MIRA INFORM REPORT

Report Date :

17.09.2011

IDENTIFICATION DETAILS

Name :	KHANNA PAPER MILLS LIMITED
Registered Office :	K-8-A, Lajpat Nagar Part – II, New Delhi – 110 024, Delhi
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	02.02.1985
Com. Reg. No.:	55-20023
Capital Investment / Paid-up Capital :	Rs.265.379 millions
CIN No.: [Company Identification No.]	U21012DL1985PLC020023
TAN No.: [Tax Deduction & Collection Account No.]	AMRK10059A
PAN No.: [Permanent Account No.]	AAACK1375K
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer of Paper and Paper Boards and Coated Duplex Board.
No. of Employees :	2000 [Approximately]

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

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

Maximum Credit Limit :	USD 8260000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Trader relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. 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 – June 30, 2010

Country Name	Previous Rating (01.04.2010)	Current Rating (30.06.2010)
India	A1	A1

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

LOCATIONS

Registered Office :	K-8-A, Lajpat Nagar Part – II, New Delhi – 110 024, Delhi, India
Tel. No.:	91-11-41725660
Fax No.:	91-11-41725660
E-Mail :	Manav.arora@khannapaper.com b.m.khanna@khannapaper.com info.delhi@khannapaper.com info@khannapaper.com nitin.sharma@khannapaper.com
Website :	www.khannapaper.com
Corporate Office :	801, Avdhesh House, Opposite Shri Govind Gurudwara, S.G. Highway, Ahmedabad – 54, Gujarat, India
Tel. No.:	91-79-26855714 / 16 / 32952073
Fax No.:	91-79-26855712 / 26855744
Gurgaon Corporate Office :	B-6, Infocity, Sector-34, Gurgaon-122001
Tel. No.:	91-124-4964800
Fax No.:	91-124-4694836
E-Mail :	Info.gurgaon@khannapaper.com
Gurgaon Works Unit I :	Village Fazilpur Badli, Faruk Nagar Distt Gurgaon-122506, Haryana, India
Tel. No.:	91-124-4694800 - 99
Corporate Office/ Works :	Fatehgarh Road, Amritsar – 143001, Punjab, India
Tel. No.:	91-183-5067100/ 109 / 504416 / 17 / 18 / 2710974 - 77
Fax No.:	91-183-5067110/111 / 504415 / 2710972 - 73
E-Mail :	info@khannapaper.com rcp@jla.vsnl.net.in
Works [Paper and Crepe Units] :	1453, Village Rajpur, Taluka Kadi, Kalol – Mehsana Highway, North Gujarat – 382715, India
Tel. No.:	91-2764-278492 – 94
Works [Coating Division] :	1423, Village Rajpur, Taluka Kadi, Kalol – Mehsana Highway, North Gujarat – 382715, India
Tel. No.:	91-2764-278413 / 14
Fax No.:	91-2764-278414
Branch Office:	Located at : Mumbai Delhi
Sales Office :	Chawri Bazar, Amritsar, Punjab, India

DIRECTORS

As on 29.09.2010

Name :

Mr. Brij Mohan Khanna

Designation :

Chairman cum Managing Director

Address :

House No. 19, New Garden Colony, Amritsar – 143 001, Punjab, India

Date of Birth/Age :

13.10.1947

Date of Appointment :

28.05.1994

DIN :

00062514

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U21012DL1985PLC020023	KHANNA PAPER MILLS LIMITED	Managing director	1/4/2009	28/05/1994	Active	NO
2	U74120DL2007PTC162249	SMOOTH BUSINESS SERVICES PRIVATE LIMITED	Director	18/04/2007	18/04/2007	Active	NO

Name :

Mr. Rahul Khanna

Designation :

Executive Director

Address :

House No. 19, New Garden Colony, Amritsar – 143 001, Punjab, India

Date of Birth/Age :

03.03.1979

Date of Appointment :

01.04.1997

DIN :

