MIRA INFORM REPORT

Report Date :

15.01.2011

IDENTIFICATION DETAILS

Name :	VARDMAN HARDWARE INDUSTRIES
Registered Office :	Kairane Shamli Road, Industrial Estate, Kairane, Uttar Pradesh
Country :	India
Year of Establishment :	2010
PAN No.: [Permanent Account No.]	AFFPJ6172A
Legal Form :	Sole Proprietory Concern
Line of Business :	Manufacturing of Hinges and Handles.

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Status :	New Concern
Payment Behaviour :	Unknown
Litigation :	Clear
Comments :	Subject is a new proprietory concern and yet to establish satisfactory track. The networth statement and the valuation report appears to be satisfactory. Trade relations are reported as fair. Business is active. Payment terms are unknown. It would be advisable to take adequate securities while dealing with the 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. Vipul Jain
Designation :	Manager
Contact No.:	91-9412582496/ 9368126070
Date :	13.01.2011

LOCATIONS

Registered Office/ Factory :	Kairane Shamli Road, Industrial Estate, Kairane, Uttar Pradesh, India
Mobile No.:	91-9368126070
Location :	Rented

SOLE PROPRIETOR

Name :	Mrs. Rashmi Jain
Designation :	Proprietor
Address :	101, Mohhala Sarvagyan, Kairana – 247775, India
Date of Birth/Age :	06.07.1981
Qualification :	Intermediate
Experience :	3 years (Trading Experience)

KEY EXECUTIVES

Name :	Mr. Vipul Jain
Designation :	Manager

BUSINESS DETAILS

Line of Business :

Manufacturing of Hinges and Handles.

Products :

Products Description	Item Code No.
Hinges	71543
Tower Bolt	51542
Aldrops	71536
Handle	74541

Terms :

Selling :

Cash and Credit (60 days)

Purchasing :

Cash

GENERAL INFORMATION

No. of Employees :	18 (Office – 4 and Factory – 14)
Bankers :	Corporation Bank

Banking Relations :	--
Auditors :
Name :	Ajay Vishnu Gupta and Company Chartered Accountant
Associates/Subsidiaries :	· Vardhman Plywood and Hardware Store Address: Chowk Bazar, Kairana, India Line of Business: Hardware Shop

CAPITAL STRUCTURE

Capital Investment :
Owned :	Not Available
Borrowed :	Not Available
Total :	Not Available

FINANCIAL DATA

[all figures are in Rupees Millions]

NEW CONCERN

LOCAL AGENCY FURTHER INFORMATION

PROJECTED BALANCE SHEET FOR 5 YEARS

(RS. IN MILLIONS)

LIABILITIES	1^st Year	2^nd Year	3^rd Year	4^th Year	5^th Year
Capital Account
Mrs. Rashmi Jain	0.125	0.304	0.569	0.921	1.326
Add: Net Profit	0.251	0.355	0.472	0.565	0.645
	0.376	0.659	1.041	1.486	1.971
Less: Drawings	0.072	0.090	0.921	1.326	0.200
Total	0.304	0.569	0.921	1.326	1.771
Secured Loans
Loan From Bank	0.950	0.950	0.950	0.950	0.950
Loan from Bank (T/L)	1.200	0.900	0.600	0.300	0.000
Current Liabilities
Sundry Creditors	0.108	0.120	0.135	0.150	0.170
TOTAL	2.562	2.539	2.606	2.726	2.891
ASSETS
Fixed Assets
Plant and Machinery	1.275	1.084	0.921	0.783	0.666
Current Assets
Stock in Trade	1.100	1.220	1.400	1.600	1.800
Sundry Debtors	0.160	0.175	0.195	0.230	0.280
Cash and Back Balance	0.027	0.060	0.090	0.113	0.145
TOTAL	2.562	2.539	2.606	2.726	2.891

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PROJECTED PROFITABILITY STATEMENT FOR 5 YEARS

(RS. IN MILLIONS)

