MIRA INFORM REPORT

Report Date :

2^nd November, 2006

IDENTIFICATION DETAILS

Name :	EIMCO ELECON INDIA LIMITED
Registered Office :	P B No. 6, Anand Sojitra Road, Vallabh Vaidyanagar, Gujarat – 388 120, India.
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	31.07.1974
Com. Reg. No.:	04-2574
CIN No.: [Company Identification No.]	L29199GJ1974PLC002574
TAN No.: [Tax Deduction & Collection Account No.]	BRDE00193E
PAN No.: [Permanent Account No.]	AAACE4645C
Legal Form :	Public Limited Liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing and Marketing of Tunnelling Loaders with various attachments other than Road Headers, Drilling & Roof Bolting Jumbo for Mining, Mining Machinery, viz., Off-The Highway Dumpers of various types including Articulated profile, Air Motors and Hydraulic Cylinders.

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 3500000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. Trade relations are fair. Financial position is good. Payments are correct and as per commitments. The company is doing well. It can be considered good for any normal business dealings at usual trade terms and conditions. It can be regarded as a promising business partners in a medium to long run.

LOCATIONS

Registered Office :	P B No. 6, Anand Sojitra Road, Vallabh Vaidyanagar, Gujarat – 388 120, India.
Tel. No.:	91-2692-230502 / 230602 / 230902
Fax No.:	91-2692-246506
Factory 1 :	P B No. 6, Anand Sojitra Road, Vallabh Vaidyanagar, Gujarat – 388 120, India.
Tel. No.:	91-2692-230502 / 230602 / 230902
Fax No.:	91-2692-246506

DIRECTORS

Name :	Mr. P M Patel
Designation :	Chairman
Name :	Mr. P B Patel
Designation :	Managing Director
Name :	Mr. Werner Kraher
Designation :	Director
Name :	Mr. Hans Gass
Designation :	Director
Name :	Mr. Hakan Kingstedt
Designation :	Director
Name :	Mr. H S Parikh
Designation :	Director
Name :	Mr. N S Patel
Designation :	Director
Name :	Mr. U M Patel
Designation :	Director
Name :	Mr. A M Deshpande
Designation :	Whole Time Director

KEY EXECUTIVES

Name :	Mr. Nilesh D Shelat
Designation :	Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters Holding
-- Indian Promoters	2756965	47.79
-- Foreign Promoters	1447875	25.10
-- Persons acting in concert	9030	0.16
Sub Total	4213870	73.05
Non – Promoters Holding
-- Institutional Investors
a. Mutual Funds and UTI Banks, Financial Institutions, Insurance Companies (Central / State Government Institutions / Non- Government Institutions) b. Foreign Institutional Investors	32097 374448	0.56 6.49
Sub Total	406545	7.05
-- Others
a. Private Corporate Bodies b. Indian Public c. Non – Resident Indians d. Any Other (clearing members)	62218 1055600 23656 6496	1.08 18.30 0.41 0.11
Sub Total	1147970	19.90
GRAND TOTAL	5768385	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing and Marketing of Tunnelling Loaders with various attachments other than Road Headers, Drilling & Roof Bolting Jumbo for Mining, Mining Machinery, viz., Off-The Highway Dumpers of various types including Articulated profile, Air Motors and Hydraulic Cylinders.

Products :

Item Code No. (ITC Code)	843020.00
Product Description	Side Dump Loaders (SDL)
Item Code No. (ITC Code)	843050.01
Product Description	Load Haul Dumper (LHD)
Item Code No. (ITC Code)	843139.09
Product Description	Hydraulic Cylinder

Exports to :

Australia, Canada, France, Indonesia, South Korea and Turkey.

PRODUCTION STATUS

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Tunnelling Loaders with various attachments other than Road Headers	Nos.	400	350	102
Drilling & Roof Bolting Jumbo for Mining	Nos.	55	30	--
Mining Machinery, viz., Off-The Highway Dumpers of various types including Articulated Profile	Nos.	50	30	--
Air Motors	Nos.	500	300	157
Spares for above	Lacs	1400	2500	6040.82
Hydraulic Cylinders	Nos.	3000	2000	934
Blasthole and Water well drilling rigs	Nos.	50	10	--

GENERAL INFORMATION

Customers :

Some of the Major Customers of the company are :

® Ganesh Engineering Company Limited

® Gujarat Technocasting Private Limited

® Giriraj Industries

® Marigold Paint Private Limited

® Nabsons Engineering Private Limited

® Rythem Industries

® Radhika Industries

® Rupkala Engineering Works

® Shree Vallabh Industries

® Vinod Industries

® Western Metal Caps Limited

No. of Employees :

About 1800

Bankers :

® State Bank of India

Anand, Gujarat, India.

