rating for the Bank Loan Facilities of - Brickwork Ratings

Rating Rationale
Brickwork Ratings assigns ‘BWR BB+’ (Pronounced BWR Double B plus)
rating for the Bank Loan Facilities of ` 7.30 Cr for Setting up of a precast
concrete block & pavers manufacturing facilities at Bagodara in the state
of Gujarat of kankaria Properties Pvt Ltd(KPPL).
Brickwork Ratings (BWR) has assigned BWR BB+ (Pronounced BWR Double B plus) rating
for the Bank Loan Facilities of ` 7.30 Cr for Setting up of a precast concrete block & pavers
manufacturing facilities at Bagodara in the state of Gujarat with an annual installed capacity
of 17,28,000 pieces of concrete blocks & 5,50,500 sq.mts of pavers of Kankaria Properties
Pvt Ltd
Facility
Fund Based –
Term Loan
Fund Based –
Working Capital
BWR has principally relied upon the audited financial results up to FY12, projected financials
of FY13 for the concrete block & pavers manufacturing facility of kankaria Properties Pvt Ltd,
publicly available information and information/clarification provided by the Company
management.
Background
Limits
(Rs. Crs)
6.30 Cr
1.00Cr
Tenure Rating
Long
Term
BWR BB+
(Pronounced BWR
Double B plus)
(Outlook-Stable)
Facilities with this
rating are considered
to have moderate
risk of default
regarding timely
servicing of financial
obligations.
Kankaria Properties Private Limited (KPPL) was originally incorporated in the year 2000 in
the name of M/s Santim Water Private Limited to undertake mineral water manufacturing
facilities. To diversify the business and to start new projects in real estate development the
company decided to change its name from M/s Santim Water Pvt Ltd to M/s Brickmann
Builders Pvt Ltd in 2001. To further identify itself with a brand name of its own, the
Company decided to adopt the name of Kankaria Properties Pvt Ltd in 2010 and diversified
its activities to manufacture concrete blocks & pavers, apart from carrying on with the
projects of Brickmann Builders Pvt Ltd. Subsequently, KKPL has decided to restrict itself to
the manufacture of pavers, etc and desist from real estate activities. The company plans to
set up the manufacturing facility for the entire range of precast concrete block & pavers at
Bagodara, in the state of Gujarat, using cutting edge technology from HESS, Germany.
www.brickworkratings.com 1 4 th Dec 2012

Management Profile
Mr. Subhas Chand Kankaria and his sons – Mr. Sandeep Kankaria & Mr. Aditya Kankaria ,
are the company’s directors with ~40 years of experience in Real Estate Business.
Shareholding Pattern
Shareholding Pattern as on 31/03/2012-KPPL
Sr. No. Names of the Shareholder No of shares Percentage of shares
1 Mr. Sandeep Kankaria 7490000 20.41%
2 Mrs. Manisha Kankaria 2700000 7.36%
3 Mr. Subhas Chand Kankaria 10500000 28.61%
4 Mrs. Kanchan kumara
Kankaria
4000000 10.90%
5 Santim Knakaria Benefit Trust 500000 1.36%
6 Vanishka Kankaria Benefit
500000 1.36%
Trust
7 Aditya Kankaria 5000000 13.62%
8 Priyanka Kankaria 2510000 6.84%
9 Subhas Chand Kankaria (HUF) 3500000 9.54%
Total 36700000 100.00
Business Operations
The company proposes to commence the commercial production of concrete pavers from
Dec’12. The Company has procured Land measuring 6656 sq. m2 at Bagodara, Gujarat to set
up the plant. The project implementation is reportedly on schedule. The Company has
availed Bank Loan facilities of Rs. 7.30 Crs from Bank of Baroda.
Project Cost and Means of Finance
The Project Cost of Rs. 10.37 crores was met from the promoter’s contribution of `Rs. 3.66
crores, unsecured loan from promoter of Rs. 0.41 crores and term loans from Banks of `Rs.
6.30 crores.
Cost of Project Total Cost Margin
(%)
Prom.
Contributio
n
www.brickworkratings.com 2 4 th Dec 2012
Bank's
Financ
e
Land & Land Development 0.71 45.00% 0.32 0.39
Factory Building & Other Civil
works
1.39 45.00% 0.63 0.76
Administrative Building 0.03 25% 0.01 0.02
Plant & Machineries 5.04 25% 1.26 3.78
Electric Installation 0.26 25% 0.07 0.20
Utilities 1.25 25% 0.31 0.94
Furniture’s & Fixtures 0.03 25% 0.01 0.02
Vehicles 0.15 25% 0.04 0.11
Office Equipment 0.08 25% 0.02 0.06
Computer & Peripherals 0.02 25% 0.01 0.02
Contingencies @ 3% 0.24 100% 0.24 -
Incidental Expenditure during
construction
0.5 100% 0.50
Preliminary expenses 0.15 100% 0.15