LIABILITIES	1^st Year	2^nd Year	3^rd Year	4^th Year	5^th Year
Sales	9.750	10.500	11.250	12.000	12.750
Gross Receipt	9.752	10.500	11.250	12.000	12.750
Expenses
Raw Material	8.288	8.925	9.563	10.200	10.838
Labour Charges	0.390	0.420	0.420	0.480	0.510
Salary	0.060	0.072	0.084	0.096	0.120
Power and Electricity	0.144	0.151	0.159	0.167	0.175
Administrative and Other Expenses	0.098	0.105	0.113	0.120	0.128
Interests to Bank	0.285	0.258	0.222	0.186	0.150
Depreciation	0.225	0.191	0.163	0.138	0.117
Total Expenses	9.489	10.122	10.753	11.387	12.038
Net Surplus	0.261	0.378	0.497	0.613	0.713
Tax	0.010	0.023	0.025	0.048	0.068
Surplus After Tax	0.251	0.355	0.472	0.565	0.645
Net Cash Accruals	0.476	0.546	0.635	0.703	0.762
Interests to Bank	0.285	0.258	0.222	0.186	0.150
Total Sources (A)	0.761	0.804	0.857	0.889	0.912
Repayment of Term Loans (B)	0.225	0.300	0.300	0.300	0.300
Interests on Bank	0.285	0.258	0.222	0.186	0.150
Total Uses	0.510	0.558	0.522	0.486	0.450
Debts Service Coverage Ratio (A/B)	2.12	1.82	2.12	2.34	2.54
Average DSCR			2.19

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PROJECTED FUND FLOW STATEMENT FOR 5 YEARS

(RS. IN MILLIONS)

LIABILITIES	1^st Year	2^nd Year	3^rd Year	4^th Year	5^th Year
AVAILABILITY OF FUND
Capital Fund	0.125	Nil	Nil	Nil	Nil
Loan from Bank	1.425	Nil	Nil	Nil	Nil
C/C from Bank	0.950	Nil	Nil	Nil	Nil
Increase in Sundry Creditors	0.108	0.012	0.015	0.015	0.020
Net Cash Accruals (A)	0.476	0.546	0.635	0.703	0.762
Total	3.084	0.558	0.650	0.718	0.782
USES OF FUND
Investment in Fixed Assets	1.500	0.000	0.000	0.000	0.000
Repayment of Term Loan	0.225	0.300	0.300	0.300	0.300
Proprietor Drawings	0.072	0.090	0.120	0.160	0.200
Increase in Stock	1.100	0.120	0.180	0.200	0.200
Increase in Sundry Debtors	0.160	0.015	0.020	0.035	0.050
Increase in Cash and Bank Balances	0.027	0.033	0.030	0.023	0.032
Total	3.084	0.558	0.650	0.718	0.782

PROJECTED CASH FLOW STATEMENT FOR 5 YEARS

(RS. IN MILLIONS)

Opening Balance	0.000	0.027	0.060	0.090	0.113
Increase in Cash and Bank	0.027	0.033	0.030	0.023	0.032
Closing Balance	0.027	0.060	0.090	0.113	0.145

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PROJECT REPORT

FINANCE OF FINANCING

Particulars	Rs In Millions
Proprietor’s Capital	0.125
Cash Credit from Bank	0.950
Term Loan from Bank	1.425

INTRODUCTION

M/s Vardhman Hardware Industries (hereafter called the unit) is a proprietorship concern, which is decided to set up a unit for manufacturing of “Iron Hinges and Handles” at Kairana Road, Village Kandela, Tehsil – Kairana, district Muzaffarnagar. “Hinges and Handles” are mainly used for the installation of Doors and Windows etc. Differed size of hinges and handles will be made in the unit.

Mrs. Rashmi Jain w/o Mr. Vipul Kumar Jain R/o Mohhala Sarvagyan, Kairana, Muzaffarnagar is the sole proprietor of the firm. Proprietor is a woman of age 32 years and having good knowledge of this line.

RAW MATERIALS

The prime raw materials for the produced is iron Patti. Paints and Some chemicals are also required for manufacturing the final products which are easily available in the local marker.

LABOUR

The requisite skilled and semi-skilled labour are easily available from local market.

MARKETING

There are a heavy demand of the ‘Hinges and handles” in all over the country, because hinges and handles are used in the installing of every types of doors and windows. B’cos government is motivate the real estate sector by providing the different type of facility i.e. construction of houses and flates etc has been increased rapidly, so demand of the hinges and Handles increased equally.

LOCATION:

The unit is to be located at Kairana Road, Village – Kandela, Tehsil- Kairana, Muzaffarnagar, the location is well connected with roads and other infrastructural facilities.

LAND AND BUILDING:

Unit already taken land and Building on rent @ 2000/- per month at Kairana Road, Vill – Kandela, Tehsil – Kairana, Muzaffarnagar.