Facilities :

Secured Loan

(Rs. in millions)

	2006	2005
S B I Anand
-- Working Capital Demand Loan	150.000	100.000
-- Cash Credit	0.000	7.597
-- Foreign Currency Term Loan	0.000	99.352
Term Loan	137.967	36.659
Total	287.967	243.608

Unsecured Loan

(Rs. in millions)

	2006	2005
Fixed Deposits	60.239	59.524
Buyer’s Credit from Banks	43.329	0.000
Sales Tax Deferment Account – Wind Mill	0.094	0.094
Short Term Loans from Banks	0.000	145.000
Total	103.662	204.618

Banking Relations :	Good
Auditors :	Talati & Talati Chartered Accountants Ahmedabad, Gujarat, India.
Associates :	® Elecon Engineering Company Limited ® Wizard FinCap Limited ® Power Build Elecon Gears Limited
Subsidiaries :	® Emtici Engineering Limited ® VVN Manufacturing and Investa Limited ® Power Build Limited ® Bhatru Holding Private Limited ® Narmada Travel Services Limited ® Elecon Information Technology Limited ® Akkaish Printing and Stationery ® Eimco Elecon Electricals Limited
Collaborators :	® Sandvik Tamrock, France ® Sandvik Asia Limited, Pune, Maharashtra, India ® Sandvik Mining and Construction, Singapore ® Sandvik Mining and Construction, UK ® Sandvik Mining and Construction, USA
Membership :	® Confederation of Indian Industry

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
10,000,000	Equity Shares	Rs. 10/-	Rs.100.000 millions

Issued Capital :

No. of Shares	Type	Value	Amount
5,768,386	Equity Shares	Rs. 10/-	Rs.57.684 millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5,768,385	Equity Shares	Rs. 10/-	Rs.57.684 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		57.700	57.700	57.700
2] Reserves & Surplus		840.700	781.300	716.800
NETWORTH		898.400	839.000	774.500
LOAN FUNDS
1] Secured Loans		288.000	243.600	100.000
2] Unsecured Loans		391.700	448.200	182.100
TOTAL BORROWING		679.700	691.800	282.100
TOTAL		1290.100	1287.200	1056.600
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		517.200	451.400	393.600
Capital work-in-progress		4.500	3.200	3.700
INVESTMENT		21.000	20.000	10.200
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	571.200	455.600	237.400
	Sundry Debtors	359.200	453.700	260.400
	Cash & Bank Balances	71.500	187.300	144.900
	Loans & Advances	62.800	73.700	250.000
Total Current Assets		1064.700	1170.300	892.700
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	285.800	330.300	218.200
	Provisions	31.500	27.400	25.400
Total Current Liabilities		317.300	357.700	243.600
Net Current Assets		747.400	812.600	649.100
TOTAL		1290.100	1287.200	1056.600

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	977.700	1053.100	866.800
Profit/(Loss) Before Tax	124.200	139.900	121.000
Provision for Taxation	41.800	52.400	46.700
Profit/(Loss) After Tax	82.400	87.500	74.300
Export Value	39.400	2.713	NA
Import Value	359.236	370.357	NA
Total Expenditure	786.500	853.900	699.300

QUARTERLY RESULTS

PARTICULARS	30.06.2006
Type	1^st Qtr
Sales Turnover	209.400
Other Income	4.700
Total Income	214.100
Total Expenditure	155.100
Operating Profit	59.000
Interest	7.500
Gross Profit	51.500
Depreciation	18.900
Tax	5.100
Reported PAT	28.600

200606 Quarter 1 : -- Expenditure Includes (Increase) / Decrease in Stock in Trade Rs (38.828) million Consumption of Raw Materials Rs 124.280 million Staff Cost Rs 10.626 million Compensation to Distributors Rs 34.066 million Other Expenditure Rs 24.889 million Tax includes Current Tax Rs 5.000 million Deferred Tax Rs (1.069) million Fringe Benefit Tax Rs 0.120 million.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	0.48	0.45	0.23
Long Term Debt Equity Ratio	0.25	0.23	0.17
Current Ratio	2.07	2.16	3.15
TURNOVER RATIOS
Fixed Assets	1.11	1.39	1.54
Inventory	1.78	2.81	3.64
Debtors	2.24	2.72	2.89
Interest Cover Ratio	4.61	5.54	8.33
Operating Profit Margin (%)	24.74	23.66	21.94
Profit Before Interest and Tax Margin (%)	17.40	17.56	16.40
Cash Profit Margin (%)	16.39	15.10	14.41
Adjusted Net Profit Margin (%)	9.04	9.00	8.86
Return on Capital Employed (%)	12.31	14.57	14.90
Return on Net Worth (%)	9.49	10.85	9.93

