MIRA INFORM REPORT

Report Date :

28.03.2007

IDENTIFICATION DETAILS

Name :	PATEL ENGINEERING LIMITED
Registered Office :	Patel Estate, Swami Vivekanand Road, Post Box No. 8357, Jogeshwari (West), Mumbai – 400102, Maharashtra
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	02.04.1949
Com. Reg. No.:	11-7039
CIN No.: [Company Identification No.]	L99999MH1949PLC007039
TAN No.: [Tax Deduction & Collection Account No.]	MUMP02050G / MUMP00205C
PAN No.: [Permanent Account No.]	AAACP2567L
Legal Form :	A Public Limited liability company. The company’s shares are listed on the Stock Exchange.
Line of Business :	Construction of Tunnels, Dams, Bridges, Buildings, Power Stations, Marine Works, etc.

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 8000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced, respectable and resourceful businessmen. Their trade relations are reported as fair. General financial position is good. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings.

LOCATIONS

Registered Office :	Patel Estate, Swami Vivekanand Road, Post Box No. 8357, Jogeshwari (West), Mumbai – 400102, Maharashtra, INDIA
Tel. No.:	91-22-6784410-12/4863/2885/2916
Fax No.:	91-22-6782455/1505
E-Mail :	headoffice@pateleng.com info@pateleng.com
Website :	http://www.pateleng.com
Branches :	Lurthra industrial Premises Unit No. 1, Andheri Kurla Road, Safed Pool, Saki Naka, Mumbai - 400072
Tel. No.:	91-22-28515606/28515466
Fax No.:	91-22-28512885
E-Mail :	sharexindia@vsnl.com

DIRECTORS

Name :	Mr. K. Kannan
Designation :	Director
Qualification :	B.Com, F.C.A., AICWA
Experience :	40 Years
Name :	Mr. Khizer Ahmed
Designation :	Director
Qualification :	M.A. Economics
Experience :	42 Years
Name :	Mr. Rohit Patel
Designation :	Director
Qualification :	B. Sc. (Mechanical Engineering)
Experience :	40 Years
Name :	Mr. Dinesh V Patel
Designation :	Director
Qualification :	B.E. (Civil)
Experience :	40 Years
Name :	Mr. Rajat Patel
Date of Birth/Age :	24-02-1967
Qualification :	B.E. (Civil)
Experience :	16 Years
Date of Appointment :	12-01-1995
Previous Employment :	Amrfina Constructions Limited
Name :	Mr. Danish Merchant
Designation :	Director
Qualification :	Under-Graduate
Experience :	15 Years
Name :	Mr. Ajay Tuli
Date of Birth/Age :	31-12-1966
Qualification :	B. Com
Experience :	16 Years
Date of Appointment :	27-12-2005
Name :	Mr. Rupen P. Patel
Designation :	Managing Director
Date of Birth/Age :	24.08.1966
Qualification :	B.Com., M.B.A. (Fin., USA)
Experience :	14 Years
Date of Appointment :	26.10.1995
Directorship in other public limited companies :	1) ASI-RCC India Limited 2) Advanced Magnetics Limited
Name :	Ms Sonal Patel
Designation :	Whole Time Director / Chief Operating Officer
Date of Birth/Age :	22.01.1964
Qualification :	B.Com., M.B.A. (Fin., USA)
Experience :	18 Years
Date of Appointment :	19.08.1993
Directorship in other public limited companies :	ASI-RCC India Limited
Name :	Mr. Nimish Patel
Designation :	Whole Time Director
Date of Birth/Age :	28.02.l970
Qualification :	B.S. (USA)
Experience :	35 Years
Date of Appointment :	01.02.1999
Last Employment :	Kiwit Construction Company, USA
Name :	Mr. Silloo Patel
Designation :	Whole Time Director
Qualification :	B.A.
Experience :	58 Years
Date of Appointment :	19.10.1992
Name :	Mr. Pravin Patel
Designation :	Director
Date of Birth/Age :	03-01-1937
Date of Appointment :	29-08-1989
Last Employment :	ASI RCC India Limited Patel Energy Limited

SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters	32259186	64.52 %
Banks, Mutual Funds & Fits	5400288	10.80 %
Private Body Corporate	670472	01.34 %
NRIs & OCBs	115582	00.23 %
Trust	3325950	06.65 %
Indian Public	8228522	16.46 %
TOTAL	50000000	100.00 %

BUSINESS DETAILS

Line of Business :	Construction of Tunnels, Dams, Bridges, Buildings, Power Stations, Marine Works, etc.
Products :	Product Description: v Civil Engineering and Construction v Turnkey Civil Contracting

GENERAL INFORMATION

No. of Employees :

3000

Bankers :

Ø State Bank of India

Ø Bank of India

Ø Dena Bank

Ø Canara Bank

Ø ICICI Bank Limited

Ø Corporation Bank

Facilities :

SECURED LOANS :	Rs in Millions
FROM BANKS :
- Against Hypothecation of stock, spare parts, book debts, work in progress & guarantees	270.684
- First charge on assets acquired out of the term loan alongwith unencumbered assets & guarantees	579.160
- First charge on the equipment financed	217.521
- Against Guarantee	750.000
- 8.50% Secured Non Convertible Debenture	125.000
Exclusive charge by way of mortgage of Immovable and hypothecation of movable properties. Earliest date of redemption is June 11, 2006.
OTHERS:
From Financial and Leasing Companies .first charge on the equipment financed	159.092
UNSECURED LOANS
From Banks	100.000
From Others	384.000

Banking Relations :	Satisfactory
Auditors :
Name :	Vatsaraj and Company Chartered Accountants Mumbai - 400023
Associates/Subsidiaries :	Ø Patel Engineering Inc. Ø Patel Engineers Private Limited Ø Patel Patron Private Limited Ø ASI RCC Inc. Ø Westcon Micro tunneling Inc. Ø ASI Civil Constructors Inc. Ø ASI RCC India Limited Ø Shreeanant Construction Private Limited Ø Patel Realtors Private Limited Ø Praham Engineering Private Limited Ø Enpro Limited
Joint Venture :	Ø KNR-Patel Ø Patel – KNR Ø Patel – Michigan Ø KNR - PATEL JV Ø PATEL - KNR JV Ø PATEL-SOMAJV Ø Soma-Patel-ASI JV Ø Patel-Michigan JV Ø LGE & C-Patel JV Ø Patel-SA JV Ø Patel-L&T JV

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
150,000,000	Equity Share	Rs.1/- each	150.000 million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
50,000,000	Equity Share	Rs.1/- each	Rs. 50.000 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		50.000	48.605	24.302
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1897.006	1245.005	934.642
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1947.006	1293.610	958.944
LOAN FUNDS
1] Secured Loans		2101.458	1074.232	844.828
2] Unsecured Loans		484.000	129.000	25.300
TOTAL BORROWING		2585.458	1203.232	870.128
DEFERRED TAX LIABILITIES		121.823	144.050	130.696
CONTRACTEE ADVANCES		1769.800	1853.680	1119.286
TOTAL		6424.087	4494.572	3079.055
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1726.807	1676.333	1457.617
Capital work-in-progress		46.074	0.000	0.000
INVESTMENT		167.741	281.794	76.566
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2853.506	1428.282	702.253
	Sundry Debtors	1022.040	768.278	223.447
	Cash & Bank Balances	520.062	917.152	319.060
	Other Current Assets	1.024	0.913	0.757
	Loans & Advances	2464.755	1435.844	1291.189
Total Current Assets		6861.387	4550.469	2536.706
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2354.358	1977.739	961.588
	Provisions	25.079	36.285	30.245
Total Current Liabilities		2379.437	2014.024	991.833
Net Current Assets		4481.950	2536.445	1544.872
MISCELLANEOUS EXPENSES		1.515	0.000	0.000
TOTAL		6424.087	4494.572	3079.055

