MIRA INFORM REPORT

Report Date :

25.04.2011

IDENTIFICATION DETAILS

Name :	DIAMOND FLEX INDUSTRIES
Registered Office :	C – 21, Panki Industrial Area, Site – 1, Kanpur - 208 001, Uttar Pradesh
Country :	India
Financials (as on) :	24.11.2010
Date of Incorporation :	15.04.2010
PAN No.: [Permanent Account No.]	AAHFD7386B
Legal Form :	Partnership concern with an unlimited liability of the partners
Line of Business :	Manufacturer of Poly Bags.

RATING & COMMENTS

MIRA’s Rating :

B

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

Status :	New Concern
Payment Behaviour :	Unknown
Litigation :	Clear
Comments :	Subject is a new concern and yet to commence activities. The valuation report has not been provided. The networth statement however seems to be acceptable. No further details or payment could be made available. It would be advisable to take adequate securities while dealing with subject.

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

INFORMATION PARTED BY

Name :	Mr. Riyaz Ahmed
Designation :	Partner
Contact No.:	91-9956297786
Date :	23.04.2011

LOCATIONS

Registered Office/ Factory :	C – 21, Panki Industrial Area, Site – 1, Kanpur - 208 001, Uttar Pradesh, India
Mobile No.:	91-9956297786 (Mr. Riyaz Ahmed)
E-Mail :	Diamondflex@rediff.com
Area :	2700 sq ft
Location :	Leased

PARTNERS

Name :	Mr. Riyaz Ahmed
Designation :	Partner
Address :	133/ 16A, Juhi Gawshala, Kanpur, Uttar Pradesh, India
Date of Birth/Age :	37 Years
Qualification :	B.E. Mech.
Experience :	9 Years
Name :	Mr. Tah Hasan Abdi
Designation :	Partner
Address :	506, Sangeeta Apartment, Civil Lines, Kanpur, Uttar Pradesh, India
Date of Birth/Age :	37 Years
Qualification :	B.E. Mech.
Experience :	9 Years

BUSINESS DETAILS

Line of Business :

Manufacturer of Poly Bags.

GENERAL INFORMATION

No. of Employees :	9 (In office – 2, In factory – 7) (Approximately)
Bankers :	Corporation Bank, Kanpur, Uttar Pradesh, India

Banking Relations :	--
Auditors :	Not Available

CAPITAL STRUCTURE

As on 24.11.2010

Partner’s Capital	Amount (Rs. in millions)
T.H. Abdi	0.706
Riyaz Ahmed	0.706
Total	1.412

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		24.11.2010
SHAREHOLDERS FUNDS
1] Partner’s Capital		1.412
2] Share Application Money		0.000
3] Reserves & Surplus		0.000
4] (Accumulated Losses)		0.000
NETWORTH		1.412
LOAN FUNDS
1] Secured Loans		0.000
2] Unsecured Loans		0.000
TOTAL BORROWING		0.000
DEFERRED TAX LIABILITIES		0.000
TOTAL		1.412
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		0.230
Capital work-in-progress		0.000
INVESTMENT		0.000
DEFERREX TAX ASSETS		0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	0.000
	Sundry Debtors	0.000
	Cash & Bank Balances	1.047
	Other Current Assets	0.000
	Loans & Advances	0.120
Total Current Assets		1.167
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	0.000
	Other Current Liabilities	0.000
	Provisions	0.000
Total Current Liabilities		0.000
Net Current Assets		1.167
MISCELLANEOUS EXPENSES		0.015
TOTAL		1.412

KEY RATIOS

PARTICULARS	24.11.2010
Debt Equity Ratio (Total Liability/Networth)	0.00
Current Ratio (Current Asset/Current Liability)	0.00

LOCAL AGENCY FURTHER INFORMATION

PROJECTED BALANCE SHEET

(Rs. in millions)

LIABILITIES		2012	2013	2014	2015	2016
	Cons. Per.	1^st Year	2^nd Year	3^rd Year	4^th Year	5^th Year
CAPITAL
Opening Balance	--	2.500	3.500	4.500	5.500	6.500
Addition during the year	2.500	--	--	--	--	--
Add: Profit after tax	--	1.500	1.600	1.700	1.850	2.000
Less: Drawings	--	0.500	0.600	0.700	0.850	1.000
	2.500	3.500	4.500	5.500	6.500	7.500
Bank Loan T/L	1.500	1.200	0.900	0.600	0.300	--
Bank C/C	--	5.000	5.000	5.000	5.000	5.000
	4.000	9.700	10.400	11.100	11.800	12.500
ASSETS
Fixed Assets	2.000	1.800	1.620	1.460	1.320	1.200
Stock	--	4.000	4.000	4.000	4.000	4.000
Debtors	--	3.000	3.300	3.600	3.900	4.200
Advances	--	0.500	0.500	0.500	0.800	1.000
Other Current Assets	--	0.200	0.500	0.500	0.800	1.000
Cash Bank Balance	2.000	0.200	0.480	1.040	0.980	1.100
	4.000	9.700	10.400	11.100	11.800	12.500

