MIRA INFORM REPORT

Report Date :

12.10.2013

IDENTIFICATION DETAILS

Name :	KHANNA PAPER MILLS LIMITED [w.e.f. 28.06.2006]
Formerly Known As :	KHANNA PAPER MILLS PRIVATE LIMITED
Registered Office :	K-8-A, Lajpat Nagar Part – II, New Delhi – 110 024
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	02.02.1985
Com. Reg. No.:	55-020023
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 :	Manufacturing of Writing and Printing Paper (WPP), Duplex/Triplex Board, Newsprint (NP) and Trading of Paper and Paper Products.
No. of Employees :	2000 [Approximately]

RATING & COMMENTS

MIRA’s Rating :

Ba (49)

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

Maximum Credit Limit :	USD 9760000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track record. It has achieved better increase in its sales turnover as well as net profitability during 2012. Financial position appears to be decent. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – March 31^st, 2013

Country Name	Previous Rating (31.12.2012)	Current Rating (31.03.2013)
India	A1	A1

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

INDIAN ECONOMIC OVERVIEW

We are living in a world where volatility and uncertainty have become the New Normal. We saw a change of government in countries like Tunisia, Egypt, Libya and Vietnam. Once powerful countries in Europe are now fighting for bankruptcy. We have taken growth in the developing part of the world for granted but economic growth in China and India has begun to slow. Companies that were synonymous with their product categories just a few years ago are now no longer in existence. Kodak, the inventor of the digital camera had to wind up its operations, HMV, the British entertainment retailing company and Borders, once the second largest bookstore have shut down due to their inability to evolve their business models with the changing time. Readers’ Digest, Thomson Register are no more !

There is another megatrend happening. The World order is changing as economic power shifts from West to East. According to McKinsey study, it took Britain more than 100 years to double its economic output per person during its industrial revolution and the US later took more than 50 years to do the same. More than a century later, China and India have doubled their GDP per capital in 12 and 18 years respectively. By 2020, emerging Asia will become the world’s largest consuming block, overtaking North America.

The years after the outbreak of the global financial crisis, the world economy continues to remain fragile. The Indian economy demonstrated remarkable resilience in the initial years of the contagion but finally lost ground last year. GDP growth slowed down. Currency has been weakening. There is a marked deceleration in agriculture, industry and services. Dampening sentiment led to a cut-back in investment as well as private consumption expenditure.  Inflation remained at high levels fuelled by the pressure from the food and fuel sectors. The large fiscal and current account deficit s continued to cause grave concern. It is imperative that India regains its growth trajectory of 8-9 % sooner than later. This is crucially important given the need to create gainful livelihood opportunities for the millions living in poverty as also the large contingent of young people joining the job market every year.

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	BBB+ [Long Term Bank Facilities]
Rating Explanation	Moderate degree of safety.
Date	26.08.2013

Rating Agency Name	CARE
Rating	A2 [Short Term Bank Facilities]
Rating Explanation	Strong degree of safety and low credit risk.
Date	26.08.2013

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.

LOCATIONS

Registered Office :	K-8-A, Lajpat Nagar Part – II, New Delhi – 110 024, 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 1 :	B-6, Infocity, Sector-34, Gurgaon-122 001, Haryana, India
Tel. No.:	91-124-4964800
Fax No.:	91-124-4694836
E-Mail :	Info.gurgaon@khannapaper.com
Factory 1 :	Village Fazilpur Badli, Faruk Nagar, District Gurgaon-122 506, Haryana, India
Tel. No.:	91-124-4694800 - 99
Corporate Office 1 / Factory 2 :	Fatehgarh Road, Village Nangli, Khasra No. 93/3, 93/4 and 93/5, Amritsar–143 001, Punjab, India
Tel. No.:	91-183-5067100/ 109 / 504416 / 17 / 18 / 2710974 - 77
Fax No.:	91-183-5067110/111 / 504415 / 2710972 - 73
E-Mail :	rcp@jla.vsnl.net.in
USA Office :	Suite 211 B, 50 Harrison Street, Hoboken Business Center, Hoboken, NJ
Tel No.:	201-850-1707
Fax No.:	201-608-6991
Email :	info.us@khannapaper.com

DIRECTORS

AS ON 29.09.2012

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

Qualification :

Graduate

Date of Appointment :

28.05.1994

DIN No.:

00062514

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	Company/ LLP Status	Defaulting status
1	U21012DL1985PLC020023	KHANNA PAPER MILLS LIMITED	Managing director	1/4/2012	28/05/1994	Active	NO
2	U74120DL2007PTC162249	SMOOTH BUSINESS SERVICES PRIVATE LIMITED	Director	18/04/2007	18/04/2007	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

