MIRA INFORM REPORT

Report Date :

05.08.2014

IDENTIFICATION DETAILS

Name :	THE K C P LIMITED
Registered Office :	No. 2, Dr. P.V. Cherian Crescent Egmore, Chennai – 600008, Tamilnadu
Country :	India
Financials (as on) :	31.03.2014
Date of Incorporation :	03.07.1941
Com. Reg. No.:	18-001128
Capital Investment / Paid-up Capital :	Rs.208.921 Millions
CIN No.: [Company Identification No.]	L65991TN1941PLC001128
TAN No.: [Tax Deduction & Collection Account No.]	CHET00160G
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Subject is engaged into diversified businesses such as Cement, Heavy Engineering, Sugar, Power, Biotech and IT.
No. of Employees :	Not Divulged

RATING & COMMENTS

MIRA’s Rating :

Ba (47)

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

Maximum Credit Limit :	USD 14530000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is an old and established company having satisfactory track record. There is a dip in profit of the company in the year 2013-14. However, overall financial position of the company is decent. Trade relations are reported to be fair. Business is active. Payments are reported to be usually correct. The company can be considered for business dealing 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 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
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

N E W S

As per the latest IMF study, the total weigh of emerging markets in the GDP of the world on a purchasing power parity basis has seen a sizeable shift. It highlights how as against 51 % in 2005, the emerging economies now account for close to 56 % of the global purchasing power GDP as per the latest survey. And with the emerging economies growing at a faster rate than their developed counterparts, there are every possibility that the their share goes up further in the coming years.  China may surpass the US over the next few years.

Politics and economics are very intricately connected. They tend to influence each other in ways that could be very complex and far-reaching. The prospects of the India’s economy have been seriously compromised due to political corruption. High inflation, poor standard of living are to a great extent a result of rampant corruption in the country. China on the other hand, seems to be facing diametrically opposite challenge. American hedge fund manager Jim Chanos has been keenly following the political and economic development in the dragon economy and has figured out something that is quite worrying. He is of the view that the Chinese economy could be heading toward trouble on account of new Chinese President Xi Jingping’s very aggressive anti-corruption drive. Chanos believes tat many things such as apartment sales, luxury products, etc. were largely bought with dirty money. And it is now beginning to impact consumption. This may indeed be bad news for an economy that is struggling to transition from an investment-driven export-oriented economy to a domestic consumption-driven economy.

A study published by Firstpost has revealed that asset classes like real estate and equities were the biggest beneficiaries of the liberalization policies.  A firm called Ciane Analytics studied returns from assets including equities, gold, fixed deposits, G-Secs and real estate since 1991. Real estate outperformed every other asset classes during the 23-year period with an annualized return of 20 % ! Equities came in second with annualized return of 15.5 % ! However, while these returns may seem mouthwatering, the fact is that the return from equities adjusted for inflation came down to just 7.1 %.

Some brief news are as under

. R-Power to buy Jaypee’s hydro assets

. Investors await justice in NSEL case

. India seeks MFN status from Pakistan ahead of meeting

. Ukrain’s clashes with rebels hinder MH17 crash investigation

. India exploring merger of state-owned hydro PSUs

..Higher costs weigh down profit growth to slowest in 9 quarters

..Wal-Mart to expand wholesale business in India

. GMR group moves to strengthen balance sheet

. Central Bank to sell 4 % stake to Life Insurance Corporation

. Tata Chemicals plans to raise up to Rs 10000 mn.

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	BBB+ (Long Term Rating)
Rating Explanation	Moderate degree of safety and moderate credit risk.
Date	May 22, 2014

Rating Agency Name	CRISIL
Rating	A2 (Long Term Rating)
Rating Explanation	Strong degree of safety and low credit risk.
Date	May 22, 2014

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 31-03-2014.

