MIRA INFORM REPORT

Report Date :

19.04.2011

IDENTIFICATION DETAILS

Name :	KITEC INDUSTRIES (INDIA) LIMITED
Registered Office :	C-18/11, Jeevan, Bima Nagar, Borivali (W), Mumbai – 400 103, Maharashtra
Country :	India
Financials (as on) :	31.03.2009
Date of Incorporation :	31.01.1994
Com. Reg. No.:	22-076323
CIN No.: [Company Identification No.]	u74999mh1994plc076323
TAN No.: [Tax Deduction & Collection Account No.]	mumk05137G
Legal Form :	A closely held Public Limited Liability of the Company
Line of Business :	Manufacturer of revolutionary piping systems.

RATING & COMMENTS

MIRA’s Rating :

B ( 26 )

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

Maximum Credit Limit :	USD 550000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. Profitability of the company appears to be low. However, trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some 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 – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

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

LOCATIONS

Registered Office :	C-18/11, Jeevan, Bima Nagar, Borivali (W), Mumbai – 400 103, Maharashtra
Tel. No.:	91-22-28951144 / 28934413
Fax No.:	91-22-28942549 / 28934413
E-Mail :	services@kitecindia.com ho@kitecindia.com
Area :	Rented
Factory :	8 Madhuban Dam Road, Rakholi, Silvassa Dadra Nagar and Haveli – 400 396
Location :	Owned

DIRECTORS

As On : 30.09.2009

Name :	Mr. Narayan Dhuldhoy
Designation :	Director
Address :	42, Elcid, B G Kher Marg, Mumbai – 400 006, Maharashtra
Date of Birth/Age :	25.09.1934
Date of Appointment :	29.09.2006
DIN No :	00450567
Name :	Mr. Avinash R Laddha
Designation :	Director
Address :	C-18/11, Jeevandharm Jeevan Bima Nagar, Borivali (West), Mumbai – 40 1203, Maharashtra
Date of Birth/Age :	05.05.1947
Date of Appointment :	31.01.1994
DIN No :	00119190
Name :	Mr. Kamal Kumar Oswal
Designation :	Director
Address :	D-35, Defence Colony, New Delhi – 110 025
Date of Birth/Age :	25.09.1949
Date of Appointment :	31.01.1994
DIN No :	00160800
Name :	Mr. Mohanlal F Bafna
Designation :	Director
Address :	501 Prahlad 17- Linking Road, Santacruz West Mumbai – 400 054, Maharashtra
Date of Birth/Age :	12.10.1943
Date of Appointment :	08.07.1995
DIN No :	01727373
Name :	Mr. Rama Krishnan
Designation :	Director
Address :	G-14, Saket, New Delhi
Date of Birth/Age :	11.09.1935
Date of Appointment :	30.06.2004
DIN No :	00546256
Name :	Mr. Barry A Stiefel
Designation :	Director
Address :	5, Carlyle Close, Hampstead Garden Suburb, London, United Kingdom
Date of Birth/Age :	11.12.1949
Date of Appointment :	16.06.2007
DIN No :	01568308
Name :	Mr. Robin C Fisher
Designation :	Director
Address :	3 Winnington Road, Hampstead Garden Road, London, United Kingdom
Date of Appointment :	18.11.1995
DIN No :	00467025

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders (As on 30.09.2009)	No. of Shares
Laddha R Avinash	452930
Rathi R Sanjay	1100
Pandit R Murnalini	100
Dhuldhoya N Aayesha	100
Dhuldhoya N Nimeesha	100
Jain Hitendra	1000
Jain Shanta	500
Jain Deepesh	1000
Sariya Rita	500
Parmar D. Sarojben	2500
Pamar H. Dilip	2500
Chowhan K. Dinesh	2500
Bhuibhar R. Sudhakar	5000
Arora Ramesh	1500

AS ON :30.09.2009

Equity Share Breakup		Percentage of Holding
Category
Foreign Holdings (FIIs / Fcs / FFIs / NRIs / OCBs)		78.03
Bodies corporate		0.34
Directors or relatives of directors		18.40
Other top fifty shareholders		2.98
Others		0.25
	Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of revolutionary piping systems.
Imports :
Products :	Raw Materials
Countries :	Germany, China, USA
Terms :
Selling :	Cash, Credit
Purchasing :	Cash, Credit, L/C