00067173

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U21012DL1985PLC020023	KHANNA PAPER MILLS LIMITED	Whole-time director	1/4/2009	1/4/1997	Active	NO
2	U74120DL2007PTC162249	SMOOTH BUSINESS SERVICES PRIVATE LIMITED	Director	18/04/2007	18/04/2007	Active	NO
3	U60231DL2007PLC169280	SHORE TO SHORE LOGISTICS INDIA LIMITED	Additional director	5/9/2011	5/9/2011	Active	NO

Name :

Mr. Saurabh Khanna

Designation :

Executive Director

Address :

House No. 19, New Garden Colony, Amritsar – 143 001, Punjab, India

Date of Birth/Age :

21.07.1981

Date of Appointment :

20.08.1999

DIN :

00062737

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U21012DL1985PLC020023	KHANNA PAPER MILLS LIMITED	Whole-time director	1/4/2009	20/08/1999	Active	NO
2	U74120DL2007PTC162249	SMOOTH BUSINESS SERVICES PRIVATE LIMITED	Director	18/04/2007	18/04/2007	Active	NO

Name :

Mr. Vijay Kumar Bhandari

Designation :

Independent Director

Address :

1704, Wallace Apartment (17^th Floor,) Sleater Road, Grant Road West, Mumbai – 400007, Maharashtra, India

Date of Birth/Age :

14.10.1943

Date of Appointment :

02.04.2007

DIN :

00052716

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U50404PB1974PLC003420	GURU NANAK AUTO ENTERPRISES LIMITED	Director	12/3/2004	12/3/2004	-	Active	NO
2	L51433WB1960PLC024539	HSIL LIMITED	Director	24/07/2004	24/07/2004	-	Active	NO
3	L24100MH1992PLC066691	JAYANT AGRO-ORGANICS LIMITED	Director	27/10/2005	27/10/2005	-	Active	NO
4	U65110PB1999PLC022634	CAPITAL LOCAL AREA BANK LIMITED	Director	2/9/2006	2/9/2006	-	Active	NO
5	U21012DL1985PLC020023	KHANNA PAPER MILLS LIMITED	Director	28/09/2007	2/4/2007	29/08/2011	Active	NO
6	U60231DL2007PLC169280	SHORE TO SHORE LOGISTICS INDIA LIMITED	Director	11/10/2007	11/10/2007	29/08/2011	Active	NO
7	L70200TZ1936PLC000001	PRIME URBAN DEVELOPMENT INDIA LIMITED	Director appointed in casual vacancy	30/06/2008	30/06/2008	30/06/2011	Active	NO
8	U27109WB1995PLC072223	SUPER SMELTERS LTD	Director	26/09/2008	19/08/2008	-	Active	NO
9	L16000MH1955PLC009584	GOLDEN TOBACCO LIMITED	Director	15/09/2009	31/07/2009	-	Active	NO

Name :

Mr. Yoginder Mehra

Designation :

Independent Director

Address :

12, Ram Bagh, Behind GPO, Patiala – 147001, Punjab, India

Date of Birth/Age :

27.05.1938

Date of Appointment :

02.04.2007

DIN :

01423383

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U21012DL1985PLC020023	KHANNA PAPER MILLS LIMITED	Director	28/09/2007	2/4/2007	-	Active	NO
2	U50101DL2000PTC107519	SHARNAM MOTOR SERVICES PRIVATE LIMITED	Additional director	15/11/2008	15/11/2008	1/2/2009	Active	NO

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 29.09.2010)

Names of Shareholders	No. of Shares
Brijmohan Khanna	9389246
Renu Khanna	4772855
Rahul Khanna	1818052
Brijmohan Khanna Huf	3607945
Saurabh Khanna	1818070
S N Mittal	2500
Rani Rama Sharma	100000
Shivan Khanna	2505000
Navroop Khanna	2505000
Shivinder S Sandhu	9820
Manveen Sandhu	3570
Surinder Singh Sandhu	1785
Sahiljit Sandhu	1785
Kiritpal Kaur Sandhu	1785
Vivek Sharma	267
Rajan Sharma	265
Total	26537945

Equity Share Breakup (Percentage of Total Equity)

(As on 29.09.2010)

Category	Percentage
Directors or relative of directors	99.54
Other top fifty (50) shareholders	0.46
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Paper and Paper Boards and Coated Duplex Board.

