MIRA INFORM REPORT

Report Date :

03.10.2008

IDENTIFICATION DETAILS

Name :	L M GLASFIBER (INDIA) PRIVATE LIMITED
Registered Office :	Plot No. 61 and 62, Kasaba Industrial Area, Hosakote, Bangalore – 562 114, Karnataka
Country :	India
Financials (as on) :	31.12.2006
Date of Incorporation :	30.12.1999
Com. Reg. No.:	08-26157
CIN No.: [Company Identification No.]	U31101KA1999PLC026157
Legal Form :	Private limited liability company.
Line of Business :	Manufacturer of Wind Turbine Rotor Blades

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 4900000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a part of LM Glasfiber, Denmark, having multinational operations. Its trade relations are fair. No financial details are available either from Registry or from Company. However, it can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Plot No. 61 and 62, Kasaba Industrial Area, Hosakote, Bangalore – 562 114, Karnataka
Tel. No.:	91-80-2791700 / 701
Fax No.:	91-80-27971320 / 532
E-Mail :	info.in@lmglasfiber.com ininfo@lmglasfiber.com dpp@lmglasfiber.com
Website :	www.lmglasfiber.com www.lm.dk
Location :	Owned
Factory :	Plot No. 85, 2^nd Phase, KIADB Industrial Area, Dobespet, Nelamangala Taluka, Rural District - 562 111, India
Area :	100 acres
Location :	Owned

DIRECTORS

Name :	Mr. Nirmal K Gupta
Designation :	Managing Director and Chief Executive Officer
Date of Birth/Age :	31.12.1949
Date of Appointment :	01.08.2002
Name :	Mr. Anders D Christensen
Designation :	Chairman and Managing Director
Address :	Ton Raa, Gedved, Denmark – DK8751
Date of Birth/Age :	02.10.1947
Date of Appointment :	09.09.1995
Name :	Mr. Soren F Knudsen
Designation :	Director
Address :	Maruavej 12, 6091 Bjert, Denmark
Date of Birth/Age :	30.07.1963
Date of Appointment :	01.03.2004
Name :	Mr. Lars K Mikkelsen
Designation :	Director
Address :	Nederbuveenget, 3866100, Hadfslv, Denmark
Date of Birth/Age :	23.03.1954
Date of Appointment :	28.02.2003
Name :	Mr. Bob Mackenzie
Designation :	Director
Address :	The Old Rectoxy, Ashow, Warwickshire, England CV8 2LE
Date of Appointment :	01.08.2005
Name :	Mr. Gade D Jorgen
Designation :	Director
Date of Birth/Age :	21.06.1957
Date of Appointment :	21.03.2006

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 31.12.2007)

Names of Shareholders	No. of Shares
L M Glasfiber A/S, Denmark	12599980
L M Glasfiber (Titanjin) Company Limited, China	10
L M Glasfiber Holland BV, Netherlands	2
L M Glasfiber Espanol ASA, Spain	3
L M Glasfiber (ND) Inc., USA	5
Total	12600000

Equity shares Breakup (percentage of total equity)

(As on 02.08.2007)

Category	Percentage
Foreign holdings (Foreign institutional investor(s), Foreign companie(s), Foreign financial institution(s), Non-resident Indian(s) or Overseas corporate bodies or Others	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Wind Turbine Rotor Blades.
Exports :
Products :	Wind Turbine Roter blades
Countries :	· US · China · Spain · Japan
Imports :
Products :	Raw Materials and Components for Roter Blades
Countries :	· North Europe · China · Australia · UK · US
Terms :
Purchasing :	Credit (30 days – 60 Days)

GENERAL INFORMATION

No. of Employees :	1400
Bankers :	BNP Paribas Bank, Standard Chartered Address: M G Road Branch, Kanhiham Road Branch

Banking Relations :	Satisfactory
Auditors :
Name :	S Datta Chartered Accountants
Address :	Mittal Towers, 10^th Floor, C Wing, # 47/6, M G Road, Bangalore – 560 001, Karnataka, India
Sister Concern :	· L M Glasfiber R and D (India) Private Limited Address : RMZ Infinity Tower – B, III floor, Benniganahalli, Bangalore – 560 016, Karnataka, India Tel No.: 91-80-66470200 Email : info.in@lmglasfiber.com · L M Glasfiber A/S, Denmark · L M Glasfiber (Titanjin) Company Limited, China · L M Glasfiber Holland BV, Netherlands · L M Glasfiber Espanol ASA, Spain · L M Glasfiber (ND) Inc., USA
Holding Company :	L M Glasfiber A/S, Denmark Rolles Mollevej 1, DK 6640 Lunderskov, Denmark

CAPITAL STRUCTURE

(As on 02.08.2007)

