MIRA INFORM REPORT

Report Date :

06.06.2013

IDENTIFICATION DETAILS

Name :	KAYGAON PAPER MILLS LIMITED
Registered Office :	C-8, Saroj Apartment, Opposite Holy Spirit Hospital, M C Road, Andheri (East), Mumbai – 400093, Maharashtra
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	10.04.1989
Com. Reg. No.:	11-051317
Capital Investment / Paid-up Capital :	Rs. 20.000 Millions
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 Kraft Paper and Paper Board.
No. of Employees :	200 (Approximately)

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 309000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is an established company having a satisfactory track record. Trade 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.

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	‘BB’
Rating Explanation	ICRA has suspended its rating ‘BB’ due to lack of information.
Date	April 2013

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

INFORMATION PARTED BY

Name :	Ms. Niharica
Designation :	Corporate Manager [Finance]
Contact No.:	91-22-28321370
Date :	05.06.2013

LOCATIONS

Registered Office :	C-8, Saroj Apartment, Opposite Holy Spirit Hospital, M C Road, Andheri (East), Mumbai – 400093, 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 – 431003, 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 28.09.2012

Name :	Mr. Omprakash Damodar Rathi
Designation :	Managing director
Address :	Plot No. 153, N-3, CIDCO, Jalna Road, Aurangabad – 431003, Maharashtra, India
Date of Birth/Age :	11.05.1952
Date of Appointment :	10.04.1989
DIN No.:	00895316
Name :	Mr. Akshay Omprakash Rathi
Designation :	Director
Address :	Plot No. 153, N-3, CIDCO, Jalna Road, Aurangabad – 431003, Maharashtra, India
Date of Birth/Age :	04.04.1978
Date of Appointment :	31.01.2004
DIN No.:	00895295
Name :	Mr. Hemant Yeshwant Kunte
Designation :	Director
Address :	Plot No. 153, N-3, CIDCO, Jalna Road, Aurangabad – 431003, Maharashtra, India
Date of Birth/Age :	19.12.1958
Date of Appointment :	22.10.2003
DIN No.:	00895337

KEY EXECUTIVES

Name :	Ms. Niharica
Designation :	Corporate Manager [Finance]

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

NOTE:

SHAREHOLDING DETAILS FILE ATTACHED

AS ON 28.09.2012

Equity Share Breakup	Percentage of Holding
Category
Bodies corporate	2.50
Directors or relatives of directors	89.55
Other top fifty shareholders	7.95
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Kraft Paper and Paper Board.

Products/ Services :

ITC Code No.	Product Descriptions
470710.00	Kraft Paper and Paper Board

Imports :

Products :

Raw Material

Countries :

Ø Europe

Ø China

Ø Middle East

Terms :

Selling :

Cash and Credit

Purchasing :

Cash and Credit

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Paper and Paper Board, Newsprint	M. Tons	40000	36000	26588

GENERAL INFORMATION

Customers :

Retailers, End Users and OEM’s

No. of Employees :

200 (Approximately)

Bankers :

Union Bank of India, 323-A, Bhagwati Bhavan, Matunga (East), Mumbai – 400019, Maharashtra, India

Facilities :

Cash Credit – Rs. 88.000 Millions / TL – Rs. 66.000 Millions [Union Bank of India]

Secured Loans	31.03.2012	31.03.2011
	(Rs. In Millions)
Term Loan From Bank (Secured by way of Hypothecation of all the present 8s future Plant and machinery of the Company and by the personal guarantees of directors of the Company.lt includes two types of loans taken from Union Bank of India, taken in financial years 2009-2010 and 2010-2011)	23.561	32.836
Hire Purchase Loan (Hire Purchase Loan taken from State Bank of India was taken during the financial year 2010-2011 and carries a rate of interest of 7% p.a. The loan is repayable in 60 installments of Rs. 66,532 each along with interest, from the date of loan.)	1.832	2.752
Working Capital Facilities from Bank (Secured by way of hypothecation of stock 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 and also personal guarantee of the directors.)	62.498	57.902
Term Loan	9.000	7.000
Hire Purchase Loan	0.921	1.485
Total	97.812	101.975