PLANT AND MACHINERY

The cost of plant and machinery will be app. 1.500 millions come as follows. (Rs. In Millions)

Rula Machine	1 Nos.	0.550
Power Press (10 tones)	1 Nos.	0.090
Power Press (20 tones)	1 Nos.	0.150
Power Press (30 tones)	1 Nos.	0.180
Power Press (50 tones)	1 Nos.	0.180
Ripting Machine (Wire Cutting Machine)	1 Nos.	0.071
Surface Gnnder	1 Nos.	0.125
Counter Machine	4 Nos.	0.034
Daies and Other Tools and Equipment	LS	0.040
Motor Starter and Electric Instigation etc.	LS	0.080
	Total	1.500

POWER AND ELECTRICITY

The unit will be run by taking a power connection of 40 HP, which will be apply by the unit to UPPCL.

COST OF THE PROJECT

The cost of the Project has been arrived at Rs.2.500 Millions as detailed below.

Fixed Assets
Land and Building	On Rent
Plant and Machinery	Rs.1.500 Millions
Working Capital Requirement	Rs.1.000 Million
Total	Rs.2.500 Millions

WORKING CAPITAL REQUIREMENT

Particulars	Period	Amount (Rs. In Millions)
Raw Materials	1 Month	0.590
Finished Goods	8 days	0.258
Sundry Debtors	5 days	0.160
Total Working Capital Requirement		Rs.1.108 Millions
Sundry Creditors	4 days	0.108
Net working capital requirement		1.000

BASIS OF CONST OF PRODUCTION AND PROFITABILITY OF NEW PRODUCTS

SALES

The firm shall manufacturer and sell the following on the basis of 300 working days per annum.

Daily production of Hinges, Handles etc.	1000 kg (1.00 tones)
Annual Production of the Products	300000 kg (300 tones)
Average Selling Price	50/- per kg
Annual Sales Receipts	15.000

CAPACITY UTILISATION		(RS. IN MILLIONS)
1^st year	65%	9.750
2^nd year	70%	10.500
3^rd year	75%	11.250
4^th year	80%	12.000
5^th year	85%	12.750

RAW MATERIALS

The prime raw materials for the product is Iron Patti. Paints and some chemicals are also required on an average basis the cost raw materials will be app. 85% of the sales of respective years.

Hence, Annual Cost of Raw Materials will be as follows:

CAPACITY UTILISATION		(RS. IN MILLIONS)
1^st year	65%	8.288
2^nd year	70%	8.925
3^rd year	75%	9.563
4^th year	80%	10.200
5^th year	85%	10.838

LABOUR

App. Cost of Labour will be 4% of the sales of respective years.

Hence, Annual Cost of Labour will be as follows:

CAPACITY UTILISATION		(RS. IN MILLIONS)
1^st year	65%	0.390
2^nd year	70%	0.420
3^rd year	75%	0.450
4^th year	80%	0.480
5^th year	85%	0.510

POWER AND ELECTRICITY

App. Cost of Power and electricity will be rs.144000/- p.a. there will be a increase of 5% in every year is anticipated.

ADMINISTRATIVE AND OTHER EXPENSES

App. Cost of Packing and Other Manufacturing expenses will be 1% of the Sales of respective year.

Hence, Annual cost of packing and Other Manufacturing expenses will be as follows:

CAPACITY UTILISATION		(RS. IN MILLIONS)
1^st year	65%	0.098
2^nd year	70%	0.105
3^rd year	75%	0.113
4^th year	80%	0.120
5^th year	85%	0.128

DEPRECIATION

It will be changed on WDV basis on Plant and Machinery @ 15% p.a.

RATE OF INTERESTS

The Rate of Interests will be @ 12.00% p.a.

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STATEMENT OF ASSESSABLE INCOME

(RS. IN MILLIONS)

PARTICULARS	2009-10
BUSINESS INCOME
Net Estimated Income from
Knitting and stitching and handy crafts after defraying all expenses (109000-14000)	0.095
OTHER SOURCES
Banking Interests (Approx.) and Other Interests	0.003
Miscellaneous receipt/ Gift received during the year offered towards income for want of concrete evidence u/s 68	0.035
NET TAXABLE INCOME	0.133
TOTAL DUE	NIL

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NETWORTH STATEMENT OF MRS. RASHMI JAIN W/O MR. VIPUL JAIN

(RS. IN MILLIONS)

LIABILITY	31.12.2010	ASSETS	31.12.2010
Capital Account	2.058	Shop at Clowk Bazar Kairana (1/2 Shares (Market Value)	1.560
		Furniture and Fixture	0.100
		Jewellery	0.250
		Cash and Bank Balance	0.148
Total	2.058	Total	2.058