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		8131.762	5440.691	3957.063
Other Income		46.845	50.200
Total Income		8178.607	5490.891	3957.063
Profit/(Loss) Before Tax		770.779	437.976	282.854
Provision for Taxation		46.073	48.354	54.310
Profit/(Loss) After Tax		724.707	389.622	228.544
Earnings in Foreign Currency :
	Contract Receipts	77.298	224.790	456.758
	At USA Office	0.008	0.077
Total Earnings		77.306	224.867	456.758
Imports :
	Raw Materials	12.118	0.563
	Stores & Spares	9.620	2.136	49.983
	Capital Goods	187.657	119.408
Total Imports		209.395	122.107	49.983
Expenditures :
	Cost of Construction	6311.799	4252.393
	Administrative & Other Expenses	640.226	400.857	3674.208
	Interest Cost (Net)	199.663	190.052
	Depreciation	256.141	209.613
Total Expenditure		7407.829	5052.915	3674.208

QUARTERLY RESULTS

PARTICULARS	30.06.2006	30.09.2006	31.12.2006
Type	1st Qtr	2nd Qtr	3rd Qtr
Sales Turnover	2899.700	1978.900	2183.600
Other Income	26.000	19.600	10.800
Total Income	2925.700	1998.500	2194.400
Total Expenditure	2581.500	1671.600	1764.700
Operating Profit	344.200	326.900	429.700
Interest	46.400	[13.200]	24.400
Gross Profit	297.800	340.100	405.300
Depreciation	65.000	66.000	70.000
Tax	33.200	23.700	43.600
Reported PAT	199.600	250.400	291.700

Notes :

200606 Quarter 1 –

Expenditure Includes Cost of Construction Rs 2373.231 million General & Administrative Expenses Rs 208.284 million Tax Indicates Provision for Tax (Includes Deferred Tax) EPS is Basic & Diluted Status of Investor regular Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 01 Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter 01 1. The above financial results were reviewed by the Audit Committee and approved and taken on record by the Board in its meeting held on July 29, 2006. 2. The Company is in Civil Engineering and Construction industry, is seasonal in character. In view of this, financial results for the quarters are not comparable with the annual results. 3. The Company has a single business segment namely 'Civil Construction'. 4. Other income includes rental income of Rs 9.766 million which is perennial in nature, share of profit from joint ventures, partnership firms etc. and is a part of operating income. 5. Financial Results for the quarter ended June 30, 2006 are subject to limited review by statutory auditor. 6. During the quarter the company has allotted 96,59,090 shares on its follow on public offering. 7. Figures have been regrouped to make them comparable wherever considered necessary.

200609 Quarter 2 –

1.The above financial results were reviewed by the audit committee and approved an taken on record by the Board in its meeting held on 30th October 2006. 2.The company is in Civil Engineering and Construction industry, is seasonal in character. In view of this financial results for the quarter are not comparable with the annual results. Also previous quarter/period figures are prior to follow on public issue. 3.The company has a single business segment namely 'Civil Construction '. 4.Un-audited financial results of the overseas subsidiary are translated into Indian Rupees using the qverage exchange rates prevailing during the period. 5.Pursuant to the Accouting Standard-15 (Revised) on Employee benefits issued by the Institute of Chartered Accounts of India, being mandatory with effect from April 01, 2006 the adjustment on account of employee benefits upto March 31 2006 will be dealt with the opening general reserve as per the transitional provision at the year end. Current period provisions are made on estimated basis. 6.Financial results for the quarter ended 30th September 2006 are subject to limited review by statutory auditor. 7.Information on investors complains for the quarter ended on 30.09.2006: Regular Issue Related Complaints Complaints a. No. of complaints at the beginning 1 NIL b. Received during the quarter NIL 314 c. Disposed off during the quarter NIL 314 d. Balance as on 30.09.2006 1 NIL 8.Information as required under clause 43 of the listing agreement. The company had raised Rs.4250 Millions on issue of additional shares of 9659090 on its follow on public offer. (Rs. in Millions) Particulars Envisaged Actuals as on use upto 2008 30.09.2006 Investment in capital expenditure 7000 560.72 Repayment of contractee advanes/debt 8000 7928.00 Investments in infrastructure projects, acquisitions & joint ventures 15000 764.71 General corporate purpose 10000 5153.17 Issue related expenses 2500 1609.15 TOTAL 42500 16015.75 The funds will be progressively utilized and the unutilized funds has been temprorily invested in bank/fixed/security deposits. 9.During the quarter ended 30.09.2006 the company acquired controlling stake in Michigan Engineers Private Limited a Mumbai based urban infrastructure company. Accordingly Michigan Engineers Private Limited has become subsidiary of the company. 10.During the quarter ended 30.09.2006 the company incorporated two new companies viz: Patel KNR Infrastructure Private Limited and Patel Engineering Infrastructure Private Limited having 60% and 100% shareholding respectively. The companies are yet to commence business. 11.Figures have been regrouped to make them comparable wherever considered necessary.