__________________________________________________________________________________________

PROJECTED PROFITABILITY STATEMENT

(Rs. in millions)

PARTICULARS	2012	2013	2014	2015	2016
	1^st Year	2^nd Year	3^rd Year	4^th Year	5^th Year
Capacity Utilization	70%	80%	85%	90%	100%
Income
Sales	25.000	27.500	30.000	32.500	35.000
Expenses
Raw Material Consumed	21.000	23.100	25.200	27.300	29.400
Wages	0.600	0.700	0.800	0.900	1.000
Electricity	0.400	0.450	0.500	0.550	0.600
Repair and Maintenance	0.100	0.150	0.200	0.250	0.300
Advertisement	0.100	0.150	0.200	0.250	0.300
Administrative	0.200	0.250	0.300	0.350	0.400
Interest to Bank C/C	0.500	0.500	0.500	0.500	0.500
Interest to Bank T/L	0.200	0.160	0.120	0.080	0.040
Depreciation	0.200	0.180	0.160	0.140	0.120
Total	23.300	25.640	27.980	30.320	32.660
Net Profit	1.700	1.860	2.020	2.180	2.340
Less: Income Tax	0.200	0.260	0.320	0.330	0.340
Profit After tax	1.500	1.600	1.700	1.850	2.000
Add: Depreciation	0.200	0.180	0.160	0.140	0.120
Cash Accrual	1.700	1.780	1.860	1.990	2.120

__________________________________________________________________________________________

CALCULATIONS OF DSCR AND ISCR:

Repayment years for Term Loan	1	2	3	4	5	Total
Year ended on	1^st Year	2^nd Year	3^rd Year	4^th Year	5^th Year
1. NET PROFIT	1.500	1.600	1.700	1.850	2.000	8.650
2. DEPRECIAITON	0.200	0.180	0.160	0.140	0.120	0.800
3. INTEREST-TL	0.200	0.160	0.120	0.080	0.040	0.600
TOTAL (A)	1.900	1.940	1.980	2.070	2.160	10.050
1. INSTALLMENT	0.300	0.300	0.300	0.300	0.300	0.300
2. INTEREST-TL	0.200	0.160	0.120	0.080	0.040	0.600
TOTAL (B)	0.500	0.460	0.420	0.380	0.340	2.100
Debt Service Coverage Ratio (A/B)	3.80	4.22	4.71	5.45	6.35
Average DSCR of 7 years
						4.79
INTEREST TO BANK	7.00	6.60	6.20	5.80	5.40
Cash Accrual for ISCR	24.00	24.40	24.80	25.70	26.60
Interest Service Coverage Ratio	3.43	3.70	4.00	4.43	4.93

Notes on DSCR

Average DSCR in the tenure of Loan period is 4.79 this is above to the accepted level.

Therefore, repayment of term loan should not have any problem.

Notes on ISCR

Interest Service Coverage ratio is also above to the acceptable norms, hence accepted.

_____________________________________________________________________________________

STATEMENT SHOWING ASSETS AND LIABILITIES (NET WORTH STATEMENTS)

Name of the Applicant: Mr. Tah Hasan Abdi

Name of the Co-Applicant: Mr. Riyaz Ahmed

Immovable Properties	Applicant	Co-Applicant
Address of the Property with Survey No./ Door No. etc.	Khata No.352, Umran Rania Industrial Area, Kanpur	Khata No.352, Umran Rania Industrial Area, Kanpur
Description: Land/ Site/ Building	Land	Land
Whether free hold/ lease hold	Freehold	Freehold
Type of property: Commercial/ residential/ agricultural	Agriculture	Agriculture
Extent of land	5 Bigha Approximately	5 Bigha Approximately
Mortgaged for availing loan in any, details thereof	N.A.	N.A.
Present market/ Assessed value	Rs.5.000 millions	Rs.5.000 millions

Investment in Business Capital
Name of the Company/ firm/ concern in which investment is made	Diamond Flex Industries By way of equity to be invested Rs.1.250 millions	Diamond Flex Industries By way of equity to be invested Rs.1.250 millions
Date of investments	--	--
Present value of investments	Rs.1.250 millions	Rs.1.250 millions

Deposit held with Banks/ Companies/ Other lender, etc.:
Name of the Bank	State Bank if India, Motijheel	State Bank of Bikaner and Jaipur, Basant Bihar
Date of deposits	--	--
Nature of deposits	Savings Bank	Savings Bank
Present value of deposits	Rs.0.100 million	Rs.0.015 million