Authorised Capital :

No. of Shares	Type	Value	Amount
12600000	Equity Shares	Rs.10/- each	Rs.126.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
12600000	Equity Shares	Rs.10/- each	Rs.126.000 millions

FINANCIAL DATA

[all figures are in Rs. in millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2006	31.12.2005
SHAREHOLDERS FUNDS
1] Share Capital		126.000	126.000
2] Share Application Money		0.000	00000
3] Reserves & Surplus		848.293	718.020
4] (Accumulated Losses)		0.000	0.000
NETWORTH		974.293	844.020
LOAN FUNDS
1] Secured Loans		0.000	0.000
2] Unsecured Loans		0.000	0.000
TOTAL BORROWING		0.000	0.000
DEFERRED TAX LIABILITIES		0.000	0.000
TOTAL		974.293	844.020
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		622.445	650.628
Capital work-in-progress		28.196	20.806
INVESTMENT		0.000	0.659
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	529.256	480.822
	Sundry Debtors	461.601	158.129
	Cash & Bank Balances	171.338	201.051
	Other Current Assets	9.465	7.427
	Loans & Advances	38.699	38.922
Total Current Assets		1210.359	886.351
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	791.025	622.048
	Provisions	157.882	105.658
Total Current Liabilities		948.907	727.706
Net Current Assets		261.452	158.645
MISCELLANEOUS EXPENSES		62.200	13.282
TOTAL		974.293	844.020

PROFIT & LOSS ACCOUNT

PARTICULARS		31.12.2006	31.12.2005
Sales Turnover		3180.064	2686.504
Other Income		34.891	27.263
Total Income		3214.955	2713.767
Profit/(Loss) Before Tax		499.961	367.608
Provision for Taxation		154.181	148.417
Profit/(Loss) After Tax		345.780	219.191
Earnings in Foreign Currency :
	FOB value of Exports	881.372	107.675
Total Earnings		881.372	107.675
Imports :
	Raw Materials	1535.176	1317.905
	Stores & Spares	26.854	21.381
	Capital Goods	73.572	157.653
Total Imports		1635.602	1496.939
Expenditures :
	Financial charges	0.103	0.115
	Depreciation & Amortization	196.238	156.600
	Other Expenditure	2518.653	2189.444
Total Expenditure		2714.994	2346.159

KEY RATIOS

PARTICULARS		31.12.2006	31.12.2005
PAT / Total Income	(%)	10.76	8.08
Net Profit Margin (PBT/Sales)	(%)	15.72	13.68
Return on Total Assets (PBT/Total Assets}	(%)	27.28	23.92
Return on Investment (ROI) (PBT/Networth)		0.51	0.44
Debt Equity Ratio (Total Liability/Networth)		0.97	0.86
Current Ratio (Current Asset/Current Liability)		1.28	1.22

LOCAL AGENCY FURTHER INFORMATION

WEBSITES DETAILS:

LM GLASFIBER BLADES

Competitive wind energy

They have one goal, which they share with their customers: to maintain the competitiveness of wind energy by making sure that electricity produced this way gets cheaper all the time. It’s about keeping both investment and operating costs to a minimum, while boosting how much electricity the turbine can produce.

Performance and reliability

Their contribution to this is reliable, high-performance blades that exploit the wind energy to the full throughout the 20-year service life of the turbine.

Lightning protection

LM blades feature the best lightning protection currently available, with documented results.

Financial results for 2006

24-04-2007

Financial results for 2006

1 January 2006 – 31 December 2006 LM Glasfiber increases sales by 43%

By expanding capacity and improving capacity utilisation LM Glasfiber increased sales by 43% while improving profitability. In terms of MW, sales rose to an all time high of 4,100MW from 3,000MW in 2005.

· Sales in 2006 amounted to DKK 3,539 million up from DKK 2,469 million in 2005. Main drivers for the increase were strong global demand for wind power, geographical positioning in the key growth markets for wind power and a broadening of their customer base. 

· Earnings before interest, taxes, depreciation, amortisation and special items (EBITDA) amounted to DKK 796 million against DKK 416 million in 2005, and operating profit (EBIT) amounted to DKK 401 million against DKK 160 million in 2005.

· Operating profit as a percentage of sales improved from 6.5% in 2005 to 11.3% in 2006 exceeding their margin guidance of 10%. The improvement was mainly based on improved capacity utilisation, changes in product and market mix as well as price increases compensating for an increase in raw material prices in 2005.

· Investments, which in 2006 related primarily to capacity expansions in China and North America as well as the development of new blade designs and moulds were DKK 298 million. Total capacity added in 2006 was larger than reflected in investments as most of their investments in their Canadian plant were capitalised in 2005.