200612 Quarter 3 –

EPS is Basic & Diluted Status of Investor regular Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter 01 Complaints Received during the quarter Nil Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter 01 Status of Investor Issue related Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 85 Complaints disposed off during the quarter 85 Complaints unresolved at the end of the quarter Nil 1. The above financial results were reviewed by the Audit Committee and approved and taken on record by the Board in its meeting held on January 16, 2007. 2. The Company is in Civil Engineering and Construction industry, is seasonal in character. In view of this, financial results for the quarter are not comparable with the annual results. Also previous quarter / period figures are prior to follow on public issue. 3. The Company has a single business segment namely 'Civil Construction'. 4. Pursuant to the Accounting Standard - 15 (Revised) on Employee benefits issued by the Institute of Chartered Accounts of India, being mandatory with effect from April 01, 2006 the adjustment on account of Employee benefits upto March 31, 2006 will be dealt with the opening general reserve as per the transitional provision at the year end. Current period provisions are made on estimated basis. 5. Financial Results for the quarter ended December 31, 2006 are subject to limited review by Statutory auditor. 6. Information as required under clause 43 of the Listing agreement The Company had raised Rs 4250 million on issue of additional share of 9659090 on its follow on public offer. (Rs.in millions) Particulars Envisaged use upto 2008 Investment in Capital Expenditure 7,000.00 Repayment of Contractee Advances / Debt 8,000.00 Investments in infrastructure projects, subsidiaries, acquisitions and joint ventures 15,000.00 General Corporate Purpose 10,000.00 Issue related expenses 2,500.00 Total 42,500.00 (Rs.in millions) Particulars Actual as on December 31st,2006 Investment in Capital Expenditure 2,708.74 Repayment of Contractee Advances / Debt 7,928.00 Investments in infrastructure projects, subsidiaries, acquisitions and joint ventures 1,314.71 General Corporate Purpose 8,197.67 Issue related expenses 1,716.15 Total 21,865.27 The fund will be progressively utilized and the unutilized funds has been temporarily invested in bank / fixed / security deposits. 7. During the quarter ended December 31, 2006 five wholly owned subsidiary companies were incorporated. These are SPV's to exploit the existing land bank of the Company at prime cities in the Country over the next three years. 8. Company has procured orders worth more than Rs 1750.00 million during the period ending December 31, 2006. The order book stands at approximately 21% higher than March 31, 2006. 9. Figures have been regrouped to make them comparable wherever considered necessary.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	2.29	2.24	2.30
Long Term Debt Equity Ratio	2.19	2.19	2.18
Current Ratio	2.24	1.97	1.92
TURNOVER RATIOS
Fixed Assets	2.70	2.00	1.82
Inventory	3.04	3.61	4.26
Debtors	7.67	9.31	14.09
Interest Cover Ratio	4.06	3.21	2.52
Operating Profit Margin (%)	18.63	18.31	18.16
Profit Before Interest and Tax Margin (%)	14.90	13.77	13.13
Cash Profit Margin (%)	14.29	12.97	11.43
Adjusted Net Profit Margin (%)	10.56	8.44	6.39
Return on Capital Employed (%)	19.20	17.43	16.60
Return on Net Worth (%)	44.73	34.59	26.64

STOCK PRICES

Face Value	Rs.1.00/-
High	Rs.348.00/-
Low	Rs.327.00/-

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Patel Engineering Company Limited was incorporated in 1949 with an issued and subscribed capital of Rs.0.88 mn. It operates in the areas of industrial complexes, building projects, power projects & underground works, dams, bridges & marine works. PFCL has been involved in implementing projects relating to steel plants, oil refineries, foundries & machine shops, chemical plants, thermal, atomic & hydro-electric projects, dams. 