INFORMATION DENIED

Management Non Co-Operative (91-44-66772600)

LOCATIONS

Registered Office/ Corporate Office :	No. 2, Dr. P.V. Cherian Crescent Egmore, Chennai – 600008, Tamilnadu, India
Tel. No.:	91-44-66772600
Fax No.:	91-44-66772620
E-Mail :	investor@kcp.co.in
Website :	www.kcp.co.in
Factory :	Cement Plant (Macherla) Macherla, Guntur District - 522426, Andhra Pradesh, India Phone : 91-8642-222303 - 05 Fax : 91-8642-222350 E-Mail : gm.macherla@kcp.co.in Cement Plant (Muktyala) Ramakrishnapuram, Muktyala, Jaggayyapeta Mandal, Krishna District - 521457, Andhra Pradesh, India Phone:91-8654-296006-8 Fax : 91-8654-296009 E-Mail : rkpuram@kcp.co.in Hydel Power B. No. AE-2, N.S.P. Colony, Nekarikallu, Guntur District - 522615, Andhra Pradesh, India Phone:91 8647 241269 E-Mail : hydel@kcp.co.in Heavy Engineering Plant I 8, Basin Road, Tiruvottiyur, Chennai - 600019, Tamilnadu, India Phone:91-44-66772800 Fax : 91-44-66772802 E-Mail: engineering@kcp.co.in Heavy Engineering Plant II Mosur Road, Ekhunagar, Arakkonam - 631004, Tamilnadu, India Phone:91-4177-230313 E-Mail : arakkonam@kcp.co.in Wind Power Uthumalai Village, Tirunelveli District, Tamilnadu, India Biotech Plot No.14, A.K. Park, Genome Valley, Turkapally (village) – 500078, Shameerpet (Mandal), R. R.District, Andhra Pradesh, India

DIRECTORS

As on: 31.03.2014

Name :	Mr. Dr. V.L. Dutt
Designation :	Chairman and Managing Director
Date of Birth/Age :	27.12.1937
Qualification :	Grad. B.I.M.
Experience :	55 Years
Name :	V.L. Indira Dutt
Designation :	Joint Managing Director
Date of Birth/Age :	14.09.1940
Qualification :	B.A.
Experience :	19 Years
Name :	Kavitha Dutt Chitturi
Designation :	Executive Director
Date of Birth/Age :	17.05.1971
Qualification :	Grad. In Business Management, PGDHR
Experience :	16 Years
Name :	Mr. V. Gandhi
Designation :	Technical Director
Date of Birth/Age :	04.03.1949
Qualification :	B.E. (MET)
Experience :	36 Years
Name :	Mr. O. Swaminatha Reddy
Designation :	Independent Director
Date of Birth/Age :	25.12.1930
Qualification :	B.Com (Hons)., ACA
Date of Appointment :	14.03.1991
Name :	Mr. V.H. Ramakrishnan
Designation :	Independent Director
Name :	Mr. Vijay Sankar
Designation :	Independent Director
Date of Birth/Age :	26.12.1972
Qualification :	M.B.A., ACA
Date of Appointment :	07.11.2011
Name :	Mr. P.S. Kumar
Designation :	Independent Director
Name :	Mr. M. Narasimhappa
Designation :	Independent Director

KEY EXECUTIVES

Name :	M.R. Ramachandran
Designation :	Chief Financial Officer
Name :	Y. Vijaya Kumar
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 31.03.2014

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	11974748	9.29
Bodies Corporate	48813026	37.86
Sub Total	60787774	47.15
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	239050	0.19
Sub Total	239050	0.19
Total shareholding of Promoter and Promoter Group (A)	61026824	47.34
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	14782771	11.47
Financial Institutions / Banks	6240	0.00
Insurance Companies	1302930	1.01
Sub Total	16091941	12.48
(2) Non-Institutions
Bodies Corporate	4933215	3.83
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	26944016	20.90
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	16908804	13.12
Any Others (Specify)	3016360	2.34
Clearing Members	723769	0.56
NRIs/OCBs	2226030	1.73
Trusts	66561	0.05
Sub Total	51802395	40.18
Total Public shareholding (B)	67894336	52.66
Total (A)+(B)	128921160	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	128921160	0.00

BUSINESS DETAILS

Line of Business :

Subject is engaged into diversified businesses such as Cement, Heavy Engineering, Sugar, Power, Biotech and IT.

