MIRA INFORM REPORT

Report Date :

08.01.2011

IDENTIFICATION DETAILS

Name :	KAYGAON PAPER MILLS LIMITED
Registered Office :	C-8, Saroj Apartment, Opp. Holy Spirit Hospital, M C Road, Andheri (East), Mumbai – 400 093, Maharashtra
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	10.04.1989
Com. Reg. No.:	11-51317
CIN No.: [Company Identification No.]	U21010MH1989PLC051317
TAN No.: [Tax Deduction & Collection Account No.]	MUMK11401F
PAN No.: [Permanent Account No.]	AAACK3249A
Legal Form :	A closely held public limited liability company.
Line of Business :	Manufacturer of Craft Paper

RATING & COMMENTS

MIRA’s Rating :

Ba (45)

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

Maximum Credit Limit :	USD 210000
Status :	Satisfactory
Payment Behaviour :	Slow but Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. The company was declared as a sick unit by the BIFR. However in 2008 it is removed form the preview of BIFR. Trade relations are reported as fair. Business is active. Payments are reported to be slow but 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	A1	A1

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

INFORMATION DECLINED BY

MANAGEMENT NON CO-OPERATIVE

LOCATIONS

Registered Office :	C-8, Saroj Apartment, Opp. Holy Spirit Hospital, M C Road, Andheri (East), Mumbai – 400 093, Maharashtra, India
Tel. No.:	91-22-28321370 / 28518651/ 40568100
Fax No.:	91-22-28321377 / 28518645/ 40568154
E-Mail :	kpml_amb@rediffmail.com accounts@kaygaonpm.com agrawal@kanoicap.com
Area :	1700 Sq. ft.
Location :	Rented
Head Office :	Behind Axis Bank, Adalal Road, Manisha Building, Near Bajaj Hospital, Aurangabad – 431 003, Maharashtra, India
Tel. No.:	91-240-2334696/ 2334731
Fax No.:	91-240-2321855
E mail:	info@kaygaonpm.com
Factory :	Gala No. 184, Village Kaygaon, Taluka Gangapur, District Aurangabad, Maharashtra, India
Tel. No.:	91-2433-224530/ 224529

DIRECTORS

(As on 25.08.2010)

Name :	Mr. Omprakash D Rathi
Designation :	Managing Director
Address :	Plot No. 153, N-3, CIDCO, Jalna Road, Aurangabad – 431 003, Maharashtra, India
Date of Birth/Age :	11.05.1952
Qualification :	M.Com
Date of Appointment :	10.04.1989
Name :	Mr. Akshay O Rathi
Designation :	Director
Address :	Plot No. 153, N-3, CIDCO, Jalna Road, Aurangabad – 431 003, Maharashtra, India
Date of Birth/Age :	04.04.1978
Qualification :	Engineer, MBA
Date of Appointment :	31.01.2004
Name :	Mr. Hemant Y Kunte
Designation :	Director
Address :	Plot No. 153, N-3, CIDCO, Jalna Road, Aurangabad – 431 003, Maharashtra, India
Date of Birth/Age :	19.12.1958
Qualification :	Diploma in Engineering
Date of Appointment :	22.10.2003

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 25.08.2010)

Names of Shareholders	No. of Shares
Akshay O Rathi	665500
Anuradha Shivprasad Baldeva	500
Anita Raendra Baldeva	500
Anusaya Shashikant Choudhari	500
Anil Murlidhar Soni	1000
Anit Dilip Agarwal	2500
Archana S Agarwal	8000
Abha Kailashchandra Baldeva	1500
Bhaurao Deorao Phata	1500
Baban Deorao Phata	1000
Chandrakala Poptlal Choradia	2500
Chanda Chandrkant Sarda	1000
Chandrakant Hanumandas Malpani	1000
Dwarkanath Dhanraj Loya	500
Dilip Soni	2000
Dyanprakash Modanio	1500
Dilip Agarwal	2500
Indumati Harnarayan Soni	1500
Jitendra Rasiklal Shah	2500
Kalyani Omprakash Rathi	31500
Kesharbai P Agarwal	5000
Kamla Shivkumar Agarwal	3000
Kondabai Shriram Baldawa	500
Kiran Prafulchandra Malani	1000
Kajol Agarwal	8000
Mangala Omprakash Rathi	416500
Madhukanta Jalnawala	1250
Manoj Vinod Zawar	5000
Madhavi Suresh Vaishnav	500
Mahesh Kapoorchand Mehta	500
N Narendran	2500
Naresh G Sikchi	1000
Neela Ranakar Kumbhakarna	500
Omprakash Damodar Rathi	274500
Omprakash Rathi – Jointly with Mangala Rathi	145500
Dr. Purshottam Dark Jointly with Aruna Darak	2500
Pushpa Vinod Zawar	7500
Priti Vinod Zawar	5000
Prashant Vinod Zawar	5000

