MIRA INFORM REPORT

Report Date :

25.08.2011

IDENTIFICATION DETAILS

Name :	GARNETT SPECIALTY PAPER LIMITED (w.e.f. 30.09.2008)
Formerly Known as :	GARNETT SPECIALTY PAPER PRIVATE LIMITED
Registered Office :	A/2 20, G.I.D.C., Vapi – 396195, Gujarat
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	14.02.2005
Com. Reg. No.:	04-045488
Capital Investment / Paid-up Capital :	Rs.313.173 Millions
CIN No.: [Company Identification No.]	U21010GJ2005PLC045488
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer of Specialty Papers
No. of Employees :	250 (In Office) (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (27)

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

Maximum Credit Limit :	USD 1260000
Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is an established company having moderate track. There appears some accumulated losses recorded by the company. 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.

INFORMATION PARTED BY

Name :	Mr. Prabhu patel
Designation :	Accounts manager
Contact No.:	91-9879604246
Date :	23.08.2011

LOCATIONS

Registered Office / Factory :	A/2 20, G.I.D.C., Vapi – 396195, Gujarat, India
Tel. No.:	91-260-2400521
Mobile No.:	91-9879604246 (Mr. Prabhu Patel)
Fax No.:	91-260-2431958
E-Mail :	contact@garnettpaper.com sheetalmehta@garnettpaper.com info@garnettpapers.com
Website :	http://www.granettpaper.com
Area :	1500 sq. mtrs
Location :	Leased

DIRECTORS

AS ON 30.09.2010

Name :	Mr. Bireshchandra Manoranjan Benarjee
Designation :	Whole Time Director
Address :	Flat No. 103, Samrajya – 2, Gokul Vihar, Vapi – 396195, Gujarat, India
Date of Birth/Age :	01.01.1946
Date of Appointment :	11.09.2009
Din No.:	01326853
Name :	Mr. Tapas T. Dutta
Designation :	Director
Address :	Flat No. 22, Prabhat Complex-3, Shroff Road, Rajkot – 360001, Gujarat, India
Date of Birth/Age :	22.02.1961
Date of Appointment :	14.02.2005
Din No.:	00005662
Name :	Mr. Mahendra V. Mehta
Designation :	Director
Address :	Pitcullen, Pinner hill, Pinner Hill Road, Pinner, United Kingdom
Date of Birth/Age :	16.02.1946
Date of Appointment :	29.08.2005
Din No.:	00780524

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2010

Names of Shareholders (Equity Shares)	No. of Shares
Tapas Dutta	100
Dharmesh Chedda	779864
Oceanic Investments Limited, Mauritius	19850088
Meera Mehta	9900
Bireshchandra Banerjee	100
Anjankumar Dey	100
Mahendra Mehta	7000000
Jitendra Sonawale	100
Savitaben Chheda	507823
Total	28148075

Names of Shareholders (Preference Shares)	No. of Shares
Rafiq Nathani	26420
Oceanic Investments Limited, Mauritius	370000
Farook L Ahmed	250
Jekishan Lad	1
Pravin Thakker	2
Cellpap Agencies Private Limited, India	250
Shubh Vinayak Trading	50
Ismail Memon	50
Farida Memon	20
Sofiya Memon	15
Farooq Memon	15
Narendra Desai	5
Jalaludin Kamdar	50
Aziz Memon	5
Fakir Isab	25
Craft Corner Paper Mills Private Limited, Gujarat	25
Mahesh Dattani	10
Thulaseedharan Kumaran	10
Daud Dukandar	1
Jashuben Patel	1
Himatlal Makwana	1
Keshavbhai Patel	1

AS ON 30.09.2010

Category	Percentage
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	99.96
Directors or relatives of Directors	0.04
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Specialty Papers
Exports :
Products :	Paper
Countries :	· UK · Spain · France
Imports :
Products :	Waste paper
Countries :	Dubai
Terms :
Selling :	L/C, Cash, Credit
Purchasing :	L/C, Cash, Credit

GENERAL INFORMATION

Customers :

· Wholesalers

· Retailers

· End Users

No. of Employees :

250 (in Office) (Approximately)

Bankers :

· Bank Of Baroda, Vapi-III Phase Branch, Shed No.C/1/2/2122/1, P.B, No.12, GIDC, Vapi – 396195, Gujarat, India

· Axis Bank, GIDV Vapi, Gujarat, India

Facilities :

