MIRA INFORM REPORT

Report Date :

19^th June, 2006.

IDENTIFICATION DETAILS

Name :	L & T CASE EQUIPMENT PRIVATE LIMITED
Registered Office :	L & T House, Ballard Estate, Mumbai – 400 001, Maharashtra, India
Country:	India
Financials (as on):	31.03.2005
Date of Incorporation :	20.11.1998
Com. Reg. No.:	11-117183
IEC No.	--
Legal Form :	It is a Private Limited Liability Company.
Line of Business :	Manufacturer of Earthmoving Machinery.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 900000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a joint venture of Larsen & Toubro Limited, Mumbai and Case Marutius US Limited. Available information indicates high financial responsibility of the company. Financial position is satisfactory. Payments are correct and as per commitments. The company can be considered good for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	L & T House, Ballard Estate, Mumbai – 400 001, Maharashtra, India
Tel. No.:	91-22-22685656
Fax No.:	91-22-22685858
Location :	Leased
Factory :	Pithampur Works, Plot No. 157, Industrial Area, Sector III, Pithampur, District Dhar, Madhya Pradesh, India
Tel. No.:	91–7292–256302/8
Fax No.:	91–7292–256301
Location :	Owned

DIRECTORS

Name	Mr. Jagdish Pandurang Nayak
Designation	Director
Date of Birth	13^th November, 1943
Date of Appointment	28^th September, 1999
Address	Mumbai-400026, Maharashtra, India
Name	Mr. Bharat Garg (Foreign)
Designation	Director
Date of Appointment	28^th September, 1999
Date of Birth	27^th August, 1949
Address	New Delhi, India
Name	Mr. Narayan V. Bhat
Designation	Director
Date of Birth	21^st March, 1940
Date of Appointment	12^th April, 2000
Address	Bangalore, Karnataka, India
Name	Mr. Krishnamoorthy S. Manjeri
Designation	Director
Date of Appointment	5^th May, 2001
Date of Birth	15^th August, 1946
Address	Chembur, Mumbai, Maharashtra, India
Name	Mr. Russell L. George (Foreign)
Designation	Director
Date of Birth	29^th April, 1953
Date of Appointment	18^th December, 2002
Address	Italy
Name	Mr. Biagio Cisotto (Foreign)
Designation	Director
Date of Birth	11^th March, 1943
Date of Appointment	28^th March, 2003
Address	Italy
Name	Mr. Amit K. Vyas
Designation	Director
Date of Birth	15^th November, 1967
Date of Appointment	23^rd April, 2003
Address	Mahalaxmi, Mumbai, Maharashtra, India
Name	Mr. Antonio Aurucci
Designation	Director
Name	Mr. S. Raghavan
Designation	Director
Name	Mr. J. P. Nayak
Designation	Director

KEY EXECUTIVES

Name :	Mr. Prasannakumar Seetharam
Designation :	Manager
Address :	Indore, Madhya Pradesh, India
Date of Birth/Age :	11^th November, 1944
Date of Appointment :	8^th December, 2001
Name :	Mr. D. K. Narang
Designation :	Chief Executive

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
Larsen and Turbo Limited	9005000
Case LLC, U.S.A.	9005000

BUSINESS DETAILS

Line of Business :

Manufacturer of Earthmoving Machinery.

Products :

Item Code No.	3515
Product Description	Earth moving equipment comprising Backhoe Loaders and Vibratory Compactors

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Earth moving machinery including Backhoe Loaders, Wheel Loaders, Compacting Machinery, Bulldozers, Angle-Dozers, Pile Excavators and Pile Drivers	Nos.	2,700 (2,700)	1,000 (1,000)	709 (696)

GENERAL INFORMATION

Suppliers :

· Chadha Industries Private Limited

· Hariom Precision Alloys (Private) Limited

· M. P. Engineering and Machine Tools

· Munchur Industries (Private) Limited

· Perfect Iron Private Limited

· Powerline Corporation

· Rapa Relays (Private) Limited

· Spepp Engineering Works

· Synchron Systems

· United Metals (India)

No. of Employees :

Around 250

Bankers :

Bank of Baroda

Siyaganj, Indore, Madhya Pradesh, India

Facilities :

(Figures are in Rupees Millions)

	31.03.2005	31.03.2004
Secured Loans:
From Banks
Term Loan	120.814	93.314
Cash Credit	248.890	179.398
From Others	2.996	2.166
Interest Accrued and Due	--	--
Unsecured Loans
Inter corporate Deposit	100.000	50.000

Bank Guarantees – Rs. 28.065 millions (Rs. 23.882 millions).