PRODUCTION STATUS (As on : 31.03.2009 ):

Particulars	Unit	Installed Capacity	Actual Production
Multilayer Composite Pipes	Mio/Meters	7.180	1.967
PPR Pipes	In 000 Kgs	1.050	NIL
PVC Pipes	In 000 Kgs	1.400	2.528

GENERAL INFORMATION

Customers :

Retailers

No. of Employees :

22 (Approximately)

Bankers :

· Axis Bank, S V Road, Branch, Malad, Mumbai, Maharashtra

· State Bank of India, MIDC Branch, Andheri (East) Mumbai, Maharashtra

· Saraswat Co-op Bank Limited

Facilities :

Secured Loans	31.03.2009 (Rs. In Millions)	31.03.2008 (Rs. In Millions)
Foreign Currency Loans
From a Shareholder	152.850	119.910
Interest accrued and due on FC Loan	0.000	1.692
Less : TDS on above	0.000	(0.349)
Overdraft Facility
From Axis Bank Limited	28.088	126.161
From the Saraswat Co-op Bank Limited	9.860	9.565
Total	190.798	256.979

Unsecured Loans	31.03.2009 (Rs. In Millions)	31.03.2008 (Rs. In Millions)
Deposits from distributors	6.989	7.293
Total	6.989	7.293

Banking Relations :

---

Auditors :

Name :

M K Swadia

Chartered Accountant

Address :

314, Shriram Chambers, R C Dutt Road, Vadodara – 390 005, Gujarat

Holding Company :

Kitec Investment Holding Company Limited

CAPITAL STRUCTURE

As on: 31.03.2009

Authorised Capital :

No. of Shares	Type	Value	Amount
11150000	Equity Shares	Rs. 10/- each	Rs.111.500 millions
900000	5.25% Non – Cumulative Redeemable & Non – Convertible Preferences Shares	Rs. 40/- each	Rs. 36.000 millions
		Total	Rs.147.500 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
10243400	Equity Shares	Rs. 10/- each	Rs.102.434 millions
873900	5.25% Non – Cumulative Redeemable & Non – Convertible Preferences Shares	Rs. 40/- each	Rs. 34.956 millions
		Total	Rs.137.390 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2009	31.03.2008	31.03.2007
SHAREHOLDERS FUNDS
1] Share Capital		137.390	137.390	137.390
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		0.201	1.503	0.000
4] (Accumulated Losses)		0.000	0.000	(23.374)
NETWORTH		137.591	138.893	114.016
LOAN FUNDS
1] Secured Loans		190.798	256.979	32.543
2] Unsecured Loans		6.989	7.293	6.933
TOTAL BORROWING		197.787	264.272	39.476
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		335.378	403.165	153.492
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		158.893	101.459	59.145
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.100	0.100	0.100
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	37.725	36.543	34.893
	Sundry Debtors	25.426	26.578	36.871
	Cash & Bank Balances	119.904	251.578	45.970
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	36.633	21.642	8.163
Total Current Assets		219.688	336.341	125.897
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	14.138	11.485	9.904
	Current Liabilities	0.000	0.000	0.000
	Provisions	29.165	23.250	21.746
Total Current Liabilities		43.303	34.735	31.650
Net Current Assets		176.385	301.606	94.247
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		335.378	403.165	153.492

