its products through a network of 175 dealers and 95 authorised service centres. 

The company is the only power-tool manufacturer in India to have been accorded the ISI and ISO 9001 accreditation by BVQI. 

In Apr.'94, Subject tied up with Ryobi, Japan, to market its products. It diversified into cotton yarn processing with an Italian collaboration and set up a unit at Chakan, near Pune, at an estimated investment of Rs 300.000 millions.

MANAGEMENT REVIEW / MANUFACTURING FACILITIES 

The strong growth in the Indian economy continued in 2007-08 albeit with inflationary trends. due to hike in the prices of oil and industrial raw materials such as steel, non-ferrous metals, in the domestic and international markets. Despite this unfavourable factor, the outlook for power tools in domestic market continues to be positive. 

The Company also showed a growth of 31% in the turnover and crossed the 1,75,000 numbers in the production of power tools. 

The Management expects power tool and industrial blower markets to grow at double digit rate due to the growth in the Indian economy. 

To cater to the growing business of industrial blowers, the Company has built a separate factory building at the existing premises. The Directors have proposed to invest substantially in increasing power tool manufacturing capacity in coming years and, therefore, would like to conserve the resources. 

During the year, Industrial relations continued to be harmonious. 

EXPORTS 

The Company is making strong efforts in the export market. The FOB value of exports during the year is Rs.96.658 millions which was Rs.57.248 millions in the previous year, showing a growth of over 68%. 

DIVIDEND: 

The Directors are recommend a payment of dividend at the rate of 30% for the year ended 31st March, 2008. 

FIXED DEPOSITS 

During the year, the Company accepted Fixed Deposits of Rs.5.383 millions and repaid the Fixed Deposits of Rs.9.549 millions. Whereas, 35 deposit holders aggregating fixed deposits of Rs.1.409 milions were due for repayment but remained unclaimed, out of which subsequently two deposit holders having their deposits of Rs.0.916 millions, renewed the deposits. 

FIXED ASSETS

Tangible

Operating

· Freehold Land

· Leasehold Land

· Buildings

· Plant and Machinery

· Dies, Moulds and Patterns

· Furniture and Fixtures

· Vehicles

Given on Lease

· Leasehold Land

· Buildings

· Plant and Machinery

Intangible

· Technical Know-how

· Computer Software

WEB DETAILS

Profile

Incepted in the year 1976, Subject, has established itself as an eminent manufacturers, suppliers and exporters of precision industrial blowers and fans as a Joint Venture with Decker Corporation, USA. In the year 1993 KPT became the independent company and solely involved with the purpose to create a benchmark in the industry.

Under the able guidance of the mentor Kiran Pathak, they have entrenched themselves as a reliable and dependable company relentlessly serving its customers. It is his valuable experience in the associated field that has catapulted them to success. Sharing equal screen space is the assortments that are manufactured out of the finest material. Reliability, safety, performance, user orientated innovation, ergonomics, value added services bear testimony of the quality standards. Keeping in line with quality assurance, the tools are passed through stringent quality testing parameters which are CSA certified. The well equipped standards, room and state of the art laboratory ensures world class portable electric tools including saws, planers, drills, hammers, grinders, sanders and many more.

The customized range has made them the one stop solution for various electric power tools and allied accessories used in different industries. Breaking newer grounds, they are also providing technical support for pneumatic conveying for handling cement and fly ash. Besides this, they are also in the process of retrofitting jobs for pneumatic conveying systems. It is these varied initiatives that has made them one of the key players within the domestic and international market.

Product Portfolio

Leveraging on advanced machinery we have been able to offer wide range of precision engineered electric power tools. They use superior quality raw material to manufacture the gamut of durable and sturdy tools procured from trusted vendors based at across the country. The raw material includes cast iron, casting, aluminum casting, aluminum pressure die casting, industrial plastic parts, press parts, lamination and others.

The wide range of power tools encompasses twin lobe blower, centrifugal fans, axial flow fans and acoustic hood. Some of the important features of our manufactured industrial supplies are:

· Durable

· Superior functionality

· Sturdy construction

· Corrosion resistance

· Excellent Tensile Strength

· Reliable

· Efficient power consumption

Apart from the regular electric power tools they also deal in drills, angle grinders, sanders, polishers, tile cutters, cut-off saws, valve master refacers and others. However, they also have the ability to tailor make the gamut as per the specification detailed by the clients.

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.46.43
UK Pound	1	Rs.85.38
Euro	1	Rs.67.95

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--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	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		63

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