Products :

Product Description	ITC Code No.
Duplex Board	48052900
Paper and Paper Products	48021001

· L. W. C. Grey Black

· H. W. C. Grey Black

· L. W. C. White Black

· H. W. C. White Black

GENERAL INFORMATION

No. of Employees :

2000 [Approximately]

Bankers :

• Indian Overseas Bank
• Central Bank of India, Amritsar, Punjab, India
• Oriental Bank of Commerce, Civil Lines, Amritsar – 143001, Punjab, India
• Axis Bank Limited, 29, Kennedy Avenue, Court Road, Amritsar – 143001, Punjab, India
• IDBI Bank Limited, Sco-72-73, Sector 17Bll, Bank Square, Chandigarh-160017, Punjab, India
• Punjab National Bank, International Banking Branch, The Mall, Amritsar - 143001, Punjab, India
• Bank Of India, Ludhiana Mid Corporate Branch, Model Town, Ludhiana - 141001, Punjab, India
• CITI Bank
• HDFC Bank
• ICICI Bank
• Canara Bank

Facilities :

Secured Loan [Rs. in million]	31.03.2010	31.03.2009
From Oriental Bank of Commerce, Civil lines Amritsar
Term Loans	928.386	1001.001
Cash Credit	736.961	506.583
OBC – Citi Bank Buyers Credit	153.255	137.541
OBC – Citi bank Buyers Credit Term loan	65.106	0.000
From Oriental Bank of Commerce, Overseas Branch Amritsar
Packing Credit	101.700	88.968
From India Overseas Bank, Ranjit Avenue, Amritsar
Term Loans	462.901	590.776
Cash Credit	431.219	370.601
Packing Credit	54.981	50.281
IOB – Citi Bank Buyers Credit	85.982	92.522
From Punjab National Bank, International Banking Branch, the Mall Amritsar
Term Loans	93.734	502.839
Cash Credit	239.263	209.832
Packing Credit	47.954	57.603
Foreign Currency Loan Against Stock	55.558	160.817
Book Debts	163.445	163.582
PNB Hongkong / Kabul Buyer Credit	311.620	360.329
From Axis bank, Court Road, Amritsar
Cash Credit	256.530	66.813
Packing Credit	0.000	24.573
Foreign Currency	0.000	120.000
From Canara Bank
Term Loans	407.580	0.000
Cash Credit	460.622	0.000
Packing Credit	64.348	0.000
Foreign Currency	98.147	0.000
From Bank of India - Corporate Loan	488.641	0.000
From ICICI Bank – Term Loan Against Cars	6.473	0.455
From HDFC bank – Term Loan against cars	6.747	0.000
Total	5721.153	4505.116
Note : Cash credit borrowings are secured by hypothecation of stocks and book debts of the company The term loan from banks are secured by equitable mortgage of land building and hypothecation of machinery as first charge over company’s movable and immovable properties. The charge on the borrowing has been created in favor of the consortium formed by oriental bank of commerce, Punjab national bank, axis bank limited, canara bank, India overseas bank and bank of India. The member bank share the share on pari passu basis The loans from banks are also guaranteed by some of the directors of the company The foreign currency loan granted by bank are also secured by way of FDR’s of the company. Buyers credit from Citi bank has been availed for new machinery purchased against letter of comfort from OBC.
Unsecured Loan [Rs. in million]	31.03.2010	31.03.2009
From Directors and Shareholders	1.442	1.593
Security From Dealers	599.558	608.421
Total	601.000	610.014

Banking Relations :

Satisfactory

Auditors :

Name 1 :

GSA and Associates

Chartered Accountants

Address:

16, DDA Flats [Ground Floor], Panchsheel Shivalik MOR, Near Malviya Nagar, New Delhi – 110008, India

Tel. No.:

91-11-32099205-7

Email :

gsa@gsa.net.in

Associates/Subsidiaries :

· Satya Paper Mills, Amritsar, Punjab, India.