Banking Relations :	--
Auditors :
Name :	Walter and Associates Chartered Accountants
Address :	B-6/7, Saroj Apartments, Mahakali Caves Road, Mumbai – 400093, Maharashtra, India
Tel. No.:	91-22-40568100 (B)
Fax No.:	91-22-40568154
E-Mail :	wna@wnaca.com
	http://www.wnaca.com
Income-tax PAN of auditor or auditor's firm :	AAAFA0445K
Associates Concern :	Hardoli Paper Mills Limited

CAPITAL STRUCTURE

AS ON 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
3,500,000	Equity Shares	Rs. 10/- each	Rs. 35.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2,000,000	Equity Shares	Rs. 10/- each	Rs. 20.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		20.000	20.000	20.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		57.341	44.890	34.539
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		77.341	64.890	54.539
LOAN FUNDS
1] Secured Loans		97.812	101.975	76.276
2] Unsecured Loans		85.172	73.746	76.675
TOTAL BORROWING		182.984	175.721	152.951
DEFERRED TAX LIABILITIES		29.315	26.530	22.449
TOTAL		289.640	267.141	229.939
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		188.813	184.430	147.677
Capital work-in-progress		2.480	11.821	18.843
INVESTMENT		0.845	0.845	0.845
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	26.845	52.866	56.532
	Sundry Debtors	100.957	60.041	43.082
	Cash & Bank Balances	13.713	7.037	2.856
	Other Current Assets	7.498	5.135	0.000
	Loans & Advances	13.194	10.600	20.765
Total Current Assets		162.207	135.679	123.235
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	49.738	40.949	54.606
	Other Current Liabilities	13.922	23.880	6.055
	Provisions	1.045	0.805	0.000
Total Current Liabilities		64.705	65.634	60.661
Net Current Assets		97.502	70.045	62.574
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		289.640	267.141	229.939

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	693.227	582.734	476.389
		Other Income	0.959	1.707	0.008
		TOTAL (A)	694.186	584.441	476.397
Less	EXPENSES
		Cost of Material Traded	11.310	14.661
		Raw Material Consumed	435.456	372.769
		Employee Benefits Expenses	13.119	11.668
		Other Expenses	186.976	145.767
		Changes in Inventories of Finished goods	0.716	(0.951)
		TOTAL (B)	647.577	543.914	446.642
	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		46.609	40.527	29.755
Less	FINANCIAL EXPENSES (D)		14.446	13.093	6.100
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		32.163	27.434	23.655
Less/ Add	DEPRECIATION/ AMORTISATION (F)		14.087	12.301	9.864
	PROFIT BEFORE TAX (E-F) (G)		18.076	15.133	13.791
Less	TAX (H)		5.625	4.678	4.259
	PROFIT AFTER TAX (G-H) (I)		12.451	10.455	9.532
Less	Excess / Short Provision for tax		0.000	0.104	0.000
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		35.591	25.240	15.708
	BALANCE CARRIED TO THE B/S		48.042	35.591	25.240
	IMPORTS
		Raw Materials	162.799	187.101	148.255
		Stores & Spares	1.427	1.245	1.816
		Capital Goods	0.299	0.000	5.509
	TOTAL IMPORTS		164.525	188.346	155.580
	Earnings Per Share (Rs.)		6.23	5.18	4.77

Particulars	31.03.2013
Sales Turnover (Approximately)	731.300

Expected Sales (2013-2014): Rs. 956.600 Millions

The above information has been parted by Ms. Niharica [Corporate Finance Manager]

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	1.79	1.79	2.00
Net Profit Margin (PBT/Sales)	(%)	2.61	2.60	2.89
Return on Total Assets (PBT/Total Assets}	(%)	5.15	4.73	5.09
Return on Investment (ROI) (PBT/Networth)		0.23	0.23	0.25
Debt Equity Ratio (Total Debt/Networth)		2.37	2.71	2.80
Current Ratio (Current Asset/Current Liability)		2.51	2.07	2.03

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS:

Particulars	31.03.2012	31.03.2011	31.03.2010
	(Rs. In Millions)
Trade Payable	40.963	29.673
Accrual for Expenses	8.096	8.552
Others	0.679	2.724
Total	49.738	40.949	54.606
Note: In view of non-receipt of information from suppliers in terms of section 16 of the Micro, Small and Medium Enterprises Development Act, 2006 (MSMEDA) concerning their status, disclosure of particulars regarding unpaid amounts together with interest on delayed payment to such suppliers cannot be made in the accounts