During the year ended 31^st March, 2002 the company purchased a ‘Laser Cutting Machine’ under the ‘Export Promotion Capital Goods Scheme’. As per the terms of license granted under the scheme, the company has undertake to achieve an export commitment of USD 1992055 over a period of 8 years. In the event the company is unable to execute its export obligations the company shall be liable to pay customs duty of Rs. 8.949 and interest on the same at the rate of 24% compounded annually.

During the year the company has taken over the marketing function of its products with effect from 1^st July 2004 from Larsen and Toubro Limited, sole selling agent of the company till that date. Hence, expenses for the current year under various heads includes expenses relating to marketing and selling activities. According, the same are not compared with previous year. The takeover of the marketing function, all current assets and current liabilities pertaining the marketing operations have been taken over from Larsen and Toubro Limited at a net sum of Rs. 4.145 for handling the sales of the company’s products.

Secured Loans

Terms loans from banks are secured by hypothecation of the plant and machinery and equitable mortgage of factory land and building.

Cash credit facilities with banks are secured by hypothecation of inventories and book debts.

Leases

The company acquired motor vehicles/ computers under lease from a finance company. Future minimum lease payments under this finance lease as of 31^st March, 2005 are as follows.

	Due within 1 year	Due between 1 to 5 years	Total amount due
Minimum lease payments	1.024	2.992	4.016
Less: amount representing interest	0.395	0.625	1.020
Present value of minimum lease	0.628	2.367	2.995

Banking Relations :	Good
Auditors :	Deloitte Haskins and Sells Chartered Accountants 5^th Floor, Dr. Gopal Das Bhavan, 28, Barakhamba Road, New Delhi 110001, India
Tel. No.:	91-11-23356902
Associates :	v L & T Komatsu Limited v L & T – Equipment Leasing Company Limited v L & T – Finance Limited v Case Corporation, USA v L & T – Infotech Limited v New Holland Italia SpA, Italy v New Holland Tractors Limited v New Holland UK Limited v JI Case Do Brasil and CIA v L & T Limited v Case LLC, U.S.A.

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
30,000,000	Equity Shares	Rs. 10/-	Rs. 300.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
24,010,000	Equity Shares	Rs. 10/-	Rs. 240.100 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2005	31.03.2004	31.03.2003
SHAREHOLDERS FUNDS
1] Share Capital	240.100	180.100	180.100
2] Reserves & Surplus	0.000	26.101	46.200
3] Profit and Loss Account	(12.734)	0.000	0.000
NETWORTH	227.366	206.201	226.300
LOAN FUNDS
1] Secured Loans	372.700	274.878	340.182
2] Unsecured Loans	100.000	50.000	50.000
TOTAL BORROWING	472.700	324.878	390.182
DEFERRED TAX LIABILITIES	1.324	23.883	37.283
TOTAL	701.390	554.962	653.765
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]	291.832	227.585	245.822
Capital work-in-progress	0.137	1.077	0.676
CURRENT ASSETS, LOANS & ADVANCES
Inventories	268.854	240.879	318.373
Sundry Debtors	419.276	281.160	339.172
Cash & Bank Balances	43.420	8.847	6.425
Loans & Advances	40.012	30.666	25.500
Total Current Assets	771.562	561.552	689.470
Less : CURRENT LIABILITIES & PROVISIONS
Current Liabilities & Provisions	371.648	249.547	301.202
Total Current Liabilities	371.648	249.547	301.202
Net Current Assets	399.914	312.005	388.268
MISCELLANEOUS EXPENSES	9.507	14.295	18.999
TOTAL	701.390	554.962	653.765