Equity share breakup (percentage of total equity)

(As on 30.09.2010)

Category	Percentage
Bodies Corporate	2.50
Directors or relatives of directors	89.55
Other top fifty (50) shareholders	7.95
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Craft Paper
Imports :
Products :	· Raw Material · Machinery
Countries :	· Europe · Middle East · China
Terms :
Selling :	Cash and Credit (30 days / 60 days / 90 days)
Purchasing :	Cash

GENERAL INFORMATION

Customers :

· Dealer

· Distributor

No. of Employees :

Approximately 200

Bankers :

· Union Bank of India, 323-A, Bhagwati Bhavan, Matunga (East), Mumbai – 400 019, Maharashtra, India

· Bank of India, Aurangabad Branch, Rajmata Building, Kranti Chowk, Aurangabad, Maharashtra, India

Facilities:

Secured Loans	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
Working Capital Facility from Bank	44.987	34.765
Term Loan	29.274	0.000
Car Loan	0.786	1.147
Hire Purchase Loan	1.229	0.000
Total	76.276	35.912
Note: · Working Capital Loan form Union Bank of India is secured by way of hypothecation of stocks and book debts (not older than 90 days) and security of Land and Building along with hypothecation of plant and machinery (NBV) of the company and Residential Bunglow at N-3, Plot No. 153, CIDCO. New Aurangabad owned by Mr. Om Prakash Rathi, Director. · Term Loans taken from Union Bank of India is secured by way of hypothecation of all the present and future plant and machinery of the company. This loan is further secured by the personal guarantees of directors of the company. · Hire purchase loans taken from Sundaram Finance Limited are secured by way of hypothecation of the commercial vehicles purchase by the company. · Vehicles loan from HDFC Bank is secured by hypothecation of the vehicle taken on hire purchase by one of the directors. However such vehicle is being uses and maintained by the company including the repayment of the said loan. As per understanding with Directors and the company , the vehicle is being considered as an assets of the company and the same is shown in the books of the company at the value of actual purchase. All the registration and insurance documents are however in the name of the director.
Unsecured Loans	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
Loan against Sales tax deferral scheme	56.505	59.703
From Directors	8.466	0.949
From Directors Relatives	2.595	2.277
From Intercorporate	7.260	6.139
From Others	1.849	1.839
Total	76.675	70.907

Banking Relations :	-
Auditors :
Name :	Walter and Associates Chartered Accountant
Address :	B-6/7, Saroj Apartments, Opp. Holy Spirit Hospital, Mahakali Caves Road, Mumbai – 400 093, Maharashtra, India
Tel. No.:	91-22-40568100 (B)
Fax No.:	91-22-40568154
E-Mail :	wna@wnaca.com
Website :	http://www.wnaca.com
Holding Company :	Samarkand Investment and Trd. Private Limited

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
3500000	Equity Shares	Rs.10/- each	Rs.35.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2000000	Equity Shares	Rs.10/- each	Rs.20.000 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		20.000	20.000	20.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		34.539	25.007	18.080
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		54.539	45.007	38.080
LOAN FUNDS
1] Secured Loans		76.276	35.912	0.000
2] Unsecured Loans		76.675	70.907	77.528
TOTAL BORROWING		152.951	106.819	77.528
DEFERRED TAX LIABILITIES		22.449	20.142	17.771
TOTAL		229.939	171.968	133.379
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		147.677	116.849	106.530
Capital work-in-progress		18.843	3.711	0.000
INVESTMENT		0.845	0.847	0.847
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	56.532	16.765	29.805
	Sundry Debtors	43.082	41.596	27.522
	Cash & Bank Balances	2.856	3.645	4.004
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	20.765	32.384	26.479
Total Current Assets		123.235	94.390	87.810
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	54.606	38.021	58.708
	Other Current Liabilities	6.055	5.808	3.100
	Provisions	0.000	0.000	0.000
Total Current Liabilities		60.661	43.829	61.808
Net Current Assets		62.574	50.561	26.002
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		229.939	171.968	133.379