· R. C. Vansapati Limited, Amritsar, Punjab, India.

· R. C. Paper Mills Limited, Amritsar, Punjab, India.

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
45,000,000	Equity Shares	Rs.10/- each	Rs.450.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
26,537,945	Equity Shares	Rs.10/- each	Rs.265.379 millions

Paid up equity share capital includes

15922766 shares issued as bonus in the ration of 3 shares for 2 held on 27.04.2006 of Rs.10 each fully paid [previous year 15922766 shares]

189980 equity shares of Rs.10/- each issued for consideration other than cash [previous year 189980 shares of Rs.10/- each]

200000 equity shares allotted as bonus shares during the year [1994-95]. [previous year 200000 shares of Rs.10/- each]

2000000 equity shares of Rs.10/- each at par issued to shareholders of erstwhile R.C. Paper Mills Limited on account of merger [for consideration other than cash]. [previous year 2000000 shares of Rs.10/- each]

115179 equity shares of Rs.10/- each issued fully paid issued to the shareholders of erstwhile R.C. Vanaspati Limited on merger [for consideration other than in cash] [previous year 115179 shares @ Rs.10/- each]

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		265.379	265.379	265.379
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1801.799	1730.800	1383.275
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		2067.178	1996.179	1648.654
LOAN FUNDS
1] Secured Loans		5721.153	4505.116	3541.597
2] Unsecured Loans		601.000	610.014	465.971
TOTAL BORROWING		6322.153	5115.130	4007.568
DEFERRED TAX LIABILITIES		746.757	783.418	572.081
Deferred Liability		0.000	0.000	225.322
TOTAL		9136.088	7894.727	6453.625
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		5002.861	5142.937	3557.654
Capital work-in-progress		232.273	20.950	467.253
INVESTMENT		1.000	1.000	1.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2251.435	1503.614	1232.364
	Sundry Debtors	2067.761	1845.908	1243.505
	Cash & Bank Balances	207.424	126.514	92.456
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	641.814	433.981	121.410
Total Current Assets		5168.434	3910.017	2689.735
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	22.384	34.544
	Sundry Creditors	1231.690	1074.712	249.940
	Provisions	14.406	70.921	12.077
Total Current Liabilities		1268.480	1180.177	262.017
Net Current Assets		3899.954	2729.840	2427.718
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		9136.088	7894.727	6453.625

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	8885.524	6911.605	5405.857
		Other Income	0.000	0.000	11.362
		TOTAL (A)	8885.524	6911.605	5417.219
Less	EXPENSES
		Raw Material Consumed	5533.171	4270.714
		Manufacturing and other Expenses	882.330	669.211
		Power and Fuel	1279.048	917.750
		Selling Expenses	259.281	120.924
		Increase / Decrease in stock	60.163	[236.147]
		TOTAL (B)	8013.993	5742.452	4638.175
Less	PROFIT/LOSS BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		871.531	1169.153	779.044
Less	FINANCIAL EXPENSES (D)		406.080	349.957	354.444
	PROFIT/LOSS BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		465.451	819.196	424.600
Less/ Add	DEPRECIATION/ AMORTISATION (F)		330.197	276.062	235.538
	PROFIT / LOSS BEFORE TAX (E-F) (G)		135.254	543.134	189.062
Less	TAX (I)		63.255	199.610	6.045
	PROFIT / LOSS AFTER TAX (G-I) (J)		71.999	343.524	183.017
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		190.189	46.665	NA
Less	APPROPRIATIONS
		Transfer to General Reserve	100.000	200.000	--
	BALANCE CARRIED TO THE B/S		162.188	190.189	NA
	Earnings Per Share (Rs.)		2.71	12.95	--

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	0.81	4.97	3.38
Net Profit Margin (PBT/Sales)	(%)	1.52	7.86	3.50
Return on Total Assets (PBT/Total Assets}	(%)	1.33	6.00	3.03
Return on Investment (ROI) (PBT/Networth)		0.06	0.27	0.11
Debt Equity Ratio (Total Liability/Networth)		3.67	3.15	2.59
Current Ratio (Current Asset/Current Liability)		4.07	3.31	10.27