In 2001 the company has been accredited with ISO 9002 certificate.  

Patel Engineering Company Limited has built hotels, theatres, post offices, sports stadia etc. PECL has been involved in building projects and dams overseas in countries like Qatar, Bhutan etc. 

The company secured 7 projects in irrigation sector and 4 projects in hydro sector worth more than 20000 Millions. 

During 2004-05 the company has sub-divided its equity share face value from Rs.5/- to Re.1/-. Further its has issued bonus equity shares to its shareholders in the ratio of 1:1.

FIXED ASSETS:

Ø Land

Ø Building

Ø Factory Building

Ø Machinery

Ø Motor Car

Ø Motor Truck

Ø Office Equipment

Ø Computer

Ø Electrical Equipment

PROMINENT PROJECTS EXECUTED :

Project	M.W.	Location
Koyna Project Stage IV (Contract I)	1000	Maharashtra
Srisailam Left Bank Station	900	Andhra Pradesh
Srisailam Right Bank Station	770	Andhra Pradesh
Teesta Project, Stage V	510	West Bengal
Balimela H.E Project	480	Orissa
Tons H.E Project	375	Madhya Pradesh
Koyna Project, Stage III	320	Maharashtra
Mettur H.E Project	200	Tamil Nadu
Baira Sul H.E Project	180	Himachal Pradesh

PROMINENT PROJECTS UNDER EXECUTION :

Project Name	Location	Client
Construction of RCC Dam for Ghatghar, Pumped Storage Scheme	Maharashtra	Irrigation Department of Maharashtra State
Koyna Project, Stage IV - Extension of HRT	Maharashtra	Irrigation Department of Maharashtra State
Civil and Hydro-mechanical works for Diversion Dam and Part Head Race Tunnel for Parbati H.E. Project - Lot PB.1 (4 x 200MW)	Himachal Pradesh	NHPC
Sewa Project, Stage-ll - Lot-SW.2 of 120MW (3 x 40MW)	Jammu	NHPC
Teesta Low Dam Project, Stage-Ill - Lot TL-1 of 132 MW (4 x 33MW)	and Kashmir	NHPC
Kameng Project, Package I, II and III	West Bengal	NEEPCO
PB III : Lot 1:Construction Spillway Tunnels including dams, Rockfill dam, Spillway, Structures and Part Head III (4 x 130 MW )	Arunachal Pradesh	NHPC

Irrigation and Water Supply

Irrigation & water supply projects include a wide range of activities depending on the project. Patel Engineering aspires to replicate its expertise in multi purpose water supply and power projects in this area and has recently forayed into developing agricultural infrastructure through lift irrigation in light of the tremendous opportunity in this segment backed by government spending. The company has also entered into Engineering Procurement and Construction (EPC) and/or Lump Sum Turnkey (LSTK) execution of lift-irrigation projects, primarily in the state of Andhra Pradesh.

PROMINENT PROJECTS UNDER EXECUTION :

Project Name	Location	Client
Bhima Lift Irrigation Project, Lift- 1	Andhra Pradesh	Irrigation & CAD Department, AP
Kalwakurthy Lift Irrigation Project, Stage-l Pumping Station with 5 x 30MW Pump Motors	Andhra Pradesh	Irrigation & CAD Department, AP
Jawahar Lift Irrigation Project, Stage-l & II	Andhra Pradesh	Irrigation & CAD Department, AP

Transportation:

The company has undertaken several projects in India under above.

Name of the Project	Features of the Work
Construction of Fly-over-Bridge to cater four lane traffic on Ring Road at Surat	Length-1850m, Piers-180nos
Plant Road Work for Simhadri Thermal Power Project	Construction of Plant Road
Udhampur - Katra Railway Project	Construction of Tunnel No I, IV & V
Surat Manor Tollway Project (Package - II) Rehabilitation of Surat - Manor Section of NH - 8 (Km343.000 to km. 381.000)	Rehabilitation and Upgrading of NH-8 (Km343.000 to Km. 381.000)
Krishnagiri Vaniyambadi Section of NH-46 (KR-I) Package - 3 (Km. 0.00 to Km.49.00)	Widening to 4-lanes and Rehabilitation of existing 2 lane carriageway of NH- 46 Km. 0.00 tc Km 49.00