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income from Operations	476.389	401.215	332.176
		Other Income	0.008	0.134	0.010
		TOTAL (A)	476.397	401.349	332.186
Less	EXPENSES
		Cost of Material Traded	6.769	4.440	2.647
		Raw Material Consumed	299.299	264.168	222.043
		Manufacturing Expenses	118.631	90.920	67.125
		Administrative Expenses	10.779	10.564	9.720
		Selling and Distribution Expenses	11.851	10.507	10.101
		Increase/ Decrease in Stock	[0.687]	[1.137]	0.389
		TOTAL (B)	446.642	379.462	312.025
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		29.755	21.887	20.161
Less	FINANCIAL EXPENSES (D)		6.100	2.431	1.444
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		23.655	19.456	18.717
Less/ Add	DEPRECIATION/ AMORTISATION (F)		9.864	9.097	7.708
	PROFIT BEFORE TAX (E-F) (G)		13.791	10.359	11.009
Less	TAX (I)		4.259	3.432	3.543
	PROFIT AFTER TAX (G-I) (J)		9.532	6.927	7.466
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		15.709	8.782	1.316
	BALANCE CARRIED TO THE B/S		25.241	15.709	8.782
	Earnings Per Share (Rs.)		4.77	--	--

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	2.00	1.73	2.01
Net Profit Margin (PBT/Sales)	(%)	2.89	2.58	2.97
Return on Total Assets (PBT/Total Assets}	(%)	5.09	4.90	5.66
Return on Investment (ROI) (PBT/Networth)		0.25	0.23	0.29
Debt Equity Ratio (Total Liability/Networth)		3.92	3.35	3.66
Current Ratio (Current Asset/Current Liability)		2.03	2.15	1.42

LOCAL AGENCY FURTHER INFORMATION

DETAILS OF SUNDRY CREDITORS

(Rs. In Millions)

Particulars	31.03.2010	31.03.2009	31.03.2008
SUNDRY CREDITORS
Creditors for Capital Goods	2.823	1.099	12.041
Creditors for Goods	30.382	16.799	28.123
Creditors for Expenses	21.401	20.123	18.544
Total	54.606	38.021	58.708

Trade References

· Shripur Paper Mills Limited, Hyderabad – Office and Andhra Pradesh – Factory

· Seascope Impex Private Limited – Mr. Amit Birla (Supplier), Andheri

Operations:

The company has achieved a production of 28266 MTs, which is an increase of 19% compared to 23721 MTs iin the previous year.

Due to increase in the production and good market condition during the year, the turnover of the company has reached to Rs. 476.389 Millions form Rs. 401.215 Millions in the previous year. Resultantly the profit before tax has increased to Rs. 13.791 Millions compared to Rs. 10.359 Millions in the previous year.

Contingent Liability:

· On account of Bank Guarantee given to MSEDCL and WCL Rs. 3.988 Millions (Rs. 3.600 Millions) Margin Money Rs. 1.978 Millions (Rs. 1.325 Millions.)

· Estimated amount of contracts remaining to be executed on Capital accounts and not provided for as on 31^st March, 2010 is Rs. 1.181 Millions (not of advance given). The said amount is however based on estimated.

