MIRA INFORM REPORT

Report Date :

21.07.2012

IDENTIFICATION DETAILS

Name :	KENT R O SYSTEMS LIMITED (w.e.f.22.05.2007)
Formerly Known As :	KENT R O SYSTEMS PRIVATE LIMITED
Registered Office :	H-35, South Extension, Part – 1, Kidwai Nagar, New Delhi – 110 049
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	12.04.2007
Com. Reg. No.:	55-161952
Capital Investment / Paid-up Capital :	Rs.9.857 Millions
CIN No.: [Company Identification No.]	U41000DL2007PLC161952
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer, Exporter, Importer and Trader of R. O. Water Purifiers for Household and Industrial Applications
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

A (63)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 4300000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and a reputed company having fine track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal 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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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 :	H-35, South Extension, Part – 1, Kidwai Nagar, New Delhi – 110 049, India
Tel. No.:	91-11-41655801
Fax No.:	91-11- 26567540
E-Mail :	snr-clc@snr.net.in maheshgupta@kent.co.in clc@snr.net.in
Website :	http://www.kent.co.in
Factory:	Khasra No. 93 Village Bantakhedi Roorkee Haridwar - 247668 Uttarakhand, India
Head Office :	A –2, Sector 59, Noida - 201309, Uttar Pradesh, India
Tel. No.:	91-120-3075000
Fax No.:	91-120-4259000
E-Mail :	sales@kent.co.in

DIRECTORS

As on 12.09.2011

Name :

Mr. Mahesh Gupta

Designation :

Managing Director

Address :

H-35, South Extension – 1, New Delhi – 110049, Delhi, India

Date of Birth:

27.09.1954

Date of Appointment :

01.04.2011

DIN No.:

00458281

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U74899DL1988PTC030560	S S APPLIANCES PRIVATE LIMITED	Managing director	9/02/1988	9/02/1988	-	Active	NO
2	U22222UP1994PTC016293	VARUN MEDIA PRIVATE LIMITED	Managing director	4/04/1994	4/04/1994	-	Active	NO
3	U41000DL2007PLC161952	KENT R O SYSTEMS LIMITED.	Managing director	1/04/2011	12/04/2007	-	Active	NO
4	U74899DL1951GAP001947	PHD CHAMBER OF COMMERCE AND INDUSTRY	Director	23/12/2011	23/12/2011	-	Active	NO

Name :

Ms. Sunita Gupta

Designation :

Director

Address :

H-35, South Extension – 1, New Delhi – 110049, Delhi, India

Date of Appointment :

12.04.2007

DIN No.:

00437823

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U74899DL1988PTC030560	S S APPLIANCES PRIVATE LIMITED	Director	1/04/1989	1/04/1989	-	Active	NO
2	U22222UP1994PTC016293	VARUN MEDIA PRIVATE LIMITED	Director	4/04/1994	4/04/1994	-	Active	NO
3	U41000DL2007PLC161952	KENT R O SYSTEMS LIMITED.	Director	12/04/2007	12/04/2007	-	Active	NO

Name :

Mr. Varun Gupta

Designation :

Director

Address :

H-35, South Extension – 1, New Delhi – 110049, Delhi, India

Date of Appointment :

12.04.2007

DIN No.:

00458328

Other Directorship:

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U74899DL1988PTC030560	S S APPLIANCES PRIVATE LIMITED	Director	28/09/2004	28/09/2004	-	Active	NO
2	U41000DL2007PLC161952	KENT R O SYSTEMS LIMITED.	Director	12/04/2007	12/04/2007	-	Active	NO

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 12.09.2011

Names of Shareholders	No. of Shares
Mahesh Gupta	504500
Sunita Gupta	361000
Varun Gupta	118000
Surbhi Gupta	50
M/s S.S.Appliance (India)	2050
Rajinder Mohan Jindal (India)	50
M/s Varun Oilcon Marketing Private Limited (India)	50
Total	985700