Vehicles owned
Model/ Make	2003 Santro	2003 Alto
Date of Purchase	May 2003	November 2003
Whether Hypothecated for loan	N.A.	N.A.
Details of loan against vehicle	--	--
Present market value	Rs.0.200 million	Rs.0.215 million

Other Assets:
Jewellery	Rs.0.200 million	Rs.0.180 million
Plant and Machinery	--	--
Other Assets if any (Household goods)	Rs.0.100 million	Rs.0.100 million
Total value of Other Assets	Rs.0.300 million	Rs.0.280 million

Total Assets

Rs.6.850 millions

Rs.6.760 millions

Total Liabilities

Nil

Nil

Net Worth (Assets – Liabilities)

Rs.6.850 millions

Rs.6.760 millions

__________________________________________________________________________________________

TECHNO ECONOMIC FEASIBILITY REPORT

PROJECT AT A GLANCE

1. Name	DIAMOND FLEX INDUSTRIES
2. Constitution	PARTNERSHIP
3. Name of Partner’s	Shri Riraz Ahmad Shri T.H. Abdi
4. Factory and Registered Office	PLANT: Panki, KANPUR
5. Date of establishment	April 2010
6. Project	Packaging Industries
7. Capacity	1200 KG Per Day
8. Status	SSI
9. Project Cost	Rs.9.000 millions
10. Promoter’s Contribution	Rs.2.500 millions
11. Bank Finance	Rs.5.000 millions Working Fund Rs.1.500 millions Term Loan
12. Security	Primary - Stock and Book Debt and all other current and Fixed Assets. In addition to above the project will be covered under CGTS.
13. Net-worth of Borrower	Rs.5.500 millions
14. Net-worth Guarantor	Rs.5.500 millions
15. License	16/04/2010

INTRODUCTION:

Now a days, the Mono Layers Co-extruded blown film is laying a major role in the packaging INDUSTRIES. It is replacing the conventional packing materials like paper, aluminum foil, tin, glass etc. These films are considered for packing purpose because of specific requirement of self-life and protection to product. The other advantages are excellent resistance to puncturing, heat salability, gas barrier, high mechanical property high bursting strength etc. Due to these properties these films are having very good scope for packaging.

Shri Riyaz Ahmad and T.H. Abidi are promoters for the firm.

PROMOTERS:

Subject is a partnership firm between:

Shri Riyaz Ahmad and Shri T H Abidi.

Shri Riyaz Ahmad, aged about 37 yrs, is a B.E. Mechanical, AFE from lIT, Kanpur, has experience of manufacturing and marketing of more than 12 years. And having very good relation in industries.

Shri T. H. Abidi, is also B.E. mechanical engineer and AFE from IIT Kanpur and possess more than 12 years experience of INDUSTRIES.

Presently they are having good relation in Food Grade Packaging, mainly for Frozen Food Industries.

Both the partners are young, enthusiastic and full of entrepreneurship, wants to adopt latest technology of packing INDUSTRIES.

PROCESSING:

Mixed Grainuels is put in hopper, from hopper it is heated and screwed through screweder machine. It is blown through air and tube is produced in the form of role in different size as per requirement.

Thereafter it is printed or sold plain as per the requirement of the customer.

COST OF PROJECT

	Amount (Rs. in millions)
Land and Building	Lease
Plant and Machinery	2.000
Working Capital	7.000
TOTAL	9.000

MEANS OF FINANCE

(Rs. in millions)

	Owners Margin	Bank’s Share	Total
Fixed Assets	0.500	1.500	2.000
Working Capital	2.000	5.000	7.000
TOTAL	2.500	6.500	9.000

COMMENT OF COST OF PROJECT AND MEANS OF FINANCE

· Land and Building:-

The partners will have already entered into Rental agreement for establishing a factory with the party

· Plant and Machinery:-

Cost of plant and machinery will required an investment of Rs.2.000 millions.

· Working Capital:-

Working capital is required for Stock and Book to the tune of Rs.7.000 millions.

Means of Finance:-

· Capital: - Partners will contribute Rs.2.500 millions towards Capital as and when required.

· Term Loan: - The firm requires a term loan of Rs.1.500 millions towards project assuming 25% as margin, to be utilized in Plant and Machinery.

· CC Limit: - Total working capital requirement towards Stock and Book Debt is estimated to be Rs.7.000 millions against which firm has a CC Limit of Rs.3.000 millions, assuming 25% margin

· Book Debt Limit: - Firm has projected to avail Book Debt Limit of Rs.2.000 millions assuming 30% margin on A-Category customers.