STOCK PRICES

Face Value	Rs.10.00
High	Rs.334.250
Low	Rs.334.250

LOCAL AGENCY FURTHER INFORMATION

Performance 

During the year under review, the Company has achieved the turnover of Rs.93.17 million (previous year Rs. 1008.20 million). The net profit stood at Rs.82.40 million (previous year Rs. 87.51 million). 

Biodata

Eimco Elecon, established in 1974 was promoted as a joint venture between Elecon Engineering Company and Envirotech Corporation, US (a subsidiary of Baker Hughes), to manufacture hi-tech drills and loaders used in underground mining.  

Envirotech was active in the mining business through its division Eimco Mining Equipment Group, till 1989, then from Baker Huges, the Eimco division was taken over by the Finnish Industrial Organisation OY Tampella, whose mining equipment division Tamrock is the market leader with over 40% share internationally, OY Tampella through its subsidiary, Tamrock Great Britain Holdings, held around 39% of Eimco Elecon's Rs 24.700 million equity till the Dec '92 issue later it's holding decreased to 25.1%.  

Eimco Elecon's product range includes mining equipment like air-powered rocket shovels, electro-hydraulic side dump loaders, etc. The air motors manufactured by the company are partly used for captive consumption. Later EEL has diversified into granite quarry line products.  

In 1995-96, the company installed two wind mills with a total generating capacity of 0.60 MW at Upleta/ Pransla (Rajkot district), Gujarat. 

The Company has obtained the prestigious ISO 9001 Quality Management System Certification from TUV Management Services GmbH, Germany for Design, Development, Manufacturing, Installation and Servicing of Mining and Construction Machines, Hydraulic Cylinders and Accessories. 

In 1999-2000, the company has signed two collaboration agreements with Sandvik Tamrock Secoma SA, France and Driltech Mission LLC, USA for manufacture of CTX models of Load Haul Dump machines(for use in both coal & hard rock mines) and for manufacture of Rotary Blast hole drilling and DTH drills respectively.

Company’s fixed asset of important value includes:

® Freehold Land

® Buildings

® Plant and Machinery

® Plant and Machinery (Leased)

® Electric Fittings

® Office Equipment

® Air Conditioners

® Furniture and Fixtures

® Vehicles

Eimco Elecon India Limited was incorporated in the year 1974 and was promoted by Environtech Corporation, USA, Elecon Engineering Company Limited, Vallabh Vidyanagar and its Chairman and Managing Director Mr. B.I. Patel.

Eimco Group of Companies Subsidiaries of Environtech USA are the world leader in production of underground mining machinery having plants in U.K., USA, Canada, France and Australia. EEIL and Eimco Group of Companies entered into collaboration under which EEIL received necessary technical know-how from Eimco Group of Companies for production of underground mining machineries.

In 1989, Eimco Group of companies were acquired by Tamrock OY., a world leader in technology and manufacturing of rock excavation and breaking equipments for surface and underground mines and civil engineering construction with production and assembly facilities in various parts of the world backed by world wide sales and distribution net work.

Internationally, Tamrock holds close to 40% market share in the mining machinery business. It is a leading supplier of drilling and loading equipments for hard rock applications.

EEIL produces a very wide range of underground mining machinery viz. Air Powered Rocker Shovels, Electro hydraulic Side Dump Loaders and Electro Hydraulic and Air Powered Load Gaul Dumpers used as loading machines in both the underground Coal mines and Metalliferous mines. It also manufactures Air Motors for captive consumption and other OEM manufacturers, company also manufactures hydraulic Drilling and Roof bolting jumbos and Auger-cum-Drills and Tugger Hoists. Side Dump Loaders, Load Haul Dumpers and Auger-cum-Drills forms backbone of the mechanization system of underground coal mines.

ISO 9001 Certification

The company has obtained the prestigious ISO 9001 Quality Management System Certification from TUV Management Service GmbH, Germany for Design, Development, Manufacturing, Installation and Servicing of Mining and Construction Machines, Hydraulic Cylinders and Accessories.

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 records 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.44.83
UK Pound	1	Rs.85.36
Euro	1	Rs.57.21

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--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
TOTAL		63

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	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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