LOCAL AGENCY FURTHER INFORMATION

NOTE: The Registered office of the company has been shifted from E-330, First Floor, Greater Kailash Part II, New Delhi-110048, India to the present address w.e.f. 09.06.2011

OPERATIONS & PERFORMANCE REVIEW

The turnover of the company has increased by 25.40% i.e.. from Rs. 7307.870 millions to Rs. 9164.050 millions. The EBIDTA for the year was Rs. 871.530 million and the Profit after tax has been Rs. 135.250 millions. the Directors are hopeful for better results in the forthcoming year as the markets for their products especially newsprint is witnessing an upward trend. Further company's Gurgaon project is under progress which shall fetch us a turnover of approx Rs 2500.000 millions p.a. during the forthcoming years.

The total FOB value of exports for current year was Rs. 725.230 millions as compared to Rs. 521.760 millions in the previous period.

OUTLOOK

With the full utilization of the installed capacity the company is expected to increase the sales of News Prints Paper, Writing & Printing Paper and Board. The company got prestigious certification of Forest Stewardship Council, which again establishes company’s commitments towards better environmental products and will provide access to company’s products in environmental sensitive market. The company is also committed towards achieving efficiency by making attempts to reduce logistics costs and other expenses.

FORM 8

Corporate identity number of the company	U21012DL1985PLC020023
Name of the company	KHANNA PAPER MILLS PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	K-8-A, Lajpat Nagar Part II, New Delhi – 110024, New Delhi Delhi, India
This form is for	Creation of charge
Type of charge	Book Debts Movable Property Any Interest in movable property · Others – Current Assets
Particular of charge holder	Punjab National Bank, International Banking Branch, The Mall, Amritsar - 143001, Punjab, India
Nature of instrument creating charge	Agreement of Working Capital Demand Loan
Date of instrument Creating the charge	03.06.2011
Amount secured by the charge	Rs.500.000
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest : 11% Terms of Repayment : Repayable on Demand Margin : as per bank norms Extent and Operation of the charge : 100%
Short Particulars of the property charged	1st Charge on Current Assets by way of Hyp. of Raw Materials,Stock in Process and finished goods related to the activity of the unit and Receivables on pari passu basis with other consortium Banks.

Bankers Charges Report as per Registry

Name of the company	KHANNA PAPER MILLS PRIVATE LIMITED
Presented By	Shri Surinder Lal Sharma, Director
1) Date and description of instrument creating the change	Agreement for hypothecation of movable assets forming part of the fixed block assets to secure a term loan dated 30.11.2005
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 100.000 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 plant and machinery, stock, raw material, work in progress, finished goods, sundry Debtors (Domestic Exports) Loans and advances, Cash and bank balances and any other current asset immovable assets forming part of the fixed block assets.
4) Gist of the terms and conditions and extent and operation of the charge.	Interest on daily balances to be charged at 9.25% p.a., interst at 2^nd lto be charged over and above the normal rate of interest loan amount to be repaid in the equal installments Rs. 50.000 Millions before 31^st March 2006 and balnce Rs. 50.000 Millions before 13st April 2006
5) Name and Address and description of the person entitled to the charge.	Punjab National Bank, Mall Road, Amritsar, Punjab, India
6) Date and brief description of instrument modifying the charge	Not Applicable
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Not Applicable