GENERAL INFORMATION

No. of Employees :

Manufacturer of Cement, Cement Machinery, Sugar Machinery etc.

Bankers :

· Bank of Baroda

· Bank of India

· Canara Bank

· Hdfc Bank Limited

· Indian Overseas Bank

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2014	As on 31.03.2013
LONG TERM BORROWINGS
Rupee loan from banks - Cement Plant Muktyala	825.030	1048.485
Rupee loan from banks - Hotel Project	344.882	169.634
Rupee loan from banks - Cement Plant- Macherla	128.133	138.928
Rupee loan from banks - Captive Power Plant- Muktyala	579.031	127.650
Foreign currency loan from banks –Cement plant	0.000	108.989
Rupee loan from banks – Corporate	680.000	0.000
SHORT TERM BORROWINGS
Cash credit from Banks	611.751	908.869
Total	3168.827	2502.555

Notes:

· Term loans from banks for Cement plant at Muktyala are Secured by Paripassu First Charge on the Fixed Assets, paripassu Second charge on the current assets and charge on the leasehold rights of the leased Lands of the Muktyala Cement Division. The rate of interest of the above said loan ranges between Base Rate plus margin 2%to 3%

· The long Terms loans obtained for Cement Plant at Muktyala are repayable in 28 Quarterly Installments of Rs. 72.600 Millions each with effect from 30th June 2011.

· Term loan obtained for Hotel project at Hyderabad is secured by First charge on the land, building and other assets of the company at Somajiguda Hyderabad. The rate of interest of the above said loan is Base Rate plus margin 2%.

· The long term loan obtained for Hotel project is repayable in 28 quarterely instalments of Rs. 16.100 Millions with last instalment being Rs. 15.300 Millions with holiday period of 39 months which includes construction period of 15 months and 24 months of gestation period.

· Additional Term loan of Rs.147.300 Millions obtained for Hotel Project is repayable in 28 quarterly instalments of Rs.5.300 Millions after holiday period of 18 months. First instalment of both the loans for Hotel Project falls due in June 2015.

· Term Loan obtained for the Captive Power Plant Muktyala is secured by the First Charge on the fixed Assets of the Captive Power Plant Muktyala. The rate of interest of the above said loan is Base Rate plus margin 1.75%

· The long Term loans obtained Captive Power Plant Muktyala are repayable in 32 Quarterly Instalments of Rs 24.900 Millions with the last instalment being Rs 24.500 Millions each with an initial moratorium period of two years from the date of first disbursement. First instalment falls due on March’ 2015.

· Term Loan obtained for the Cement Plant Macherla is secured by the First Charge on the fixed Assets (both present and proposed out of the loan) and second charge on the current assets of the Cement Division at Macherla. The rate of interest of the above said loan is Base Rate plus margin 2%.

· The long Term loans obtained for Cement Plant at Macherla are repayable in 28 Quarterly Installments of Rs 7.500 Millions each with an initial moratorium peroid of two years from the date of first disbursement. First instalment falls due in December 2014.

· Term Loan of Rs.120.000 Millions obtained for working capital and business operations is secured by Equitable Mortgage on properties at Visakhapatnam, Mumbai and Hyderabad. The rate of interest of this loan is Base Rate plus margin 2%.

· This loan is repayable in 4 equal half yearly instalments of Rs. 30.000 Millions after 1 year moratorium.

· Term Loan of Rs.560.000 Millions obtained for shoring up working capital is secured by Exclusive charge on land near Chennai. The rate of interest of the above said loan is Base Rate plus margin 2%.

· This loan is repayable in 20 quarterly instalments of Rs. 28.000 Millions after 2 years moratorium.