Secured Loan	Rs. In Millions 31.03.2010	Rs. In Millions 31.03.2009
Working Capital Loan From
Gujarat State Financial Corporation	0.000	5.000
Axis Bank Limited (Term Loan)	50.160	74.156
Axis Bank Limited (Cash, Credit)	50.605	0.000
Bank of Baroda FBD	31.120	0.000
Bank of Baroda EPC	15.201	0.000
Bank of Baroda term Loan	120.000	0.000
Vehicle Loans From
HDFC Bank Limited (Car loan – Verna)	0.545	0.000
ICICI Bank Limited (Car Loan – Logan)	0.175	0.321
(Loans are secured by hypothecation charge on representative car )
Total	267.808	79.478
Note : By way of equitable mortgage on plot No, A -Z/1g, 20, 22, 329 and 330 and adjoining road of plot No. 329 and 330 at GIDC, Vapi.) (Loans are secured by pari pasu charge of both the banks by hypothecation charge on Stock, Book Debts, plant and Machinery and other movable assets of the company both current and future.) (Loans are backed by personal guarantee of one of the Director and third party guarantee.)
Unsecured Loan	Rs. In Millions 31.03.2010	Rs. In Millions 31.03.2009
From Directors and Their Relatives	12.000	3.100
Intercorporate Loan	0.000	0.000
Loan Against SBLC from
Axis Bank Limited	0.000	176.788
HDFC Bank Limited	0.000	164.755
Total	12.000	344.643

Banking Relations :	----
Auditors :
Name :	M.J. Rindani and Associates Chartered Accountant
Address :	204, Trade Centre, Sardar Nagar Main Road, Rajkot – 360001, Gujarat, India
Pan No :	AADFM6993K
Associates Company :	Saurashtra Specialities Private Limited
Holding Company :	Oceanic Investments Limited

CAPITAL STRUCTURE

AS ON 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
28700000	Equity Shares	Rs.10/- each	Rs.287.000 Millions
400000	6% Preference Shares	Rs.100/- each	Rs.40.000 Millions
30000	Zero Coupon Preference Shares	Rs.100/- each	Rs.3.000 Millions
	Total		Rs.330.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
27017351	Equity Shares	Rs.10/- each	Rs.270.173 Millions
400000	6% Preference Shares	Rs.100/- each	Rs.40.000 Millions
30000	3 year Zero Coupon Preference Shares	Rs.100/- each	Rs.3.000 Millions
	Total		Rs.313.173 Millions

After 30.09.2010

Authorised Capital : Rs. 330.000 millions

Issued, Subscribed & Paid-up Capital : Rs. 324.480 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		313.173	147.084	143.921
2] Share Application Money		0.000	0.000	9.928
3] Reserves & Surplus		0.600	0.600	0.600
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		313.773	147.684	154.449
LOAN FUNDS
1] Secured Loans		267.809	79.478	82.365
2] Unsecured Loans		12.000	344.643	356.556
TOTAL BORROWING		279.809	424.121	438.921
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		593.582	571.805	593.370
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		340.994	371.611	373.463
Capital work-in-progress		21.054	0.000	0.000
INVESTMENT		0.369	0.368	0.369
DEFERREX TAX ASSETS		38.064	40.495	43.242
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	136.340	113.319	141.024
	Sundry Debtors	101.836	129.201	132.874
	Cash & Bank Balances	0.320	15.755	11.593
	Other Current Assets	10.231	7.359	7.294
	Loans & Advances	27.200	39.489	44.913
Total Current Assets		275.927	305.123	337.698
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	74.659	156.282	169.117
	Other Current Liabilities	22.224	5.040	11.562
	Provisions	2.645	1.420	0.360
Total Current Liabilities		99.528	162.742	181.039
Net Current Assets		176.399	142.381	156.659
MISCELLANEOUS EXPENSES		16.702	16.950	19.637
TOTAL		593.582	571.805	593.370

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	285.195	298.482	383.058
		Other Income	12.866	30.340	21.295
		TOTAL (A)	298.061	328.822	404.353
Less	EXPENSES
		Cost of Material	111.991	132.729	247.512
		Manufacturing Expenses	75.167	72.136	116.548
		Personnel Expenses	17.101	15.665	14.170
		Other Operating Expenses	14.516	17.483	15.799
		Selling Expenses	14.395	16.534	32.898
		Increase / Decrease in stock	(19.256)	2.924	(45.287)
		Amortization of Preliminary Expenses	0.482	0.301	0.283
		Prior Period items	0.130	0.000	0.000
		TOTAL (B)	214.526	257.768	381.923
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		83.535	71.050	22.430
Less	FINANCIAL EXPENSES (D)		53.294	38.441	42.267
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		30.241	32.609	(19.837)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		22.380	24.112	21.124
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)		7.861	8.497	(40.961)
Less	TAX (I)		3.657	3.876	(14.330)
	PROFIT / (LOSS) AFTER TAX (G-I) (J)		4.204	4.621	(26.631)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(13.883)	(18.504)	8.127
	BALANCE CARRIED TO THE B/S		(9.679)	(13.883)	(18.504)
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	190.737	260.566	287.496
	TOTAL EARNINGS		190.737	260.566	287.496
	IMPORTS
		Raw Materials	61.224	63.171	135.560
	TOTAL IMPORTS		61.224	63.171	135.560
	Earnings Per Share (Rs.)		0.15	0.44	(2.63)

Particulars	31.03.2011
Sales Turnover (Approximately)	428.500

The above information has been parted by Mr. Prabhu Patel.

