MIRA INFORM REPORT

Report Date :

20.04.2011

IDENTIFICATION DETAILS

Name :	KARNAL MILK FOODS LIMITED

Registered Office :	134 K. M. Stone, Village Dadupur, G.T. Road, Karnal 132001, Haryana

Country :	India

Financials (as on) :	31.03.2010

Date of Incorporation :	26.11.1961

Com. Reg. No.:	05-031481

CIN No.: [Company Identification No.]	U15202HR1991PLC031481

Legal Form :	A closely held public limited liability company

Line of Business :	Manufacturer, exporter and trader of Milk Dairy Products

RATING & COMMENTS

MIRA’s Rating :

Ba (46)

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

Maximum Credit Limit :	USD 540000

Status :	Satisfactory

Payment Behaviour :	Usually correct

Litigation :	Clear

Comments :	Subject is an established company having satisfactory track. General financial position is satisfactory. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct. The company can be considered normal for business dealings 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.

ECGC Country Risk Classification List – April 1, 2010

Country Name

Previous Rating

(31.12.2009)

Current Rating

(01.04.2010)

India

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

LOCATIONS

Registered Office :	134 K. M. Stone, Village Dadupur, G.T. Road, Karnal 132001, Haryana, India
Tel. No.:	91-184-2388900
Fax No.:	91-184-2388100
E-Mail :	amitsehgalcs@gmail.com
Website :	www.karnamilk.com

DIRECTORS

As On 31.07.2010

Name :	Mr. Vipin Gupta
Designation :	Director
Address :	14, The Mall, Karnal 132001, Haryana, India
Date of Appointment :	26.11.1991
DIN No.:	00108338

Name :	Mr. Gian Parkash Gupta
Designation :	Director
Address :	14, The Mall, Karnal 132001, Haryana, India
Date of Appointment :	26.11.1991
DIN No.:	00108366

Name :	Mr. Vineet Gian Prakash Gupta
Designation :	Director
Address :	14, The Mall, Karnal 132001, Haryana, India
Date of Birth/Age :	15.11.1971
Date of Appointment :	26.11.1991
DIN No.:	00554467

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As On 31.07.2010

Names of Shareholders		No. of Shares
Ajay Bansal		20000
Ashok Nath Gupta		32010
Atul Aggarwal Karnal		20000
Akshay Sales Private Limited		60000
Dharmindra Bhai Nadiad		43590
Electrovisions India Private Limited		100000
Finance Leasing and Finance India Limited		115000
Gian Prakash Gupta		859958
Gopal Kishan Ch Karnal		41500
Hum Tum Marketing Private Limited		65000
KMF Solutions Limited		100000
Mega Top Promotors Private Limited		65000
Manni Mala Delhi Properties Private Limited		55000
Monisha Granite Limited		50000
Professional Consultancy		526380
Rukmani Gupta		502835
Sachet Media Private Limited		50000
Salwan Builders Developers		65000
Vipin Gupta		654717

As On 31.07.2010

Category	Percentage
Bodies corporate	19.42
Other top fifty shareholders	80.58
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer, exporter and trader of Milk Dairy Products

Products :	Karan" Pure Ghee Karan" and "Super Cow" Full Cream Milk Powder Karan" and "Super Cow" Skimmed Milk Powder.

GENERAL INFORMATION

Customers :

Britannia Industries
Parle Biscuits Limited
Hindustan Lever Limited
Nestle (India) Limited
Mother Dairy (Kolkata and Assam).

Bankers :

State Bank of India – Industrial Finance Branch, Jawahar Vyapar Bhawan, 14^th Floor, 1 Tolstoy Marg, New Delhi – 110001, Delhi, India
HDFC Bank Limited
ICICI Bank Limited
Axis Bank Limited

Facilities :

Secured Loans	31.03.210 (Rs. In Millions)	31.03.2009 (Rs. In Millions)
From: Sate Bank of India, Industrial Finance Branch, N Delhi
Cash Credit A/c	22.930	109.671
State Bank of India FCNRB	97.428	0.000
Term Loan	15.624	30.618
From: ICICI Bank Limited
Line of Credit-Vendor Financing	0.000	1.291
From: Axis Bank Limited
Line of Credit-Vendor Financing	0.000	40.235
From: HDFC Bank limited
Car Loan	1.700	0.000
From: Reliance Capital Limited
Car Loan	0.416	1.360
Buyers Credit	40.970	0.000
Total	179.068	183.175