Margin Money for WC 0.51 100% 0.51
Total 10.36 4.07 6.30
Means of Finance Rs. In Crs
Promoter's Contribution & Unsecured Loans from Friends &
Relatives
3.66
Unsecured Loan from Directors, Friends & Relatives 0.41
Term Loan from Bank/Financial Institution 6.3
Total 10.37
Working Capital Requirement 1.71
Cash Credit from Bank 1.00
As informed, the promoters’ contribution has been met in full.
Financial Performance
The Profit after tax from the company’s unit is projected at Rs. 0.70 Crores on the projected
Sales of Rs. 4.98 crores for FY13 with a projected PAT margin of 6.39%. The company’s
projected Tangible Net worth Requirement of Rs. 4.07 Crs of which the promoters have
brought Rs.3.66 Crs as share capital. Balance Rs.0.41 Crs is to be brought as unsecured loan
from promoter & their relatives.
Key Financials
FY11 (A) FY12 (A) FY13 (Est) FY14
(`Crores)
(Proj)
Gross Sales 0.46 0.20 4.98 13.89
Less: Excise Duty 0.54 1.64
Other Operating Income - - - -
Total Operating Income 0.46 0.20 4.44 12.25
Cost of Sales 0.26 0.09 2.91 8.11
Operating Profit before Interest,
Depreciation and Tax
0.07 0.03 1.35 3.55
PAT 0.02 0.02 0.28 1.08
Tangible Net worth 1.36 2.46 4.06 5.17
(Historical data not significant, in view of change of activity)
Rating Outlook
The rating has factored, inter alia, the promoters experience in the manufacturing sector, the
team of professionally equipped individuals. The rating is constrained by intense
competition & change in the line of activities by the management thrice in a span of 12 years.
The ability of the company to meet its sales, profitability and other financial projections for
FY13 and 14 and the government’s policy pertaining to concrete industry in general, shall
remain the key rating sensitivities.
www.brickworkratings.com 3 4 th Dec 2012

Analyst Contact Relationship Contact
1-8
analyst@brickworkratings.com
0-425-2742
bd@brickworkratings.com
Phone Media Contact
1-860-425-2742 media@brickworkratings.com
Disclaimer: Brickwork Ratings (BWR) has assigned the rating based on the information obtained from the issuer and other reliable sources,
which are deemed to be accurate. BWR has taken considerable steps to avoid any data distortion; however, it does not examine the precision
or completeness of the information obtained. And hence, the information in this report is presented “as is” without any express or implied
warranty of any kind. BWR does not make any representation in respect to the truth or accuracy of any such information. The rating assigned
by BWR should be treated as an opinion rather than a recommendation to buy, sell or hold the rated instrument and BWR shall not be liable
for any losses incurred by users from any use of this report or its contents. BWR has the right to change, suspend or withdraw the ratings at
any time for any reasons.
www.brickworkratings.com 4 4 th Dec 2012