Equity Share Break up (Percentage of Total Equity)

As on 12.09.2011

Category	Percentage
Bodies corporate	0.22
Directors or relatives of Directors	99.78
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer, Exporter, Importer and Trader of R. O. Water Purifiers for Household and Industrial Applications

PRODUCTION STATUS (As on 31.03.2011)

Particulars	Unit	Installed Capacity	Actual Production
Water Purifier	Nos	1800000	409564

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Oriental Bank of Commerce, F-1, CSC, DDA Market, Vasundhra Enclave, Delhi-110095, India

Facilities :

(Rs. in Millions)

Secured Loan	As on 31.03.2011	As on 31.03.2010
Rupee term loans banks secured	16.648	17.984
Total	16.648	17.984

Banking Relations :	--
Auditors :
Name :	SNR And Company Chartered Accountant
Address :	A-15, Second Floor, Hauz Khas, New Delhi 110016, India
PAN.:	AACPV5130G
Related Party :	· S S Appliances Private Limited, India (CIN: U74899DL1988PTC030560) · Kent Appliances, India · Varun Media Private Limited, India (CIN: U22222UP1994PTC016293)

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
1500000	Equity Shares	Rs.10/- each	Rs.15.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
985700	Equity Shares	Rs.10/- each	Rs.9.857 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		9.857	9.857	9.857
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1073.177	623.440	297.982
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1083.034	633.297	307.839
LOAN FUNDS
1] Secured Loans		16.648	17.984	25.903
2] Unsecured Loans		0.000	0.000	28.114
TOTAL BORROWING		16.648	17.984	54.017
DEFERRED TAX LIABILITIES		3.067	5.310	2.286
TOTAL		1102.749	656.591	364.142
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		354.538	318.648	142.547
Capital work-in-progress		53.864	0.278	19.193
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	409.263	256.813	142.490
	Sundry Debtors	139.690	88.403	147.350
	Cash & Bank Balances	302.698	81.644	69.114
	Other Current Assets	0.151	0.158	2.956
	Loans & Advances	296.846	177.091	84.810
Total Current Assets		1148.648	604.109	446.721
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	212.466	152.177	193.456
	Other Current Liabilities	145.314	52.213	25.191
	Provisions	96.521	62.054	25.672
Total Current Liabilities		454.301	266.444	244.319
Net Current Assets		694.347	337.665	202.402
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1102.749	656.591	364.142

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	2383.480	1659.750	1166.404
		Other Income	61.147	43.235	17.645
		TOTAL (A)	2444.627	1702.985	1184.049
Less	EXPENSES
		Consumption materials changes inventories	1107.375	783.623
		Manufacturing service costs	72.879	54.714
		Employee related expenses	173.538	138.540
		Administrative selling other expenses	576.804	360.495
		TOTAL (B)	1930.596	1337.372	955.706
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		514.031	365.613	228.343
Less	FINANCIAL EXPENSES (D)		0.162	1.037	3.122
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		513.869	364.576	225.221
Less/ Add	DEPRECIATION/ AMORTISATION (F)		48.309	26.978	13.069
	PROFIT BEFORE TAX (E-F) (G)		465.560	337.598	212.152
Less	TAX (I)		15.823	12.140	11.957
	PROFIT AFTER TAX (G-I) (J)		449.737	325.458	200.195
	EARNINGS IN FOREIGN CURRENCY
		FOB Value of Export	34.945	23.631	12.029
	TOTAL EARNINGS		34.945	23.631	12.029
	IMPORTS
		Raw Materials including Packing Material	299.715	369.919	230.503
	TOTAL IMPORTS		299.715	369.919	230.503
	Earnings Per Share (Rs.)		472.31	342.50	215.23