Qualification :

Graduate

Date of Appointment :

20.08.1999

DIN No.:

00062737

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	Company/ LLP Status	Defaulting status
1	U21012DL1985PLC020023	KHANNA PAPER MILLS LIMITED	Whole-time director	1/4/2012	20/08/1999	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

Qualification :

Graduate

Date of Appointment :

01.04.1997

DIN No.:

00067173

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	Company/ LLP Status	Defaulting status
1	U21012DL1985PLC020023	KHANNA PAPER MILLS LIMITED	Whole-time director	1/4/2012	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	Director	30/09/2011	5/9/2011	Active	NO

Name :

Mr. Yoginder Paul 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 No.:

01423383

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	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

Name :

Mr. Suneet Kochhar

Designation :

Director

Address :

5B/9 Gali No 1 Dayanand Nagar, Amritsar-143001, Punjab, India

Date of Birth/Age :

18.12.1974

Date of Appointment :

05.09.2011

DIN No.:

01771321

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	Company/ LLP Status	Defaulting status
1	U60231DL2007PLC169280	SHORE TO SHORE LOGISTICS INDIA LIMITED	Whole-time director	5/9/2011	11/10/2007	Active	NO
2	U21012DL1985PLC020023	KHANNA PAPER MILLS LIMITED	Director	30/09/2011	5/9/2011	Active	NO

KEY EXECUTIVES

Name :	Mr. Manav Arora
Designation :	Company Secretary
Address :	348/10 Gali Dhobian, Katra Bhai Sant Singh, Amritsar-143001, Punjab, India
Date of Birth/Age :	13.01.1985
Date of Appointment :	11.08.2011
PAN No.:	AHMPA4455E

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 29.09.2012

Names of Shareholders	No. of Shares
Brijmohan Khanna	9492278
Renu Khanna	4772855
Rahul Khanna	1818052
Brijmohan Khanna HUF	3607945
Saurbh Khanna	1818070
Shivani Khanna	2505000
Navroop Khanna	2505000
Shivinder Sandhu	9820
Manveen Sandhu	3570
Surinder Sandhu	1785
Sahiljit Sandhu	1785
Kiritpal Sandhu	1785
TOTAL	26537945

AS ON 29.09.2012

Equity Share Breakup	Percentage of Holding
Category
Directors or relatives of directors	99.93
Other top fifty shareholders	0.07
TOTAL	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Writing and Printing Paper (WPP), Duplex/Triplex Board, Newsprint (NP) and Trading of Paper and Paper Products.

Products :

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

PRODUCTION STATUS [AS ON 31.03.2011]

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Papers and Duplex Board and Newsprint Paper	MT	330000	330000	--
Actual Production
Paper	MT	--	--	110634.10
Duplex Board	MT	--	--	119786.22
News Print	MT	--	--	102860.28

GENERAL INFORMATION

No. of Employees :

2000 [Approximately]

Bankers :

Punjab National Bank, International Banking Branch, Mall Road, Amritsar-143001, Punjab, India

Facilities :

Secured Loan	As on 31.03.2012 [Rs. in Millions]	As on 31.03.2011 [Rs. in Millions]
Long Term Borrowings
Rupee term loans from banks	1032.820	1662.605
Term loans from others	2.048	0.000
Foreign currency term loans from banks	176.595	305.619
Short Term Borrowings
Working capital loans from banks	5134.941	4192.497
TOTAL	6346.404	6160.721

Banking Relations :	--
Auditors :
Name :	Sharat Sekhri and Company Chartered Accountants
PAN No:	AIPPS2692K
Subsidiaries :	Khanna Paper Inc., United States Shore To Shore Logistics India Limited [U60231DL2007PLC169280]