PROMINENT PROJECTS UNDER EXECUTION :

Project Name	State	Client
.Rehabilitation of Road from Alnavar to Yellapur in Belgaum and Uttar Kannada	Karnataka	Karnataka State Highways
East-West Corridor, Assam, Contract Package No. EW- II (AS-18)	Assam	NHAI
Madurai to Kanyakumari Road, Contract Package NS- 39 & 43 (TN)	Tamil Nadu	NHAI
Construction of Single Line BG Tunnel No. 7 &No10	Assam	Northeast Frontier Railway
Lumding to Lanka section l/c Lanka Bypass of NH-54 in Assam on East West Corridor under Phase-ll (AS - 15)	Assam	NHAI
Rehabilitation of Road from Pune Nagar Road Ramvadi Jakar Naka to New Pune Municipal Co. limit.	Maharashtra	New Pune Municipal Corporation

Taxation :

Parent company ( PEL)

Income-tax assessments are completed up to A.Y. 2003-2004. Several appeals for the earlier years are pending

before the Appellate Authorities Based on legal opinion, the Company does not envisage any Income-tax liability.

However, the Company would be liable for Minimum Alternate Tax on book profit under Section 115 JB of the Income Tax Act for which a provision for Rs.62.700 Millions (P.Y. Rs.35,000') has been made. The Company has provided for Fringe Benefit Tax of Rs.5.000 Millions The Company has been legally advised that it is not liable to Wealth-Tax except on Motor Cars. Accordingly Wealth Tax of Rs.600' (P.Y. Rs.500') has been provided. . The company is entitled to deductions under the Income Tax Act, which are in nature of permanent benefits.

Patel Engineering Inc.

Decrease in deferred Income Tax of Rs. 4.024 Millions (P.Y. Increase of Rs. 4.317 Millions).

ASI RCC Inc. Current Income Taxes of Rs.8.611 Millions (P.Y. Rs. 0.336 Millions) & Increase in deferred Income Taxes of Rs 6.765 Millions (P.Y. increase of 13.595 Millions).

Westcon Microtunneling Inc.

Current Income Taxes of Rs.0.066 Millions (P.Y. Rs. Nil') & Increase in deferred Income Taxes of Rs. 7.365 Millions (P.Y. increase of Rs.1.164 Millions).

Industrial Relations: 

During the year under report the Industrial Relations at all sites continue to be cordial, peaceful and no untoward incident has taken place. 

Directors: 

Shri Rupen Patel, Shri Rajat Patel and Shri Pravin Patel, Directors retire by rotation and are eligible for reappointment.  

Similarly the terms of Ms. Sonal Patel, and Shri. S.K. Desai, Whole-time Directors are expiring on 31st August 2006 and the Directors recommend for their reappointment. 

Shri Ajay Tuli, who was appointed as an Additional. Director by the Board effective 27th December 2005 is retiring at the conclusion of this Annual General Meeting and the Board recommend for his reappointment.  

With the appointment of Shri Ajay Tuli as an Independent Director on the Board, the Company has complied the requirements under the Listing Agreement and the guidelines of the SEBI thereon.

Corporate Governance:  

The report on Corporate Governance, Management Discussion and Analysis Statement are attached hereto which form part and parcel of Directors Report.  

Conservation of Energy:  

The Company does not have any manufacturing activities and therefore the statement thereon is not furnished. Particulars of Employees The provisions of Section 217(2A) of the Companies Act, 1956 is complied by annexing a statement showing the particulars of employees drawing the required salary to be reported read with Companies (Particulars of Employees) Rules 1975.  