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2009	31.03.2008	31.03.2007
	SALES
		Income	95.152	105.879	95.543
		Resale	82.806	76.311	58.782
		Other Income	12.726	16.927	2.951
		TOTAL (A)	190.684	199.117	157.276
Less	EXPENSES
		Cost of Materials	49.592	47.194	46.635
		Cost of Resale	63.544	59.259	47.363
		Operation and Other Expenses	35.486	21.124	22.454
		Increase/(Decrease) in Finished Goods	2.918	4.836	(11.724)
		Increase/(Decrease) in excise duty on Finished Goods Stock	(1.063)	(1.261)	0.000
		Marketing Expenses	13.822	14.094	9.534
		TOTAL (B)	164.299	145.246	114.262
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		26.385	53.871	43.014
Less	FINANCIAL EXPENSES (D)		10.914	11.849	2.849
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		15.471	42.022	40.165
Less/ Add	DEPRECIATION/ AMORTISATION (F)		14.238	9.682	8.080
	PROFIT BEFORE TAX (E-F) (G)		1.233	32.340	32.085
Less	TAX (H)		(0.387)	(2.095)	(0.357)
	PROFIT AFTER TAX (G-H) (I)		0.846	30.245	31.728
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1.502	(23.375)	(55.103)
Less	APPROPRIATIONS
		Proposed Dividend on Preference Shares	1.835	4.588	0.000
		Tax on Dividend	0.312	0.780	0.000
	BALANCE CARRIED TO THE B/S		0.201	1.502	(23.375)
	IMPORTS
		Raw Materials	29.718	23.850	3.570
		Capital Goods	0.000	36.496	5.281
		Spares	0.000	0.238	0.129
		Others	0.510	0.376	0.140
	TOTAL IMPORTS		30.228	60.960	9.120
	Earnings Per Share (Rs.)		(0.13)	5.97	5.30

Particulars	31.03.2010
Sales Turnover (Approximately)	200.000

Expected Sales (2010-2011) : Rs. 230.000 Millions (Approximately)

KEY RATIOS

PARTICULARS		31.03.2009	31.03.2008	31.03.2007
PAT / Total Income	(%)	0.79	15.19	20.17
Net Profit Margin (PBT/Sales)	(%)	1.30	30.54	33.58
Return on Total Assets (PBT/Total Assets)	(%)	0.33	7.39	17.34
Return on Investment (ROI) (PBT/Networth)		0.01	0.23	0.28
Debt Equity Ratio (Total Liability/Networth)		1.75	2.15	0.62
Current Ratio (Current Asset/Current Liability)		5.07	9.68	3.98

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDTIORS DETAILS

(Rs. in millions)

Particulars	31.03.2009	31.03.2008	31.03.2007
Sundry Creditors
Micro, small and medium enterprises	6.853	6.357	5.991
Others	7.285	5.128	3.913
Total	14.138	11.485	9.904

PERFORMANCE REVIEW:

During the year, the Company has achieved sales (net of excise duty) of Rs.177.96 Millions as against sales of Rs.182.19 Millions, showing decrease of about 2.32% over the previous year due to slowdown in economy more particularly in housing sector and constantly increasing costs making product costlier.

The Company has no accumulated losses at the end of the year ended on 31 March 2009. The sales of KiTEC Composite pipes during the year under review have decreased by 13% over the last year in quantity terms and by 8% in terms of value.

Besides the slow down in economy, there is substantial increase in competition from new local manufacturers as well as from Chinese imports. With constant increase in raw material prices and ever increasing competition, the margins are under pressure.

The Government of India has introduced safeguard duty on aluminium strips w.e.f.23 March 2009 and the rate is 21%. It is unfortunate for them as we do not have any local manufacturer for the aluminium strips as required by us.

EXPANSION and FUTURE PLANS:

The Company has completed the expansion of factory building and work on offices is in progress. The Company has commissioned the line to manufacture pipes of higher sizes as well as a line to produce the PVC SWR pipes.

TRADE REFERENCES

· Kribhco

· Essar, Gujarati

FIXED ASSETS

· Land

· Compound wall

· Tube Well

· Building

· Mould

· Building

· Ownership Flats

· 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 records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

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

3] Asset Declaration :

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

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

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

Charges or investigation registered against subject: None

7] Criminal Records

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

8] Affiliation with Government :

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

9] Compensation Package :

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

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

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

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

CONTRAVENTION

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.27
UK Pound	1	Rs.72.08
Euro	1	Rs.63.66

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	2
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	2
--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	no
--LISTED	YES/NO	no
--OTHER MERIT FACTORS	YES/NO	yes
TOTAL		26

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
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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.