Banking Relations :	--

Auditors :
Name :	Dinesh Kumar Jain Chartered Accountant
Address :	Geeta Mandir Market, Geeta Mandir Road, Panipat – 132103, Haryana, India
Tel. No.:	91-180-2641676/4019885
Pan No.:	ABIPJ4242Q

CAPITAL STRUCTURE

As On 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount

7000000	Equity Shares	Rs. 10/- each	Rs. 70.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

6652900	Equity Shares	Rs. 10/- each	Rs. 66.529 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		66.529	51.529	51.529
2] Share Application Money		8.374	18.464	18.064
3] Reserves & Surplus		61.136	55.379	49.247
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		136.039	125.372	118.840
LOAN FUNDS
1] Secured Loans		179.068	183.175	191.230
2] Unsecured Loans		0.000	00.000	0.000
TOTAL BORROWING		179.068	183.175	191.230
DEFERRED TAX LIABILITIES		20.453	19.899	18.547

TOTAL		335.560	328.446	328.617

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		127.043	131.705	133.488
Capital work-in-progress		0.000	0.000	0.000

INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	191.777	190.086	140.681
	Sundry Debtors	38.101	108.464	105.996
	Cash & Bank Balances	12.857	6.657	6.840
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	14.665	17.707	19.206
Total Current Assets		257.400	322.914	272.723
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	42.352	119.550	67.515
	Other Current Liabilities	6.530	6.623	10.079
	Provisions	0.000	0.000	0.000
Total Current Liabilities		48.882	126.173	77.594
Net Current Assets		208.518	196.741	195.129

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		335.560	328.446	328.617

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	1009.639	927.594	671.168
		Other Income	1.222	3.511	5.023
		TOTAL (A)	1010.861	931.105	676.191

Less	EXPENSES
		Raw material and purchase	905.581	879.413	651.074
		Manufacturing expenses	24.474	28.452	22.469
		Administration expenses	7.774	6.552	6.202
		Selling expenses	11.985	8.299	10.349
		Excess of closing stock over opening stock	22.876	(34.426)	(43.507)
		TOTAL (B)	972.690	888.290	646.587

Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		38.171	42.815	29.604

Less	FINANCIAL EXPENSES (D)		20.247	25.904	15.513

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		17.924	16.911	14.091

Less/ Add	DEPRECIATION/ AMORTISATION (F)		9.123	7.639	6.585

	PROFIT BEFORE TAX (E-F) (G)		8.801	9.272	7.506

Less	TAX (I)		3.044	3.140	2.824

	PROFIT AFTER TAX (G-I) (J)		5.757	6.132	4.682

	Earnings Per Share (Rs.)		0.87	NA	NA

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	0.57	0.66	0.69

Net Profit Margin (PBT/Sales)	(%)	0.87	0.99	1.12

Return on Total Assets (PBT/Total Assets}	(%)	2.29	2.04	1.62

Return on Investment (ROI) (PBT/Networth)		0.06	0.07	0.06

Debt Equity Ratio (Total Liability/Networth)		1.68	2.47	2.26

Current Ratio (Current Asset/Current Liability)		5.27	2.56	3.51

LOCAL AGENCY FURTHER INFORMATION

PERFORMANCE APPRAISAL:

During the year, company achieved turnover of Rs. 1009.639 millions in comparison to turnover of Rs. 927.594 millions during 2009-10. It has registered the growth of 8.84% in turnover.