INDUSTRY OUTLOOK:  

Transport sector domincated the scene for the year 2005-2006 with large number of projects being announced by National Highway Authority of India (NHAI), the lead agency for development of road networks across the country which will implement the project in 7 phases under the National Highway Development Program and the Pradhan Mantri Gram Sadak Yojna. The Phase I and Phase II are already under implementation and the work under Phase III has also commenced the projects under Phase III to VI will be taken up in a phased manner with increased thrust on private sector participation by awarding the project under the ROT Annuity or Toll Road models. India has emerged with the second largest road network in the world after US. Roads network occupy a crucial role to the nation as nearly 70% of the freight movement and 85% of the passenger movement despite the fact that only a very small percentage of the road network has the facility to cater to such load. The National Road Transport Policy is also being formulated for participation of the private sector and rationalization of the existing program. The Railways has been trying to regain and expand its share in the freight and passenger business. The railways also plan to generate and deploy sufficient funds for capital outlay and also evaluating various models under the Public Private Partnership agreements. The company has undertaken a few roads and railway projects in order to maintain its diversified portfolio. The company also plans to foray into BOT Annuity based contracts.  

Accomplishments

With the help of a very experienced group of engineers, having wide range of experience, Patel has been able to successfully bring to India new technologies and also implement them in few of the works for the first time in the history of the country

Lake tapping at Koyna Hydro Electric Project, Maharashtra

Roller Compacted Concrete Dam in Ghatghar, Maharashtra

Strengths

Expertise, resources and timely execution of projects.

Global Exposure.

Technology and skills to meet the challenges in business demands of future.

Proven Track record.

Matured and cultivated contractors support.

Experienced and highly skilled man power.

Equipped with Heavy Construction Machinery worth more than Rs.3000 millions

Good Financial track record.

An ISO 9001 company.

GLOBAL SUBSIDIARIES

ASI RCC INC.

ASI RCC Inc was incorporated on April 1987, in Colorado, USA. The company is a general contractor primarily focused on Roller Compacted Concrete Dam Construction and rehabilitation. The company also provides construction management services on projects globally. The ASI portfolio includes dams, power and treatment plants, mines, tunnels, highways, etc.

WESTCON MICROTUNNELING

Westcon Microtunneling Inc USA incorporated in 1978. One of the initial microtunneling contractors in the United States, Westcon has an unparalleled history in the industry. There is no other company in the country with the knowledge, experience or cutting edge capability that Westcon possess

INTERNATIONAL PROJECTS

* Platonovrissi Dam & Hyroelectric project -- Greece

* The Hack dam and resorvoir - Wyoming - USA

* Stagecoach Dam and resorvoir - Colorado USA

* Token river water supply project - Northeast africa

* Middle fork dam - colorado USA

* Bowetanna Dam - Srilanka

* Chukha Dam - Bhutan

* Chukha Hydro electric project - Bhutan

* Confrence centre cum secretariat complex - Bhutan

* General Post office - Doha Qatar

* Wholesale market centre and mosque - Doha Qatar

WHY PATEL

* Expertise, resources and timely execution of projects.

* Global Exposure.

* Technology and skills to meet the challenges in business demands of future.

* Proven Track record.

* Matured and cultivated contractors support.

* Experienced and highly skilled man power.

* Equipped with Heavy Construction Machinery worth more than Rs.3000 millions

* Good Financial track record.

* An ISO 9001 company.

“ A Proven Track Record Of Results exceeding Expectations.”

Core Business Highlights

Patel is a recognized leader in underground construction of Tunnels and Caverns of different shapes, sizes in various ecological and geological formations.

The company executed following overseas and Indian Projects:

Doha General Post Office

Qatar Wholesale Market Centre

Qatar New Headquarters Buildings

Qatar Bowatenna Tunnel Project

Sri Lanka Bowatenna Dam

Sri Lanka Phuntsholding Sewage Project

Bhutan Gyesta Hydro Electric Project

Bhutan Conference Centre – cum – Secretariat Conference Centre for Royal Government of Bhutan.

Nagurjuna Sagar Hydro Electric Project, Andhra Pradesh

Koyna Hydro Electric Project, Maharashtra

Yamuna Hydro Electric Project, Uttar Pradesh

Koyna stage IV Hydro Electric Project, Maharashtra

Maharashtra Konar Dam

Durgapur Steel Project

Subject employs around 5,781 persons in its set up comprising of 281 in permanent staff Managers, Engineers and Professionals, 500 in Subordinate staff and 5000 in Temporary staff.

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.43.47
UK Pound	1	Rs.85.36
Euro	1	Rs.57.89

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	8
--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		61

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