Bankers Charges Report as per Registry

Corporate identity number of the company	U21010MH1989PLC051317
Name of the company	KAYGAON PAPER MILLS LIMITED
Address of the registered office or of the principal place of business in India of the company	C-8, Saroj Apartment, Opp. Holy Spirit Hospital, M C Road, Andheri (East), Mumbai – 400 093, Maharashtra, India
This form is for	Modification of Charge
Charge identification number of the charge to be modified	10140479
Type of charge	Immovable Property
Particular of charge holder	Union Bank of India, 323-A, Bhagwati Bhavan, Matunga (East), Mumbai – 400 019, Maharashtra, India
Nature of instrument creating charge	Deed of Mortgage dated 29.10.2009
Date of instrument Creating the charge	29.10.2009
Amount secured by the charge	Rs. 95.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest Hypothecation (Stocks and book debts) – Rs. 55.000 Millions -- BPLR + 0.75%, Term Loan – Rs. 35.000 Millions – NPLR + 1.000% Bank Guarantee – Rs. 5.000 Millions – As Applicable Terms of Repayment 2010-11- Rs. 4.000 Millions (Equal Monthly Installments) 2011-12- Rs. 5.000 Millions (Equal Monthly Installments) 2012-13- Rs. 7.000 Millions (Equal Monthly Installments.) 2013-14- Rs. 9.000 Millions (Equal Monthly Installments) 2014-15- Rs. 10.000 Millions (Equal Monthly Installments) Margin Stock/ Book Debts = 25% / 40% Bank Guarantee = 25% Term Loan = 25% LC= 10% + 15% Extent and Operation of the charge To the extent of respective sanctioned limits
Short particulars of the property charged	All the part and parcel of the land and building admeasuring 9 Acres at Gut No. 184 Village- Kaygaon, TQ. Gangapur, District Aurangabad
Date of instrument modifying the charge	23.12.2008
Particulars of the present modification	The original charge was created on 23.12.2008 for Rs. 50.000 Millions and now by this modification The Limits increased from Rs. 50.000 Millions to Rs. 95.000 Millions

Name of the company	KAYGAON PAPER MILLS LIMITED
Presented By	Kaygaon Paper Mills Limited
1) Date and description of instrument creating the change	People agreement of hypothecation of book debts dated 04.07.1991 expressed by the company
2) Amount secured by the charge/amount owing on the securities of charge	Rs.2.000 millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	· Hypothecation of book debts · Hypothecation of all tangible moveable property including all stock of stores and spares of all kinds loose or packed Lying at factory and / or in godown and / or in transit and wheresoever situated.
4) Gist of the terms and conditions and extent and operation of the charge.	Hypothecation of book debts to secure a demand cash credit of Rs.2.000 millions together with interest at 6.25% over bank rate minimum 18.25% p.a. with quarterly rests or at such other rates as may be notified to the company by bank from time to time with power to the bank to seize or realize.
5) Name and Address and description of the person entitled to the charge.	Bank of India Aurangabad Branch, Rajmata Building, Kranti Chowk, Aurangabad, Maharashtra, India
6) Date and brief description of instrument modifying the charge	Supplementary agreement stamped dated 21.03.1994 for additional limit of Rs.1.500 millions against book debts.

Corporate identity number of the company	U21010MH1989PLC051317
Name of the company	KAYGAON PAPER MILLS LIMITED
Address of the registered office or of the principal place of business in India of the company	C-8, Saroj Apartment, Opp. Holy Spirit Hospital, M C Road, Andheri (East), Mumbai – 400 093, Maharashtra, India
This form is for	Creation of charge
Type of charge	· Book debts · Movable property (not being pledge)
Particular of charge holder	Union Bank of India, 323-A, Bhagwati Bhavan, Matunga (East), Mumbai – 400 019, Maharashtra, India
Nature of instrument creating charge	· Demand Promissory Note · Letter of Continuity · Composite Hypothecation Deed
Date of instrument Creating the charge	05.01.2009
Amount secured by the charge	Rs.50.000 millions
Brief of the principal terms an conditions and extent and operation of the charge	· Rate of interest Hypothecation (Stocks / Book Debts) – 50.000 millions - BPLR+0.25% · Terms of repayment Working Capital Limits for a period of 12 months subject to further renewal · Margin Stocks – 25% Book Debts – 40% L/C – 10%+15% · Extent and operation of the charge To the extent of Rs.50.000 millions and as per sanction terms
Particulars of the property charged	Stock and Book Debts alongwith movable Plant and Machinery

Fixed Assets

· Freehold Land

· Factory Building

· Building

· Plant and Machinery

· Electric Installation

· Furniture and Fixture

· Vehicles

· Computer

· Lab Equipments

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.45.37
UK Pound	1	Rs.70.04
Euro	1	Rs.58.93

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		45

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.