Banking Relations :	--
Auditors :
Name :	Brahmayya and Company Chartered Accountants
Address :	Vijayawada, Andhra Pradesh, India
Cost Auditors 1 :
Name :	Narasimhamurthy and Company Cost Accountants
Address :	Hyderabad, Telangana, India
Cost Auditors 2 :
Name :	S. Mahadevan and Company Cost Accountants
Address :	Chennai, Tamilnadu, India
Internal Auditors :	· R.G.N Price and Company Chennai, Tamilnadu, India · M. Bhaskara Rao and Company Hyderabad, Telangana, India
Subsidiary Company :	KCP Vietnam Industries Limited
Joint Venture Company :	Fives Cail KCP Limited
Companies/Trusts controlled by Key Management Personnel/Relatives :	· KCP Technologies Limited · V. Ramakrishna Sons Private Limited · The Jeypore Sugar Company Limited · VRK Grandsons Investment (Private) Limited · V. Ramakrishna Charitable Trust · A Trust in the name of Bala Tripurasundari · Ammavaru

CAPITAL STRUCTURE

As on: 31.03.2014

Authorised Capital :

No. of Shares	Type	Value	Amount
350000000	Equity Shares	Rs.1/- each	Rs.350.000 Millions
20000000	12% Redeemable cumulative Non-convertible Preference shares	Rs.10/- each	Rs.200.000 Millions
	Total		Rs.550.000 Millions

Issued Capital :

No. of Shares	Type	Value	Amount
128977480	Equity Shares	Rs.1/- each	Rs.128.977 Millions
20000000	12% Redeemable cumulative Non-convertible Preference shares	Rs.10/- each	Rs.200.000 Millions
	Total		Rs.328.977 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
128921160	Equity Shares	Rs.1/- each	Rs.128.921 Millions
8000000	12% Redeemable cumulative Non-convertible Preference shares	Rs.10/- each	Rs.80.000 Millions
	Total		Rs.208.921 Millions

1) Details of shareholders holding more than 5% share in the company:

1. M/s. V. Ramakrishna Sons Private Limited - 3,89,56,326 (3,88,96,326) equity shares of 1/- each fully paid - 30.22%(30.17%)

2. M/s. V.R.K. Grandsons Investments Private Limited - 95,78,330 (95,78,330) equity shares of 1/- each fully paid- 7.43% (7.43%)

3. SBI Emerging Business Fund 84,38,792 (83,45,318) equity shares of 1each fully paid up - 6.55% (6.47%)

4. M/s. Tata Capital Financial Services Limited - 80,00,000 (1,50,00,000) Preference shares of Rs. 10/- each fully paid - 100%(100%).

2) The reconciliation of the Opening and Closing balance of the Subscribed and Paid-up equity & Preference shares of the company is set out below:

Particulars	31.03.2014
	Rs. In Millions
Equity Share Capital at the beginning of the Year	128.921
12% Redeemable cumulative Non-convertible Preference shares at the beginning of the year	150.000
Less: 70,00,000 12% Redeemable cumulative Non-convertible Preference shares of Rs 10 each redeemed during the year (50,00,000 shares in previous year)	(70.000)
Issued Subscribed and Fully paid up capital at the end of the year	208.921

3) Preference Shares are redeemable within a period of five years but after the expiry of two years of the completion date (i.e., share allotment date - 09/12/2009) in the following manner:

(i) In the third year Rs.50.000 Millions

(ii) In the fourth year Rs.70.000 Millions

(iii) In the fifth year Rs.80.000 Millions

During the year the company has redeemed 70,00,000 12% Redeemable Cumulative, Non Convertible of Rs.10 each along with prorata interim dividend.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2014	31.03.2013	31.03.2012
I.              EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	208.921	278.921	328.921
(b) Reserves & Surplus	3424.950	3445.826	3316.842
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	3633.871	3724.747	3645.763
(3) Non-Current Liabilities
(a) long-term borrowings	3125.185	1948.195	1762.658
(b) Trade Payables	4.526	2.607	3.329
(c) Deferred tax liabilities (Net)	576.348	575.854	489.251
(d) Other long term liabilities	316.418	314.415	191.412
(e) long-term provisions	39.694	36.467	26.122
Total Non-current Liabilities (3)	4062.171	2877.538	2472.772
(4) Current Liabilities
(a) Short term borrowings	890.251	1186.869	824.420
(b) Trade payables	570.361	540.187	371.711
(c) Other current liabilities	1149.662	1322.156	1500.645
(d) Short-term provisions	32.244	183.980	318.888
Total Current Liabilities (4)	2642.518	3233.192	3015.664
TOTAL	10338.560	9835.477	9134.199
II.          ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	5138.937	5066.363	5209.909
(ii) Intangible Assets	2.389	0.000	0.000
(iii) Capital work-in-progress	1503.936	997.488	227.525
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	288.981	288.981	288.960
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	506.189	543.712	141.793
(e) Trade Receivables	15.392	11.714	11.247
(e) Other Non-current assets	8.257	4.506	0.000
Total Non-Current Assets	7464.081	6912.764	5879.434
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	1235.272	1183.566	1483.955
(c) Trade receivables	451.830	482.099	743.756
(d) Cash and cash equivalents	196.036	525.818	350.405
(e) Short-term loans and advances	915.594	651.688	643.278
(f) Other current assets	75.747	79.542	33.371
Total Current Assets	2874.479	2922.713	3254.765
TOTAL	10338.560	9835.477	9134.199

PROFIT & LOSS ACCOUNT

	PARTICULARS	31.03.2014	31.03.2013	31.03.2012
	SALES
	Income	6221.898	6997.054	6004.769
	Other Income	346.598	776.338	392.900
	TOTAL (A)	6568.496	7773.392	6397.669
Less	EXPENSES
	Cost of Materials Consumed	1326.489	1520.814	1313.610
	Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	144.381	(5.075)	(111.165)
	Employees benefits expense	524.954	512.547	525.937
	Other expenses	3772.379	4560.850	3148.516
	Extraordinary Items	0.000	49.319	0.000
	TOTAL (B)	5768.203	6638.455	4876.898
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (C)	800.293	1134.937	1520.771
Less	FINANCIAL EXPENSES (D)	447.342	381.234	379.498
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)	352.951	753.703	1141.273
Less/ Add	DEPRECIATION/ AMORTISATION (F)	340.920	319.761	293.470
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)	12.031	433.942	847.803
Less	TAX (I)	(0.733)	129.388	232.469
	PROFIT/ (LOSS) AFTER TAX (G-I) (J)	12.764	304.554	615.334
	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD	537.400	523.400	410.800
	APPROPRIATIONS
	Transfer to Preference Capital Redemption Reserve	80.000	70.000	50.000
	Transfer to General Reserve	0.000	45.000	200.000
	Proposed Dividend -Preference Shares	3.000	5.500	24.000
	Proposed Final Dividend – Equity Shares	12.900	64.500	32.200
	Proposed Special Dividend – Equity Shares	0.000	0.000	64.500
	Interim Dividends Paid –Equity Shares	0.000	64.500	96.700
	Interim Dividends Paid –Preference Shares	12.400	16.600	0.000
	Tax on Distributed Profits – Equity shares	2.200	20.900	31.400
	Tax on Distributed Profits – Preference shares	3.100	3.600	3.900
	BALANCE CARRIED TO THE B/S	436.500	537.400	523.400
	EARNINGS IN FOREIGN CURRENCY
	F.O.B value of goods exported during the year	313.322	114.030	49.220
	Income from Service charge	0.722	1.512	0.000
	Income from Investments held in Foreign Companies	150.444	438.952	284.142
	TOTAL EARNINGS	464.488	554.494	333.362
	IMPORTS
	Raw Materials and Stock-in-Trade	3.053	13.725	12.270
	Components, Spares parts and Consumables	884.356	745.099	689.130
	Tools	0.590	0.044	0.235
	Capital Goods	8.560	17.590	8.304
	TOTAL IMPORTS	896.559	776.458	709.939
	Earnings / (Loss) Per Share (Rs.)	0.09	2.16	4.56