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PROPERTY VALUATION REPORT

GENERAL INFORMATION

Name of the Party/ Purchase and Address (with doors no. and Survey No.)	Vipul kumar Jain s/o Mr. Devendra Kumar Jain
Name of the reported owner / Name of persons in whose name the property registered and address	Mr. Vipul Kumar Jain S/O Mr. Devedar Kumar Jain and Mrs. Rashmi Jain w/o Mr. Vipul Kumar Jain at Shop No.189, ward No.13, Begampura, Chowk Bajar, Kairana, Muzaffarnagar
Purchase of Valuation	To assess the present fair market value of the property for bank purpose.
List of documents produced for perusal	Photo copy of title deed S. No.4964, dated 23.10.2001
Date of Inspection	04.09.2010
Date of Valuation	06.09.2010
Approximate distance from the branch to the property	Approximately twenty kilometers.
Situation/ location/ brief description of the land/ site and brief description of the building	Commercial
Boundaries of the Property	East: 40’-3” – Shop of Mr. Satya Prakash West: 40’-3” – Common Staircase and shop of Mr. Khursheed North: 13’-0” – Sarai Wali Masjid South: 13’-0” – Road 30 ft. wide
Property Tax details	--
Assuming the entire property is let out, the probable monthly rent and advance building rent.	Approximately Rs.4,000.00 P.M.
General Remarks	Property is in commercial area.
VALUATION DETAILS: LAND
The total area (extent) of the site/ land	48.63 sq. mt.
Description of the site/ land
Character of locality	A class
Classification	It’s a commercial building
Development of surrounding areas	Developed
Feasibility to the civic amenities like school, hospital, officers, Market etc.	Approximately One Kilometer
Shape of the land	Rectangular
Type of use to which it can be put	Commercial building
Nature of Right, whether leas hold Freehold	Freehold
General Remarks	The property is situated commercial area
Prevailing Unit Market Rate	Rs.60,000.00 to Rs.70,000.00 per sq. Mt.
Prescribed rate by the Local Authority	Rs.45,000.00 per sq. M t.
Unit rate adopted in this valuation	Rs.60,000.00 per sq. M t.
Valuation of the Site/ Land	48.63 sq. Mt. @ Rs.60,000.00 per sq. mt. = Rs.29,17,800.00
BUILDING
Type of construction	B/W in Cement Sand Mortar
Quality of construction	B Class
Appearance of the Building	Good
Numbers of Floors	Two
Maintenance of the Building	Good
Description of the Building
Foundation	Brick work in mud mortar
Superstructure	Brick work in mud mortar
Roof	R. B. C. and Wooden Kari
Doors	Rolling Shutter and wooden Choukhats with wooden shutters
Windows/ Ventilator	Wooden choukhats with wooden shutters
Sanitary Fittings	Yes
Flooring	C. C. Flooring
Electrify supply	Yes
Total Plinth Area	G F (RBC) = 341.25 sq. ft. GF (Kari) = 91.00 sq. ft. FF = 432.25 sq. ft.
Year of Construction	1980
Total Life of the Building estimated	50 years
Replacement rate of Construction with the existing conditions and specifications	G F (RBC) @ 400.00 per sq. ft. GF (Kari) @ 300.00 per sq. ft. FF @ 400.00 per sq. ft.
Replacement Value	G.F. (R. B.C.) = 341.25 Sq. Ft. 400.00 per Sq. Ft. Rs.1,36.500.00 G.F. (Kari) = 91.00 Sq. Ft. @ 300,00 per Sq. ft, Rs.27,300.00 F.F. = 432.25 Sq. Ft. @ 400.00 per Sq. Ft. Rs.1,72,900.00 Total Rs.1,36,500.00 + Rs.27,300.00 + Rs.1,72,900.00 = Rs.3,36,700.00
Depreciation Value at the rate of %	Depreciation at built up area @ 40% = Rs.1,34,680.00
Present Value of the Building	Rs.0.337 Million – Rs.0.135 Million = Rs.0.202 Million
TOTAL VALUATION
Valuation of the Land	Rs.2.918 Millions
Valuation of the Building	Rs.0.202 Million
Total	Rs.3.1.20 Millions

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TRADE REFERENCE:

· Jain Engineering Company

Hanuman Road, Shamli – 247776, Uttar Pradesh, India

Mobile No.: 91-9837060013

· Mr. Yogesh Kumar Jain

Talab Road, Shamli, Uttar Pradesh, India

Mobile No.: 91-9412637830

· Mr. Mukesh Kumar Singlal

Naina Saree Center, Clowk Bazar, Kairana, Uttar Pradesh, India

Mobile No.: 91-9897556458

· Mr. Mudit Jain

Clowk Bazar, Kairana, Uttar Pradesh, India

Mobile No.: 91-9319361395

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.45.13
UK Pound	1	Rs.71.05
Euro	1	Rs.59.10

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.