FORM 8

Corporate identity number of the company	U21012DL1985PLC020023
Name of the company	KHANNA PAPER MILLS PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	E – 330, First Floor, Greater Kailash, Part – II, New Delhi – 110 048, India
This form is for	Creation of charge
Type of charge	Others
Particular of charge holder	IDBI Bank Limited, Sco-72-73, Sector 17Bll, Bank Square, Chandigarh-160017, Punjab, India
Nature of instrument creating charge	Subservient Charge on Current assets and movable fixed assets for providing invoice discounting facility by IDBI Bank Limited by Executing Deed of Hypothecation and facility agreement and other terms of sanction.
Date of instrument Creating the charge	01.12.2009
Amount secured by the charge	Rs. 200.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest : To be decided at the time of draw down Terms of Repayment : Within 90 Days from the date of discounting Margin : Minimum 3 Days interest margin for local and 7 days margin for out station invoices Extent and Operation of the charge : Subservient charge on currenty assets and movable fixed assets as per the terms of sanction and deed of hypothecation and facility agreement
Short Particulars of the property charged	Subservient charge be way of hypothecation on stock of raw materials, semi finished and finished goods, consumables stores and spares and such other movables including book debts, bills etc. Outstanding monies receivables, both present and future Subservient charge by way of hypothecation of all the borrower’s movable (Save and Except book debts) including movable machinery, machinery spares, tools and accessories, present and future.

FIXED ASSETS:

· Land

· Building

· Plant and Machinery

· Vehicles

· Computers

· Misc. Fixed Assets

website detalis:-

COMPANY PROFILE

The story of Khanna papers begins with their Founder-Director Brij Mohan Khanna. Born on October 13, 1947, in the dawn of India’s newly gained independence, he grew up with ideals of service to the country and a fierce belief that India could and must excel. Bright and intelligent, he sought and got admission for an M.B.B.S degree. However a re-look at his family finances made him decide that he would put his fresh, young mind to improving the family future.

Starting with a small sum of Rs.0.10 millions culled from the family’s savings Brij Mohan set up a small paper plant in 1968 with the capacity of 200 Kg, and named it "Khanna Small Scale Industry". With his hard work and canny business sense, the plant flourished and grew.

Never one to rest on his successes, in 1978 he started a Duplex Board Plant with a capacity of 5 metric ton. In honour of his father, Shri Rattan Chand Khanna he named it "Rattan Paper Mills".  As this second plant flourished, the time came to increase the capacity and the product range. In1981, he put up another unit by the name of "Satya Paper Mills" with a capacity of 8 TPD of writing Paper. This was named after his mother Shrimati Satyavati Khanna.

In small ways are the inner workings of the mind reflected – Brij Mohan Khanna, remains a strong believer in family values. The difference is that today, the family comprises not just of his wife Renu Khanna and his two sons Rahul and Saurabh, but encompasses the entire staff and workers of subject. This perhaps is the underlying reason for the success of Khanna Papers – the loving guidance and far seeing vision of Brij Mohan Khanna, who is a patriarch in the true sense.

In 1991 he set up another unit in the name of "R. C. Paper Mills Private. Limited "with a capacity of 25 TPD.

In a short span of five years, in 1996, “Khanna Paper Mills Private Limited.” was created by merging together R.C. Paper Mills and Satya Paper Mills.

The company grew and in keeping with the changing ideologies of the new century, Brij Mohan conceived the idea of making quality paper from waste paper. Such thinking was typical of the man who moves with the times and has always been mindful of the critical need to preserve their natural resources, and use viable alternatives that do not preclude cutting down of trees.

As he puts it – “If the world must have paper, and they have chosen to fulfill that need, then the responsibility lies with them to always be on the lookout for ecological alternatives to fulfill that need”.

Conceptualized in 2000, this unique project was completed in 2002. This successful experiment with utilizing waste, coalesced into their strong Ecological Policy, and is one of the basic tenets in their business ideology.

The company has traversed a long distance from manufacturing 200 Kgs sun dry board per day in 1965 to 400 tons of paper and 300 tons of board per day, today. They now have a manufacturing capacity of 1.2 lac metric ton per annum.

Subject is now an ISO 9001:2000 certified company, manufacturing quality paper and board not only for domestic consumption but also exporting it to the SAARC countries, and to Africa and the Middle East. Their export Market continues to grow at a rapid rate. Their newest product the “Flexible White Board” challenges the domination of the existing behemoth.

They are today the third largest manufacturing unit housed within one humongous single location premise.

The story of the latest entrant into the Top 5 league of Paper Manufacturers has just begun.

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.47.46
UK Pound	1	Rs.74.95
Euro	1	Rs.65.79

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--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		50

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.