KEY RATIOS

PARTICULARS		31.03.2014	31.03.2013	31.03.2012
PAT / Total Income	(%)	0.19	3.92	9.62
Net Profit Margin (PBT/Sales)	(%)	0.19	6.20	14.12
Return on Total Assets (PBT/Total Assets}	(%)	0.14	5.08	9.85
Return on Investment (ROI) (PBT/Networth)		0.00	0.12	0.23
Debt Equity Ratio (Total Debt/Networth)		1.11	0.84	0.71
Current Ratio (Current Asset/Current Liability)		1.09	0.90	1.08

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	328.921	278.921	208.921
Reserves & Surplus	3316.842	3445.826	3424.950
Net worth	3645.763	3724.747	3633.871
long-term borrowings	1762.658	1948.195	3125.185
Short term borrowings	824.420	1186.869	890.251
Total borrowings	2587.078	3135.064	4015.436
Debt/Equity ratio	0.710	0.842	1.105

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	6004.769	6997.054	6221.898
		16.525	(11.078)

NET PROFIT MARGIN

Net Profit Margin	31.03.2012	31.03.2013	31.03.2014
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	6004.769	6997.054	6221.898
Profit	615.334	304.554	12.764
	10.25%	4.35%	0.21%

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	No
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]	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 LOAN

(Rs. In Millions)

Particular	As on 31.03.2014	As on 31.03.2013
LONG TERM BORROWINGS
From Directors	3.153	0.350
From Others	564.956	354.159
SHORT TERM BORROWINGS
Loan Repayable on Demand :from Directors	217.000	204.000
Inter-corporate Deposits repayable on demand	61.500	74.000
Total	846.609	632.509

YEAR IN RETROSPECT:

Cement

The cement despatches and the average price realization were lower than the previous year, but economy in power cost and in the cost of logistics and transportation and market distribution resulted in the company’s operations for the year being considerably better than in the corresponding year.

Production also was significantly lower than the previous year.

The various incentives also contributed to the improvement in the operations though the realization of the same have not yet materialized.

Wide disparity witnessed in the price of cement across the geographical segments of India resulted in highly skewed profitability.

Export of cement to nearby countries commenced in a modest way.

Engineering:

The slowdown of the global economy and the sluggishness of the Indian economy resulted in the significant impact in the year. The company had to resort to taking up low contributory sales for better utilization of the capacity Power:

Power:

All the present captive power units reported gratifying results thanks to a good monsoon and a reasonable wind pattern last year.

The company erected and commissioned a Solar Power Plant of 1.15MW at Muktyala for its captive use.

MANAGEMENT DISCUSSION AND ANALYSIS

Overall company Performance:

The overall operations of the company were deeply affected by the following factors which cumulatively impacted the profitability:

The stagnant status of the demand for cement especially in the South coupled with steep oversupply in the region resulted in pulling the prices of cement even below the cost rendering the whole operations unprofitable.

The widely prevailing gloom in the economy both in the country and throughout the world resulted in the Engineering Division’s marginal loss.

Notwithstanding the above negativity, the following redeeming factors were however witnessed.

Power Division however reflected a highly rewarding and profitable operation with all segments like Hydel, Waste Heat Recovery and Wind Power performing creditably. The small Solar plant commissioned during the year also contributed its mite in making the Power Division’s operations satisfying.

Dividend from the subsidiary was also beneficial in company achieving a break even in its overall operations.

Overview:

Indian cement industry has a pride of place, being the second largest cement producer in the world. It has made rapid strides not only in terms of capacity addition but also in producing world-class quality cement from state-of-theart technology. Indian cement industry today accounts for about 7 per cent of the global production.