IMPLEMENTATION SCHEDULE:

1- Development of Building Shed - 5 days

2- Acquisition of Plant and Machinery - 15 Days

3- Installation of machine - 05 Days

4- Commercial Production - 05 days

TOTAL - 1 Month

DETAILS OF PLANT MACHINARY:

1- Rotary Extruder + Extra Heater with double die - 2 Nos.

2- Sealing Cutting Machine

a- Single Layer

b- Double or three layers

3- Tools and Dies

Total cost will be @ Rs.2.000 millions including installation expenses.

SALES @ 100% CAPACITY:

600 k.g. per day Plain @ Rs.95/- per k.g.

600 k.g. per day shrink @ Rs.100/- per k.g.

Assuming 300 working days per year

CAPACITY IS CALCULATED AS UNDER:

300 days X 600 k.g. @ Rs. 95 = 17.100 millions

300 days X 600 k.g. @ Rs. 100 = Rs.18.000 millions

Total = Rs.35.100 millions

Say Rs.35.000 millions

STATEMENT OF WORKING CAPITAL REQUIREMENT

Assumptions:-	Amount (Rs. in millions)
Sales P.A	= 20.000
Printed	= 15.000
Plain	= 5.000
Sales P.M.	= 1.667
Purchase P.A.	= 16.800
Purchase P.M.	= 1.400

WORKING NOTE FOR STOCK AND BOOK DEBT

A- Stock in hand:

	Amount (Rs. in millions)
Raw Material in hand One month	2.100
Raw Material in process ½ month	0.725
Finished Goods ½ month	0.750
Advance to Suppliers	0.500
	4.075

B- Book Debt:

Sales for the year – Rs.25.000 millions

Sales per 45days month – Rs.3.300 millions

Source of Finance

PARTICULARS	TOTAL	MARGIN	OWNERS CONTRIBUTION	BANK SHARE	(Rs. in millions)
Raw Material	4.075	25%	1.019	3.056	OR 3.000
Book Debt	3.000	30%	1.000	2.000	OR 2.000
Total					5.000

Assumptions on Profitability Statement

1. Sales are taken at as follows.

At 70% capacity – 25.000 millions

At 80% capacity – 27.500 millions

At 85% capacity – 30.000 millions

At 90% capacity – 32.500 millions

At 100% capacity – 35.000 millions

2. Main Supplier of Raw Material is Reliance and GAIL. Payment is made in advance for purchasing the material. The raw material consumption is about 85 % of cost of Sales.

3. Wages are paid as under:

	Amount (Rs. in millions)
Manager @ 8000.00 P.M	0.008
Three Operators 4000/-	0.012
Three semi Skilled Labour @ 3500 P.M	0.011
Four Helper @ Rs.3000/P.M	0.012
Total P.M	0.043

Total Payment for the year 42500X12= Rs.0.510 million

10% increment every year is considerable.

4. Printing Charges is taken Approximately Rs.8 per Kg.

5. Electricity is calculated as under:

23H.PX.746 Unit FactorX300X16X7 = Rs.0.576 million

60 %Capacity = Rs.0.346 million

6. Advertisement is on estimated basis.

7. Depreciation is calculated as per Income Tax Act

8. Interest on Term Loan and Interest on C.C is calculated at 12% P.A.

9. Liability of Income Tax is calculated as per Income Tax Rules, after giving effect of additional depreciation and Partners Salary.

10. Repair and Maintenance on estimated basis. It increases in later years when machines becomes old.

11. Sales and Purchases are shown on prevailing market price.

12. Monotorium period 6 months for installation of plant and trail production.

13. Repayment of Term Loan:

Statement of Repayment of Term Loan

Year	Principal	Repayment	Balance	Interest
1	1.500	0.300	1.200	0.200
2	1.200	0.300	0.900	0.160
3	0.900	0.300	0.600	0.120
4	0.600	0.300	0.300	0.080
5	0.300	0.300	0.000	0.040

Interest is calculated on Average balance @ 12% P.A.

BREAK EVEN POINT

Base Year - 1^st, year, at a turnover of 20.000 millions

Particular	Variable Expenses	Fixed Expenses
Raw Material	16.000	--
Wages	0.510	0.050
Electricity	0.325	0.025
Repair and Maintenance	0.040	--
Advertisement	0.080	--
Administration	0.150	0.025
CC Interest	0.480	--
T/L Interest	--	0.720
Depreciation	--	0.595
TOTAL	17.585	1.415

Break Even Point = Fixed Cost X Sales for the year

Sales – Variable Cost Sales at 100% Capacity

= 14.15 X 200

200-175.85 333

= 35.19%

__________________________________________________________________________________________

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.44.30
UK Pound	1	Rs.72.92
Euro	1	Rs.64.69

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.