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	1.41	1.40	(6.58)
Net Profit Margin (PBT/Sales)	(%)	2.75	2.84	(10.69)
Return on Total Assets (PBT/Total Assets}	(%)	1.27	1.25	(5.75)
Return on Investment (ROI) (PBT/Networth)		0.02	0.05	(0.26)
Debt Equity Ratio (Total Liability/Networth)		1.20	3.97	4.01
Current Ratio (Current Asset/Current Liability)		2.77	1.87	1.86

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS :

(Rs. In millions)

Particulars	31.03.2010	31.03.2009	31.03.2008
Creditors for Goods	23.097	121.664	121.745
Creditors for Expenses	11.334	5.398	12.089
Creditors for Capital Goods	40.228	29.220	35.283
Total	74.659	156.282	169.117

NOTE :

The registered office address of the company has been shifted from 302, Tirth 6/11, Jagnath Plot, Rajkot, Gujarat,

India to Present address w.e.f. 30.09.2008.

TRADE REFERENCES :

· Shiv Mangal Industries – Mumbai

· Garnett Paper – UK

OPERATIONS AND PERFORMANCE :

The company has achieved production 3092.43 MT of M.G. Poster Paper as compared to production of 2232.73 MT of M.G. Poster Paper, during the previous year. The Company has achieved sale of 2607.5 MT. valuing 298.482 millions as compared to 3155.36 MT. valuing 285.196 millions in the previous year. During the year, performance of the Company has remain stable, during the year it has try to establish in the domestic market also so that it can sustain better to counter weak global market. The directors are hope full of achieving better result in the years to come.

FORM : 8

Corporate identity number of the company	U21010GJ2005PLC045488
Name of the company	GARNETT SPECIALTY PAPER LIMITED
Address of the registered office or of the principal place of business in India of the company	A/2 20, G.I.D.C., Vapi - 396195, Gujarat, India
This form is for	Modification of charge
Type of charge	Immovable property Book debts Movable property (not being pledge) Floating charge
Particular of charge holder	Bank Of Baroda, Vapi-III Phase Branch, Shed No.C/1/2/2122/1, P.B, No.12, GIDC, Vapi – 396195, Gujarat, India
Nature of instrument creating charge	Joint Deed Of Hypothecation
Date of instrument Creating the charge	06/01/2010
Amount secured by the charge	Rs. 310.000 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest BOB:Packing credit cum fbp/fbd : 2.75% below BPLR i.e. 9.25% payable wmr/as per extent guidelines (LC charges as per norms) Term Loan : 2.25% over BPLR i.e. 14.25% p.a. w.m.r. Terms of repayment Bank of Baroda Term Loan- 60 Equal Monthly installments of Rs. 20 lacks, commencing 12 months from the date of disbursement of loan. Working Capital: On demand- subject to yearly review. Margin Bank of Baroda: Packing Credit Cum FBP/FBD (BOB) 25% for PC, FBP/FBD- Nil (15% in FDRs for LC). Term Loan : 41% Extent and operation of the charge The charge operates as a security on First charge on Pari Passu basis without any preference or priority over each other over the assets mentioned at Sr. No.15. to secure the total finance of Rs. 210.000 millions of Bank of Baroda and Rs. 100.000 millions of Axis Bank both aggregating Rs. 310.000 millions. Other Nil
Short particulars of the property charged (Including location of the property)	As per attached third and fourth schedule of the Joint Deed of Hypothecation.
Date of instrument modifying the charge	03.10.2009
Particulars of the present modification	Movable and Immovable Properties of the Company were charged in favor of AXIS BANK LTD. as a security for its finances facilities of Rs. 100.000 millions are now charged as a security under consortium finance of Rs. 310.000 millions under lead bank Bank of Baroda on First charge on Pari Passu basis without any preference or priority over each other over the assets to secure the total finance of Rs. 210.000 millions of Bank of Baroda and Rs. 100.000 millions of Axis Bank both aggregating Rs. 310.000 millions.

FIXED ASSETS :

· Leasehold Land

· Factory Buildings

· Plant and Machinery

· Effulent Treatement Plant

· Office Equipments

· Furniture and Fittings

· Vehicles

· Computer Systems

· Goodwill

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. 45.76
UK Pound	1	Rs. 75.57
Euro	1	Rs. 65.97

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	2
--CREDIT LINES	1~10	2
--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		27

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.