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2005	31.03.2004	31.03.2003
Sales Turnover [including other income]	1230.235	1132.706	1121.190
Profit/(Loss) Before Tax	(61.393)	(33.500)	13.470
Provision for Taxation	22.558	53.599	2.582
Profit/(Loss) After Tax	(38.835)	(20.099)	10.888
Export Value	24.656	3.206	1.507
Import Value	274.741	207.499	262.881
Total Expenditure	1291.629	1166.205	1107.719

KEY RATIOS

PARTICULARS		31.03.2005	31.03.2004	31.03.2003
PAT / Total Income	(%)	(3.15)	(1.77)	0.97
Net Profit Margin (PBT/Sales)	(%)	(4.99)	(2.95)	1.20
Return on Total Assets (PBT/Total Assets}	(%)	(5.77)	(4.24)	1.44
Return on Investment (ROI) (PBT/Networth)		(0.27)	(0.16)	0.06
Debt Equity Ratio (Total Liability/Networth)		4.72	3.90	4.22
Current Ratio (Current Asset/Current Liability)		2.07	2.25	2.29

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated on 20^th November, 1998 at Mumbai in Maharashtra having Company Registration Number 117183.

The company formerly known as L & T – Case Equipment Limited was incorporated as a joint venture between Larsen and Toubro Limited (L & T) and Case Marutius US Limited (a subsidiary of Case Corporation, USA), with equal equity stakes of 50%. On October 1, 1999 the company acquired the earth moving equipment manufacturing business of L & T at Pithampur, as a going concern and commenced commercial operations.

The company is primarily engaged in the manufacture of earth moving equipments, comprising Backhoe Loaders and Vibratory Compactors, at its facility in Pithampur, near Indore.

Subsequent to the promulgation of the Companies (Amendment) Act, 2000, the company had ceased to be a deemed public company under section 43 A of the Companies Act, 1956, and pursuant to the approval of its application by the Registrar of Companies on December 13, 2001 changed its status to a private company and its name to L & T - Case Equipment Private Limited.

Segment Reporting

The company is engaged in the business of manufacture and sale of earth moving equipment, primarily in India. The significant products of the company comprise Backhoe Loaders and Vibratory Compactors.

Year in Retrospect

During the year, the company sold 524 numbers of Backhoe Loaders and 201 numbers of Vibratory Compactors. The sales and other income for the year amounted Rs. 1230 millions. The profit before tax was Rs. (61) millions and profit after tax was Rs. (39) millions.

Capital Expenditure

During the year the company added fixed assets worth Rs. 102 millions which include mainly plant and machinery, computers, vehicles and marketing rights. As at 31^st March, 2005 the net fixed assets stood at Rs. 292 millions.

Future Prospects

With the emphasis on investments being made in the infrastructure field, particularly in Road Construction, the business for the products of the company, Backhoe Loaders and Vibratory Compactors, is expected to grow in the current year and company expects a better performance in the current year. Thrust will also be given to explore the export market. Further there will be a higher focuse on sale of spare parts. The prospects of the company, thus, are very bright.

Research and Development

Specific areas in which R and D carried out by the Company

· Designing, testing of prototype and manufacturing of new version 580-3S model.

· Development of Rock breaker attachment with air filling system for 851 model.

· Development of extend hoe version of 580-3S model.

· Development of bottom dump bucket for 580-3S and 851 model.

Benefits derived as a result of above R and D

· Upgraded version of 76 hp 580-3S model introduced. This has improved reliability, reduced assembly time and helped to cater wider market segments.

· With alternative attachments developed for loader backhoe and compactors has increased customer base.

The company is in trade terms with: -

· AM Industries

· Chetak Auto Engineering Products Private Limited

· Mayoor Pressing Private Limited

· MP Engineering and Machine Tools

· NCM Shova Engineers Private Limited

· Rakesh Industries

· Shaktiman Auto Fabricators

· Synchrom Systems

· Ganson Heat Transfer

· Larsen and Toubro Limited

· CNH America, LLC

The company’s fixed assets of important value includes buildings, plant & machinery, electrical installation, furniture & fittings, office equipment, vehicles and computers.

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.45.92
UK Pound	1	Rs.84.76
Euro	1	Rs.57.95

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	4
--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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		43

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		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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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

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