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	18.40	19.11	16.91
Net Profit Margin (PBT/Sales)	(%)	19.53	20.34	18.19
Return on Total Assets (PBT/Total Assets}	(%)	40.53	55.88	47.49
Return on Investment (ROI) (PBT/Networth)		0.43	0.53	0.79
Debt Equity Ratio (Total Liability/Networth)		0.43	0.42	0.79
Current Ratio (Current Asset/Current Liability)		2.53	2.27	1.83

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1) Year of Establishment	Yes
2) Locality of the firm	Yes
3) Constitutions of the firm	Yes
4) Premises details	No
5) Type of Business	Yes
6) Line of Business•	Yes
7) Promoter’s background	Yes
8) No. of employees	Yes
9) Name of person contacted	No
10) Designation of contact person	No
11) Turnover of firm for last three years	Yes
12) Profitability for last three years	Yes
13) Reasons for variation <> 20%	--
14) Estimation for coming financial year	No
15) Capital in the business	Yes
16) Details of sister concerns	Yes
17) Major suppliers	No
18) Major customers	No
19) Payments terms	No
20) Export / Import details (if applicable)	No
21) Market information	--
22) Litigations that the firm / promoter	--
23) Banking Details	Yes
24) Banking facility details	Yes
25) Conduct of the banking account	--
26) Buyer visit details	--
27) Financials, if provided	Yes
28) Incorporation details, if applicable	Yes
29) Last accounts filed at ROC	Yes
30) Major Shareholders, if available	Yes

BANKERS CHARGES REPORT AS PER REGISTRY

This form is for	Creation of charge
Corporate identity number of the company	U41000DL2007PLC161952
Name of the company	KENT R O SYSTEMS LIMITED.
Address of the registered office or of the principal place of business in India of the company	H-35, South Extension, Part – 1, Kidwai Nagar, New Delhi – 110 049, India
Type of charge	Book Debts Movable Property Immovable property
Particular of charge holder	Oriental Bank of Commerce, F-1, CSC, DDA Market, Vasundhra Enclave, Delhi-110095, India Email: bm0844@obc.co.in
Nature of description of the instrument creating or modifying the charge	Agreement of hypothecation of assets.
Date of instrument Creating the charge	18.07.2007
Amount secured by the charge	Rs.40.000 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest At PLR, Presently 13.25% P.A. Terms of Repayment As per agreement. Margin Margin-25% Extent and Operation of the charge 100%
Short particulars of the property charged	Hypothecation of stock of raw material, stock in process, finished goods, stores and spares and receivables. Hypothecation of all existing and future fixed assets of the company.

FIXED ASSETS:

• Factory Land at Roorkee
• Factory Land at Bantakhedi
• Plot at Greater Noida
• Factory Building at Roorkee
• Office at Mumbai
• Office at Ludhiana
• Office at Jaipur
• Plant and Machinery
• Mould
• Computers and Software
• Furniture and Fixtures
• Office Equipments
• Scooter and Motor Cycles
• Motor Cars
• Commercial Vehicles

AS PER WEBSITE

PRESS RELEASES

Subject Inaugurates New manufacturing Facility at Roorkee

His Holiness “Sri Sri Ravi Shankar ji accorded warm welcome on the inauguration of KENT RO System‘s new plant at Roorkee”

Subject- India’s s largest RO water purifiers company, inaugurated its new manufacturing facility at Roorkee (Uttrakhand) the new plant was inaugurated by His Holiness Sri Sri Ravi Shankar Ji – founder of Art of Living in the presence of over 200 guests.

On the occasion Sri Sri Ravishankar ji also unveiled, Kent Gold Ultima – a low cost Water Purifier especially designed for the needs of Rural India, which runs without any electricity or power.

The company which already has manufacturing facility in Roorkee, embarked another plant with an idea to increase the manufacturing capacity of the company in the wake of growing demand for its water purifiers in domestic and focus on overseas markets.