CAPITAL STRUCTURE

AS ON 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
45000000	Equity Shares	Rs.10/- each	Rs.450.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
26537945	Equity Shares	Rs.10/- each	Rs.265.379 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	265.379	265.379
(b) Reserves & Surplus	2176.980	1914.646
(c) Money received against share warrants	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000
Total Shareholders’ Funds (1) + (2)	2442.359	2180.025
(3) Non-Current Liabilities
(a) long-term borrowings	1226.463	1968.224
(b) Deferred tax liabilities (Net)	801.204	833.719
(c) Other long term liabilities	467.267	595.135
(d) long-term provisions	20.408	15.591
Total Non-current Liabilities (3)	2515.342	3412.669
(4) Current Liabilities
(a) Short term borrowings	5134.941	4192.497
(b) Trade payables	1199.845	1581.905
(c) Other current liabilities	983.481	461.575
(d) Short-term provisions	47.896	72.974
Total Current Liabilities (4)	7366.163	6308.951
TOTAL	12323.864	11901.645
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	4919.582	4994.667
(ii) Intangible Assets	3.075	2.493
(iii) Capital work-in-progress	80.853	158.836
(iv) Intangible assets under development	0.000	0.000
(b) Non-current Investments	5.290	5.490
(c) Deferred tax assets (net)	0.000	0.000
(d) Long-term Loan and Advances	33.177	26.887
(e) Other Non-current assets	0.000	0.000
Total Non-Current Assets	5041.977	5188.373
(2) Current assets
(a) Current investments	0.000	0.000
(b) Inventories	3495.307	3021.277
(c) Trade receivables	2265.968	2474.651
(d) Cash and cash equivalents	592.272	349.043
(e) Short-term loans and advances	904.880	860.897
(f) Other current assets	23.460	7.404
Total Current Assets	7281.887	6713.272
TOTAL	12323.864	11901.645

SOURCES OF FUNDS		31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		265.379
2] Share Application Money		0.000
3] Reserves & Surplus		1801.799
4] (Accumulated Losses)		0.000
NETWORTH		2067.178
LOAN FUNDS
1] Secured Loans		5721.153
2] Unsecured Loans		601.000
TOTAL BORROWING		6322.153
DEFERRED TAX LIABILITIES		746.757
TOTAL		9136.088
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		5002.861
Capital work-in-progress		232.272
INVESTMENT		1.000
DEFERREX TAX ASSETS		0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2251.435
	Sundry Debtors	2067.761
	Cash & Bank Balances	207.424
	Other Current Assets	0.000
	Loans & Advances	641.814
Total Current Assets		5168.434
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1146.704
	Other Current Liabilities	107.369
	Provisions	14.406
Total Current Liabilities		1268.479
Net Current Assets		3899.955
MISCELLANEOUS EXPENSES		0.000
TOTAL		9136.088

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	14007.244	12083.574	8703.082
		Other Income	92.151	314.390	182.442
		TOTAL (A)	14099.395	12397.964	8885.524
Less	EXPENSES
		Cost of materials consumed	7766.578	7654.048
		Purchases of stock-in-trade	2117.542	1441.845
		Employee benefit expense	256.715	204.119
		Other expenses	2767.563	2530.961	8025.495
		Changes in inventories of finished goods, work-in-progress and stock-in-trade	(175.387)	(452.344)
		TOTAL (B)	12733.011	11378.629	8025.495
Less	PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		1366.384	1019.335	860.029
Less	FINANCIAL EXPENSES (D)		722.741	423.326	394.578
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		643.643	596.009	465.451
Less/ Add	DEPRECIATION/ AMORTISATION (F)		349.454	343.786	330.197
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)		294.189	252.223	135.254
Less	TAX (H)		27.610	138.372	63.255
	PROFIT / (LOSS) AFTER TAX (G-H) (I)		266.579	113.851	71.999
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		276.036	162.188	190.189
Less	PROVISION FOR TAX EARLIER YEAR		3.245	0.003	0.000
Less	APPROPRIATIONS
		Transfer to General Reserve	0.000	0.000	100.000
	BALANCE CARRIED TO THE B/S		539.370	276.036	162.188
	EARNINGS IN FOREIGN CURRENCY		922.930	1136.099	725.233
	IMPORTS		4811.696	4556.030	4882.894
	Earnings / (Loss) Per Share (Rs.)		10.05	4.29	2.71

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	1.89	0.92	0.81
Net Profit Margin (PBT/Sales)	(%)	2.10	2.09	1.55
Return on Total Assets (PBT/Total Assets}	(%)	2.40	2.15	1.33
Return on Investment (ROI) (PBT/Networth)		0.12	0.12	0.07
Debt Equity Ratio (Total Debt/Networth)		2.60	2.83	4.03
Current Ratio (Current Asset/Current Liability)		0.99	1.06	4.07

LOCAL AGENCY FURTHER INFORMATION

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	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 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]	PAN of Proprietor/Partner/Director, if available	No
32]	Date of Birth of Proprietor/Partner/Director, if available	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

INDEX OF CHARGES:

S. No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10437521	29/06/2013	400,000,000.00	PUNJAB NATIONAL BANK	INTERNATIONAL BANKING BRANCH, THE MALL, AMRITSAR - 143001, PUNJAB, INDIA	B79907523
2	10437519	26/06/2013	500,000,000.00	PUNJAB NATIONAL BANK	INTERNATIONAL BANKING BRANCH, THE MALL, AMRITSAR - 143001, PUNJAB, INDIA	B79906053
3	10334265	28/12/2011	500,000,000.00	INDIAN OVERSEAS BANK	RANJIT AVENUE, AMRITSAR 143001, PUNJAB, INDIA	B31559263
4	10253812	12/10/2010	100,000,000.00	AXIS BANK LIMITED	29, KENNEDY AVENUE, COURT ROAD, AMRITSAR - 143001, PUNJAB, INDIA	B00079608
5	10217464	06/04/2010	280,000,000.00	AXIS BANK LIMITED	29, KENNEDY AVENUE, COURT ROAD, AMRITSAR - 143001, PUNJAB, INDIA	A83828608
6	10184059	08/10/2009	250,000,000.00	AXIS BANK	29, KENNEDY AVENUE, COURT ROAD, AMRITSAR - 143001, PUNJAB, INDIA	A72285695
7	10185454	23/09/2009	119,700,000.00	CANARA BANK	GOPAL NAGAR, AMRITSAR - 143001, PUNJAB, INDIA	A73170045
8	10120998	09/08/2008	120,000,000.00	AXIS BANK	29, KENNEDY AVENUE, COURT ROAD, AMRITSAR - 143001, PUNJAB, INDIA	A44992410
9	80021936	26/08/2011 *	11,186,500,000.00	ORIENTAL BANK OF COMMERCE	CIVIL LINES BRANCH, QUEENS ROAD, AMRITSAR - 143001, PUNJAB, INDIA	B20986527
* Date of charge modification

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.

Unsecured Loan	As on 31.03.2012 [Rs. in Millions]	As on 31.03.2011 [Rs. in Millions]
Long Term Borrowings
Other loans and advances	15.000	0.000
TOTAL	15.000	0.000

OUTLOOK:

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

FIXED ASSETS:

· Land

· Building

· Plant and Machinery

· Vehicles

· Computers

· Miscellaneous Fixed Assets

NEWS:

NO PLAN TO MOVE OUT OF PUNJAB: KHANNA PAPER MILL

Amritsar, August 17: Leading paper maker Khanna Paper Mills today said it will not move out of Punjab.

“We have been at the receiving end of maligning rumours at various discussion forums that Khanna Paper Mills is shifting to Gujarat.”

“We, at Khanna paper Mills, wish to put it on record for once and all, that Khanna paper Mills does not plan to shut down and move its facility to Gujarat or any other state in the country,” Suneet Kochhar, Director, Khanna Paper Mills in a statement issued here said.

“We are thriving in the state and see no reason to shift to any other state. Even if we expand, our first priority will always be Punjab. We extend our full support to the vision of the Punjab government,” added Kochhar.

The city-based Khanna Paper Mill is country’s first exporter of news print to Pakistan.

Khanna Paper Mill claims to be the fourth largest paper mill in the country.

Last year in the month of June, massive fire broke out at its facility, causing loss to the tune of Rs 2000.000 Millions to the company.

KHANNA PAPER MILLS ON EXPANSION SPREE

Amritsar-based Khanna Paper Mills (KPM), one of the top ten paper manufacturers in India, is on an expansion spree. It plans to set up a unit in Gujarat with an installed capacity of 1,000 tonnes per day at a project cost of Rs 10000.000 Millions, likely to be funded through an IPO and internal accruals.

Currently, with installed capacity of 1,200 tonnes per day, Khanna Paper Mills Limited, which manufactures duplex board, newsprint and writing and printing paper, is the largest single location plant in India using recyclable paper waste in the country. The company has a market share of 11 per cent in copier segment, 20 per cent in writing and printing paper, 48 per cent in packaging and board and 30 per cent share in newsprint.

Further, with a vision to become market leader and also buoyed by the response from the domestic and International market, the company has plans to set up a new unit in Gujarat having installed capacity of 1,000 tonnes per day with an investment of Rs 10000.000 Millions. Besides, the company has also plans to hit the capital market. The proceeds from the issue, internal accruals, term loan would be utilized in funding the expansion plans.

Earlier, speaking to Business Standard, Khanna Paper Mills CMD B M Khanna said, “In order to meet the growing demand of paper in the domestic and international markets, we have plans to set up a unit in Gujarat, with an installed capacity of 1,000 tonnes per day by 2013. As we import waste paper from overseas, this is an ideal location for setting up the new unit, as it will save expenditure incurred on logistics front. The new plant is likely to attract an investment of Rs 10000.000 Millions to be funded through internal accruals, debt and proceeds from the IPO that is in the offing. We are likely to hit the capital market by 2013.”

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 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 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.61.15
UK Pound	1	Rs.97.77
Euro	1	Rs.82.77

INFORMATION DETAILS

Report Prepared by :

TPT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		49

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.