Cement, being a bulk commodity, is a freight intensive industry and transporting it over long distances can prove to be uneconomical. This has resulted in cement being largely a regional play with the industry divided into five main regions viz. north, south, west, east and the central region. The Southern region of India has the highest installed capacity, accounting for about one-third of the country’s total installed cement capacity. Among the Southern States, Andhra Pradesh where both the cement units of the company are situated, accounted for a significant share of the enhanced capacity with a negative growth in demand. This directly impacted the profitability of the local cement players.

Outlook:

In the midst of the consolidation taking place, the outlook for the commodity would be influenced by the following factors:

The demand-supply situation is highly skewed with the latter being significantly higher

High capital costs and long gestation periods. Access to limestone reserves (key input) also acts as a significant entry barrier.

Intense competition with players expanding reach and achieving pan India presence. The industry is a lot more consolidated than a couple of decades ago with a few large players controlling substantial market share.

Cement, in spite of being classified as a commodity is simultaneously witnessing few brands commanding a premium on account of better quality perception.

The company is fully aware of the challenges and is making all efforts to give out a better product with distinctly featured properties. Export is an area that is being addressed in order to fill in the capacity even though it hardly gives any contribution.

HYDEL POWER UNIT:

Operational Performance

The Macherla cement plant has an assured supply of power from Hydel and Waste Heat Recovery plant while the new cement plant is presently dependent on power from the grid. This power inadequacy is being addressed by the Captive Power Plant which is presently being implemented.

This division reported gratifying results thanks to a bountiful monsoon which enabled a good power generation during the period.

Overview:

It is a technology with enormous potential, which could exploit the water resources to supply energy to remote rural areas with little access to conventional energy sources. The ecological impact of small-scale hydro is almost nil.

WASTE HEAT RECOVERY UNIT

Overview:

The world is in an energy crisis, which is only going to get worse. With the increase in fuel and electricity costs, the cement industry is presented with both a problem and an opportunity. The cement industry uses huge amounts of fuel and electrical power, and is critically sensitive to price rises in both. The industry worldwide is also vulnerable to power-cuts and reduction in power quality.

There are good medium-term and long-term prospects for WHR systems in the cement industry. Electricity is becoming more expensive, CO2-emission regulations are becoming more stringent and technologies for utilizing waste heat – also that from modern kiln plants – are becoming better and more reliable.

WIND POWER GENERATING UNIT:

Overview:

Wind power is the conversion of wind energy into a useful form of energy, by using windmills for generating mechanical power.

Wind power is capital intensive, but has no fuel costs The price of wind power is therefore much more stable than the volatile prices of fossil fuel sources. Compared to the environmental impact of traditional energy sources, the environmental impact of wind power is relatively minor in terms of pollution. Wind power consumes no fuel, and emits no air pollution, unlike fossil fuel power sources.

ENGINEERING DIVISION

Overview:

The engineering sector is the largest segment of the overall Indian industrial sector. India has a strong engineering and capital goods base. The engineering industry has shown capacity to manufacture large-size plants and equipment for various sectors like power, fertilizer and cement. The performance of the engineering sector is linked to the performance of the end user industries for this sector. Many factors contribute to growth of engineering sector in India.

Outlook:

From a policy perspective there has been a growing consensus that a private-public partnership is required to remove difficulties concerning the development of infrastructure in the country. The realisation finally seems to be setting in with numerous BOT (build, operate and transfer) projects being awarded to various private sector companies. This makes the future of the Indian engineering and construction sector promising.

The next couple of years may remain challenging for the engineering and construction companies. While execution pace is slowing down due to various internal as well as macro issues, margins have also come under pressure due to rising input cost and competition. Thus, unless the macro-environment improves overall growth will continue to remain sluggish in the near term.