On the occasion Sri Sri Ravi Shankar ji said, “Air and Water are the two prime essence of human life! But unfortunately there is hardly any place where one can find pure and clean water or air. The resources are getting polluted day by day. I am glad that Kent RO is going ahead with its mission to provide clean drinking water to the people beyond the geographical boundaries of this country”

He added, “Subject is among one of the few companies who believe in serving mankind with innovations. Innovation is the mantra of success and I am sure in the time to come Kent RO’s innovations will always helpful for people to live a pure and healthy life”

During the proceedings of inauguration Mr.Mahesh Gupta, Chairman, Subject said that, “These upcoming years will witness the colossal growth of “KENT RO” as we’ll be escalating the existing production of 0.150 Million piece per annum upto 0.500 Million pieces. Further, to achieve this target; we’ll be adding more innovative and health care products and under huge R and D, we will work aggressively to achieve this target, so that maximum number of people can avail the benefits of having healthy and disease free life.”

The main aim behind commencing another plant is to escalate the production. The expansion would help Kent RO to meet the growing demand of water purifiers and also provide clean drinking water to customers with affordable range of purifiers.

Talking about the newly launched water purifier Mr. Gupta added that, “this water purifier has been launched keeping in mind the needs and pocket of the rural India. In the last decade, interest in home water treatment products has grown tremendously. Unfortunately, it isn't always easy for consumers to know whether or not a particular product will actually be as safe and effective as everyone claims at reducing various contaminants from your water supply. But I can promise that this is the only purifier in this category which distils cyst and its certified by NSF USA.

Kent RO is the pioneering health care products manufacturing company with a vision to make this world disease free. It’s the company which started its journey way back in 1999, with an unambiguous product philosophy, i. e., to help people in attaining the biggest and most precious wealth called "Perfect Health". And that is reflected in their range of health care products.

With an initial investment of Rs 15 crore, this manufacturing plant is spread on 4 acres of area with 1,00,000 sq ft. one of the most modern & hi tech water purifier plant. The plant is designed in a very eco - friendly way, so that it the manufacturing of the products doesn’t create any kind of a problem for the environment.

Commenting on the marketing strategies Mr Gupta said, “After making a strong foot print and with almost 40 % market share in RO purifiers now are focus is to replicate this success in overseas markets as well.

“We have started exporting our products to countries Saark and Middle East countries including Iraq, Dubai, Bangladesh, Nepal, and Kenya in Africa etc. In the next 2-3 years we are expecting a contribution of 15 % in our total turnover fro exports. Currently our turnover is 170 crore and we look forward to become a 500 crore player by 2013.’ Added Mr Gupta

Commenting on the move of the company, Sri Sri Ravi Shankarji said that, “people shell out the most of their income on medicines as suffering from diseases happening because of intake of contaminated food or water. Expenditures apart, suffering with those vulnerable diseases is a tedious task - one has to suffer a lot of pain, not only the patient but the whole family suffers with the inmate. So this is the righteous move as there is a need to increase use of health care products which won’t hamper the health of the people but would help them to live their life harmoniously.”

For consumers therefore, KENT RO translates the dream of living a painless life in reality. This plant will be in function from April. The company has a very good reason to start off its plant by April, as summer starts off by that time and many people suffer from diseases which occur because of having contaminated water or food.

From residential needs to commercial ones, KENT RO gives a lot of options to the consumers. From Mineral RO’s to other purification devices - everything is available at competitive prices.

About

Subject is a leading company in manufacturing of health care products like purifiers, which started its journey way back in 1999. It has a diversified group interest under various categories with strong presence in selling water purifiers like mineral ROs, gravity purifiers and water softeners. Pioneer in bringing revolutionary Reverse Osmosis (RO) technology to India for the first time, Kent, started in 1995 in Noida, India. Despite a humble beginning, today Kent is a strong organization with offices spread across major cities of India. Most importantly, today Kent has lakhs of satisfied customers to its credit.

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.55.15
UK Pound	1	Rs.86.58
Euro	1	Rs.67.60

INFORMATION DETAILS

Report Prepared by :

DPK

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	6
--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		63

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.