Sr. No.	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	Yes
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	Yes
10]	Designation of contact person	Yes
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	Yes
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	Yes
20]	Export / Import details (if applicable)	Yes
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
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
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

UNSECURED LOANS

Unsecured Loans	31.03.2012	31.03.2011
	(Rs. In Millions)
Deferred Payment Liabilities (Sales Tax Deferral Scheme under the Sales Tax Incentive Scheme, 1988 and 1992 and the same was payable after the end of Tenth year in five equal annual installments.)	43.426	46.230
Deposits	5.600	0.000
Related Parties -Repayable on demand	9.483	12.428
Incorporates Loans -Repayable on demand	22.135	10.560
Deferred Payment Liabilities	4.528	4.528
Total	85.172	73.746
Note: The balance of “Statutory Dues” and “Deferred Payment Liabilities” is subject to reconciliation and confirmation.

OPERATIONS:

During the year, the Company has achieved the production of 30,413 MTs as against 26,582 MTs in the previous year.

Due to increase in production, the Company has achieved a turnover of Rs. 694.187 Millions as against the turnover of Rs. 584.441 Millions in the last year. Resultantly the net profit increased by 18.78% and posted a net profit of Rs. 18.076 Millions as against net profit of Rs. 15.133 Millions in the previous year.

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, Opposite Holy Spirit Hospital, M C Road, Andheri (East), Mumbai – 400093, Maharashtra, India Email: kpml_amb@rediffmail.com
This form is for	Modification of charge
Charge identification number of the modified	10140479
Type of charge	Immovable property
Particular of charge holder	Union Bank of India, 323-A, Bhagwati Bhavan, Matunga (East), Mumbai – 400019, Maharashtra, India Email: walter@wnaca.com
Nature of description of the instrument creating or modifying the charge	Deed of Mortgage dtd 30.03.2012
Date of instrument Creating the charge	30.03.2012
Amount secured by the charge	Rs. 137.500 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest Hyp (Stock and Book Debts)- 65.000 Millions --BR + 4.50%, TL I --- 26.300 Millions --BR + 4.75%, TL II --- 6.400 Millions --BR + 4.75%, TL III --- 20.000 Millions -- BR + 4.75%, Bank Gauarntee – 7.500 Millions --- as applicable Terms of Repayment Term Loan I 2010-11 = Rs. 4.000 Millions (equal monthly installment) 2011-12 = Rs. 5.000 Millions (equal monthly installment) 2012-13 = Rs. 7.000 Millions (equal monthly installment) 2013-14 = Rs. 9.000 Millions (equal monthly installment) 2014-15 = Rs. 10.000 Millions (equal monthly installment) Term Loan II --payable in 60 monthly instalments of Rs. 0.167 Million + Int Per Mth Term Loan III (new) -- payable in 60 monthly instalments of Rs. 0.333 Million + Int Per Mth Margin Stock / Book Debts = 25% Bank Gaurantee = 25% Term Loan I = 25% Term Loan II = 26.50% Term Loan III = 33.33% 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, Taluka Gangapur, District Aurangabad
Date of Modification	18.01.2011
Particulars of the present modification	The original charge was created on 23.12.2008 for 50.000 Millions and 1st modified on 29.10.2009 for Rs. 95.000 Millions, 2nd on 18.01.2011 for Rs. 105.000 Millions and now by this modification the limits increased from Rs. 105.000 Millions to Rs. 137.500 Millions.

CONTINGENT LIABILITIES:

Particulars	31.03.2012	31.03.2011
	(Rs. in Millions)
MPCB	0.400	0.400
MSEDCL	5.750	5.750
Security Deposit	0.485	0.776
Jayakwadi Irrigation Division	0.821	0.821
Margin Money pertaining to buyers credit	11.225	0.000

FIXED ASSETS:

Ø Freehold Land

Ø Factory Buildings

Ø Building

Ø Plant and Machinery

Ø Electric Installation

Ø Furniture and Fixture

Ø Other Assets

Ø Vehicles

Ø Computer

Ø 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 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. 56.42
UK Pound	1	Rs. 86.54
Euro	1	Rs. 73.86

INFORMATION DETAILS

Information Gathered by :	SVA
Report Prepared by :	MRI / BVA

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
DEFAULTERS
--RBI	YES/NO	NO
--EPF	YES/NO	NO
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.