· Free cash flow increased to DKK 217 million compared with DKK 56 million in 2005 due mainly to the increase in operating profit.

· For 2007, LM Glasfiber forecasts sales growth of at least 25%, and operating profit is expected to represent at least 10% of revenue. Their outlook for 2007 is based on:

o Strong global demand for wind power

o Broadened strategic customer base and long-term contracts with key customers 

o Continued capacity expansion of 1,000MW in China, India and Spain 

o Expected run-in costs associated with bringing three new factories on-line in 2007 

o Continued high capacity utilisation and expected positive cost effects from their comprehensive process improvement programme REACH.

Introduction LM Glasfiber

LM Glasfiber A/S, Denmark began its production of FRP Rotor Blades for the wind turbines in 1978. Since then it has been steadily expanding its production and service facilities in several countries such as India, Spain, Germany, Netherlands, Poland, United States & China besides Denmark. It has a broad customer base with 20 global and local wind turbine manufacturers. As on date LM Group has produced more than 72000 blades of various sizes ranging from 13.4m to 61.5m long. This contributes to a total generation of electrical power through the wind turbines to the tune of 15200MW. LM group has 2100 employees on its role.

LM Glasfiber has been a market leader in rotor solutions since long with a fluctuating global market share of approx.30-40%. LM Glasfiber has core competencies in Design, Materials, Processes, Automation, Mould Building, Production, Testing and Quality Management under one roof. It has also specialized R & D organization with extensive experience in designing and manufacturing large blades for multi mw wind turbines for onshore and offshore operations. LM has strategic multi location production and service facilities around the world so that it can have flexible production and service to cater to customer needs. LM has also developed several global supplier collaboration with specific local purchase possibilities.

LM Glasfiber’s approach to uniform quality

LM recognizes the essential need to ensure uniform quality of its product globally. In order to achieve this difficult task it has embarked on the establishment of essential core competencies within the group. It is a common knowledge that whenever they encounter an engineering problem, the best practice is to use the 7 QC Tools for scientific trouble shooting. Similarly LM deploys 7 core competencies in technical and managerial functions to meet the challenge of ensuring uniform quality world wide. They are design, process, materials, know how/experience, tools/systems, testing and HR skills.

Design

Design data base is the foundation on which other core competencies are built. In order to have a strong data base it is imperative to have the in-house Research & Development constantly functioning. Innovative material selection and smart engineering lead to optimization of structural design. The understanding of how the strength on one design parameter affects the other parameter is the key driver in enhancing the reliability and cost effectiveness. The design of aerodynamic geometry of blade is aimed at bringing a balance on the ratios between blade performance and loads on the blade. This means that the ratio between the power production of the turbine and the cost of ownership of the blade during its 20 yrs of design life time should be optimized. The same principle is also applicable to the ratio of performance and noise. In order to adequately support these concepts, design tools such as computational fluid dynamics, Flex-5, LM-Blade and finite element method are extensively used. Use of new materials, new tools and new blade structure form the core of futuristic blade technology leading to considerable weight reductions and increased performance. It is also envisaged that in future, a computer will be monitoring the measurements of strain, acceleration in root, temperature, lightning detection and cracks in the trailing edge on the blade so that the blade is enabled to be smart in its performance. Effective protection against lightning is crucial for the safety of a wind turbine. The blades are the most expensive single components of a wind turbine and a lightning strike can have a highly destructive effect on an unprotected blade. Replacing components and carrying out any repairs made necessary by lightning strikes are much more costly in the case of an offshore machine than on land based sites. All of this presents a considerable challenge to lightning protection for the rotor blades-a challenge that LM lightning protection has tackled and beaten.

Process

LM has perfected several process technologies for manufacturing the rotor blades. Among them, the most

frequently used are the hand lay up and vacuum infusion techniques. Automation in process technology ensures shorter cycle time, clear documentation and good repeatability. ISO 9001:2000 quality management system ensures uniform process guidelines in the manufacture of rotor blades. LM has also evolved global procedures for key areas such as technology transfer, audits of products and processes. It also has prescribed global specifications for materials, working instructions, process specifications and training programme for technicians.Audits of production and other key processes are performed by LM Group quality and environment department in all LM companies.

Audits of blades produced include the documentation and often a static test is performed by LM Group quality and environment and also by R&D departments on location to verify conformance of blades in serial production.

www.lmglasfiber.com 4 / 5

Materials

LM strongly believes in the right choice of materials that yield best performance to cost ratio when used in the blade construction utilizing the simplest process. LM also possesses a large data base on the material properties and their characterization. This is owing to the fact that a fully fledged material testing laboratory manned by specialists has been relentlessly working on new and advanced materials. Material specialists of LM have developed special formulations and specifications for a number of critical materials for use in the blades and moulds including some of the process aids. Also, the culture of working very close with the world renowned material suppliers guiding and helping them by sharing confidential details of the process requirements has been yielding amazing results in meeting the stringent quality and time schedule. Global purchase contracts, pricing and volumes have attracted many of the suppliers to enthusiastically participate in most of the R&D projects in developing and testing new and advanced materials for the current and future projects.