Form 8:

Corporate identity number of the company

U15202HR1991PLC031481

Name of the company

KARNAL MILK FOODS LIMITED

Address of the registered office or of the principal place of business in India of the company

134 K. M. Stone, Village Dadupur, G.T. Road, Karnal 132001, Haryana, India

This form is for

Modification of charge

Type of charge

Book Debts

Movable Property

Floating Charge

Uncalled share capital

Immovable property

Any interest in immovable property

All current assets and fixed assets

Particular of charge holder

Name :	State Bank of India
Address :	Industrial Finance Branch, Jawahar Vyapar Bhawan, 14^th Floor, 1 Tolstoy Marg, New Delhi – 110001, Delhi, India
Email :	vk.jain@sbi.co.in

Nature of instrument creating charge

1. Supplemental Agreement Of Hyp. Of Goods And Assets For Increase In Oveall Limit (C2-A)

2. Memorandum Of Deposit For Extension Of Equitable Mortgage Of Property.

3. Form C-5

Date of instrument Creating the charge

23.09.2010

Amount secured by the charge

Rs. 366.000 Millions

Brief of the principal terms an conditions and extent and operation of the charge

Terms of Repayment –

CC - repayable on demand

Term loan - no change in terms and conditions governing the loans except that the rate of interest on term loan has been reset to 0.25% above SBAR, effective rate 12.5% p.a. w.e.f 12.11.2009

Margin –

Raw Material 25%

Stocks In Process 25%

Finished Goods 25%

Book Debts/ Receivables 40%

Bank Guarantee 10%

Letters Of Credit 10%

Extent and Operation of the charge –

First hypothecation charge on the entire current assets of the company, i.e. Inventories including goods in transit, receivables etc. First charge on all fixed assets of the company, including equitable mortgage of factory land and building situated at 134, km stone, G T Road, Dadupur, Karnal (Haryana)

Particulars of the property charged

First hypothecation charge on the entire current assets of the company, i.e. raw material, WIP, finished goods, goods in transit, receivables etc., both present and future. First charge on all fixed assets, both present and future including equitable mortgage of factory land and building situated at 134, km stone, G T Road, Dadupur, Karnal (Haryana)

Date of instrument modifying the charge

16.05.2009

Particulars of the present modification

Limit stand enhanced from Rs. 267.500 millions to Rs.. 366.000 millions as follows :

Cash credit Rs. 175.000 millions

Term loan i Rs. 15.000 millions

Term loan ii Rs. 47.500 millions

Bank guarantee Rs. 15.000 millions

Letter of credit Rs. 110.000 millions

Forward contract limit Rs. 3.500 millions

Fixed Assets:

Land
Building
Plant and machinery
Furniture and fixture
Office and other equipment
Vehicle
D G Set
Boiler
Milk Salyo Tank
Ghee Kattle
ETP
Building Expansion – I
Coiling Tower Expansion – II
Evaporator Expansion – II
Boiler Expansion – II
Ghee Kettle/Tanker/Blender/Mixture Silo
Packing Machine
Pestaurisetion
Expansion separator
Pipe and Fitting etc Expansion II
Lab equipments
Deep Freezer

AS PER WEBSITE DETAILS

HISTORY:

Established in the year 1993 with a processing capacity of mere 1.25 lac liters milk per day, KMFL has today reached a level of over 6 Lac liters milk per day. They started as a small company with a limited reach in the domestic market only. Today they are among the major exporters and importers of dairy products in India. Driven by there objective of providing quality products at reasonable price to masses, they have managed to reach the mile stone, where they are accerdited with all major international certification like ISO 9001 (QMS), 14001 (EMS) and 22000 (FSMS).

In tune with the international marketing objectives, there one of the office is strategically located only 9 Kms from International Airport, New Delhi (INDIA) and there plant is located in Karnal (Haryana) 134 km from New Delhi on National Highway No.1, being the richest milk belt of India. There plant is equipped with most modern processing facilities with a capacity of 6 Lac Liters per day and state of art laboratories to test raw material, monitor manufacturing process and finished product in hygienic conditions ensuring total quality management.

They are an approved vender and regular supplier to almost all the big MNC Dairies, Confectionaries, Bakeries, FMCG companies, Government Organisations and State Federations etc.

There strength lies in the efficient milk collection system directly from farmer to there milk plant within shortest time possible.

There customers satisfaction is the best stimulator for us to achive new height and create new standards.

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.44.68
UK Pound	1	Rs.72.56
Euro	1	Rs.63.53

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	5
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		46

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

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

MIRA INFORM REPORT

191.777

38.101

12.857

0.000

14.665

257.400

42.352

6.530

0.000

48.882

208.518

0.57

0.87

2.29

0.06

1.68

5.27

Unit