Emerging trends such as outsourcing of engineering services can provide new opportunities for quantum growth. Engineering and design services such as new product designing, product improvement, maintenance and designing manufacturing systems are increasingly getting outsourced to countries like India. India’s engineering sector has a significant potential for future growth, both in manufacturing as well as services.

CONTINGENT LIABILITIES

(Rs. In Millions)

Particulars	31.03.2014	31.03.2013
A. Claims against the Company / Disputed liabilities not acknowledged
a) In respect of Statutory levies	345.664	120.560
b) In respect of Contractual levies	136.328	129.710
c) In respect of others	38.470	48.670
B. Guarantees
a) Guarantees to Banks and Financial Institutions	0.000	41.333
b) Performance Bank Guarantees	33.205	34.643

INDEX OF CHARGES

S.No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10485926	03/03/2014	927,300,000.00	BANK OF INDIA	CHENNAI CORPORATE BANKING BRANCH,, IV FLOOR,TARAP  ORE TOWERS,826 ANNA SALAI, CHENNAI, TAMIL NADU - 6  00002, INDIA	C00850669
2	10496642	10/12/2013	120,000,000.00	HDFC BANK LIMITED	HDFC BANK HOUSE,SENAPATI BAPAT MARG, LOWER PAREL  W, MUMBAI, MAHARASHTRA - 400013, INDIA	C05150800
3	10361846	07/06/2012	210,000,000.00	BANK OF BARODA	MOUNT ROAD BRANCH,, NO.1, CLUB HOUSE ROAD, ANNA S  ALAI,, CHENNAI, TAMIL NADU - 600002, INDIA	B42131730
4	10317042	11/03/2014 *	59,730,000.00	Indian Overseas Bank	MID CORPORATE BRANCH, 581, NAVINS PLAZA,TEYNAMPET  , CHENNAI, TAMIL NADU - 600006, INDIA	C05200605
5	10274627	06/01/2014 *	234,500,000.00	Bank of Baroda	MOUNT ROAD BRANCH,, NO.1, CLUB HOUSE ROAD, ANNA S  ALAI,, CHENNAI, TAMIL NADU - 600002, INDIA	B93400497
6	10266770	13/09/2012 *	231,500,000.00	BANK OF INDIA	CHENNAI CORPORATE BANKING BRANCH,, IV FLOOR,TARAP  ORE TOWERS,826 ANNA SALAI, CHENNAI, TAMIL NADU - 6  00002, INDIA	B59754952
7	10263257	03/07/2013 *	796,400,000.00	CANARA BANK	MOUNT ROAD BRANCH, 781-785, ANNA SALAI,, CHENNAI,  TAMIL NADU - 600002, INDIA	B78874229
8	10213229	04/12/2013 *	310,000,000.00	Bank of Baroda	MOUNT ROAD BRANCH, NO.1, CLUB HOUSE ROAD, ANNA SA  LAI, CHENNAI, TAMIL NADU - 600002, INDIA	B90718933
9	10164033	02/06/2009	480,000,000.00	CANARA BANK	MOUNT ROAD BRANCH, 781-785, ANNA SALAI, CHENNAI,  TAMIL NADU - 600002, INDIA	A64531346
10	10152973	11/08/2011 *	650,000,000.00	BANK OF BARODA	MOUNT ROAD BRANCH, NO.1, CLUB HOUSE ROAD,, CHENNA  I, TAMIL NADU - 600002, INDIA	B20353157

* Date of charge modification

FIXED ASSETS

Tangible Assets

· Lands

· Buildings

· Plant and Machinery

· Tramways and Railway Sidings

· Furniture, Fixtures

· Office Equipment

· Vehicles and Earth Moving

· Research and Development

Intangible Assets

· Patents

· Software

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 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.61.02
UK Pound	1	Rs.102.69
Euro	1	Rs.81.91

INFORMATION DETAILS

Information Gathered by :	GYT
Analysis Done by :	SUM
Report Prepared by :	VRN

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	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	6
--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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		47

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.