Know-how and experience

The abundant experience and the know-how gathered over the years of R&D pursuit have brought into the organization manufacturing efficiency with optimization of cost and technology. This tremendous advantage is evident from the facts that LM has the largest specialized R&D affording the fast learning-curve effect, reduced start up and product development cost, shorter pay-back of recurrent investments in materials and process technology and short time to market. This means LM brings in global manufacturing in different locations of the world at low cost to market with local sourcing advantages that makes risk diversification a reality. The success of performance of a truly a global company lies in translating the know-how and experience of the core group to its subsidiaries around the world. This is made possible by a systematic technology transfer procedure. Standardized project manual, describing phases, gates and objectives when starting production of a specific blade type in a LM company is the trigger. One company having the best expertise and currently producing the blade type acts as the transferor. A project team consisting of participants from both the transferor and receiver companies is in charge of the transfer. Training of the receiving company’s workers in transferor’s company is initiated months in advance. Complete documentation package is transferred, including working instructions, checklists,

bill of materials, tools list etc. Necessary hardware such as moulds and materials is transferred. Review of all new processes, materials and tools is carried out by the transferor. Finally, a product audit is performed on the first article and the necessary acceptance certificates are issued.

Tools and systems

The manufacturing process for the FRP rotor blades is basically a moulding technique that involves a mould split along the chord of the blade profile. The process may involve reasonably high temperatures due to exothermic heat or external heating to effect polymerization. So, it is necessary to ensure adequate strength, rigidity and thermal stability in the mould while designing the same. For obvious reasons the giant moulds are made with non-metallic, composite materials and the mould building by itself an expertise that is hard to get. LM has mastered the composite tooling technology and has established a centre of expertise to build moulds for all its subsidiaries.

Specialized materials and processes for repair and maintenance of the moulds and accessories have been developed and strict procedures and training on tool engineering are imparted to the users. All the data storage and technical transactions of the entire group are connected through world wide computer network system called team centre engineering and all the group companies use a common ERP system called Axapta for all the key functions such as inventory,planning, finance, production and HR. All the group companies are inter- connected through a highly secure global intranet to exchange and share all the information.

Testing

LM embarks on integrated test programme for operational assurance and product lifetime. LM is the only blade manufacturer with accredited full scale inhouse test facilities. The present capacity is capable of testing the blades up to 65m long and loads up to 30MNm. Simulation of 20 years of operation including external actions that may need to be performed for even 6 months-depending upon the type of blade- is carried out in these test facilities. Random test of the full blade and components and extensive NDT (Non Destructive Testing) programme using infra red and ultra sound scanning are regular features of this facility. Besides product testing, LM has test facilities for receiving inspection of raw materials, coupon tests for process control and metrology checks in the mould fabrication facility.

HR skills

Good people will be happy only in a company with good people. This understanding of human values by all the group companies has lead to the strategy of local management. Adapting value based leadership such as initiative, responsibility and forward thinking and following global HR guidelines on recruitment, development, performance appraisal and training the trainers are common practices of entire group companies. Periodical international training for the managers and best practice transfers through group conferences on major functional levels such as technical, service, purchase, finance and quality.

Conclusion

LM Glasfiber A/S today, is reckoned as the highly quality oriented group of companies by the entire business fraternity in the wind energy sector. The aforesaid strategy has enabled LM group to earn the respect of the global customers largely due to the fact that it has conquered the challenge of achieving the uniform quality of its product world wide. Hence, LM rotor blades, irrespective of their source of manufacture any where in the world are acknowledged to be identical with respect to their quality and performance.

References

1. LM NewsLetters, LM Glasfiber A/S, DK-6640 Lunderskov.

2. Newer concepts in the technology application on composite wind turbine rotor blades, C.S.Sampath Kumaran, Technical Director, LM Glasfiber (India) Pvt.Ltd.

3. Taming the power of lightning, LM Glasfiber A/S DK-Lunderskov.

4. A Non-Destructive test Method, LM Glasfiber A/S DK-6640 Lunderskov.

Trade Reference:

· Vestas Wind Technology, Pondichery

· GE Energy, Chennai (Japan)

· Elecon Engineering Company Limited, Gujarat

· Suzlan Energy, Pune

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.46.96
UK Pound	1	Rs.83.91
Euro	1	Rs.66.36

SCORE & RATING EXPLANATIONS

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