MIRA INFORM REPORT

Report Date :

18.10.2008

IDENTIFICATION DETAILS

Name :	ELECTROTHERM (INDIA) LIMITED
Registered Office :	A-1, Skylark Apartment, Satellite Road, Satellite, Ahmedabad – 380015, Gujarat, India
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	17.10.1985
Com. Reg. No.:	008191
CIN No.: [Company Identification No.]	U99999GJ1985PLC008191
TAN No.: [Tax Deduction & Collection Account No.]	AHME00193E
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchange
Line of Business :	Manufacturer of Medium Frequency Induction Melting Furnaces, Metal Refining Konverter, Induction Ladle Refining Furnace, Induction Heating/Hardening Equipments, Submerged Arc Furnace & a host of allied products.

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 19236800
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company having satisfactory track. Trade relations are fair. General financial position is satisfactory. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	A-1, Skylark Apartment, Satellite Road, Satellite, Ahmedabad – 380015, Gujarat, India
Tel. No.:	91-79-26746474/26748855
Fax No.:	91-79-26740923
E-Mail :	sb@electrotherm.com sec@electrotherm.com
Website :	http://www.electrotherm.com
Engineering and projects Division :	Survey No. 72, Village: Palodia, Tal: Kalol, District: Gandhinagar- 382115, Gujarat, India
Steel, Engineering, DI pipe and Electric Vehicl Division :	Survey No. 325, Village: Samakhiyali Taluka, Bhachau, District: Kutchh, India
Factory :	414/1, GIDC Phase – II, Vatva Industrial Area, Ahmedabad – 382445, Gujarat, India
Wind Farm Project :	Village: Dhank, Taluka: Upleta, District: Rajkot, Gujarat, India

DIRECTORS

Name :	Mr. Mukesh Bhandari
Designation :	Chairman and Chief Technology Officer
Name :	Mr. Shailesh Bhandari
Designation :	Managing Director
Name :	Mr. Harish Sharma
Designation :	Whole Time Director
Name :	Mr. Narendra Dalal
Designation :	Whole Time Director
Name :	Mr. Avinash Bhandari
Designation :	Whole Time Director
Name :	Mr. Naveen Nakra
Designation :	Director
Name :	Mr. Nilesh Desai
Designation :	Director
Name :	Mr.Madhusudan Somani
Designation :	Director
Name :	Mr. Ram Singh
Designation :	Director
Name :	Mr. Pradeep Krishna Prasad
Designation :	Director
Name :	Mr. Sunay Mathure
Designation :	Nominee Director
Name :	Mr. Ravi Trehan
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Ashwin Patel
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 31.03.2008)

Names of Shareholders	No. of Shares	Percentage of Holding
A. PROMOTERS SHAREHOLDING
1. Promoters and promotes Group	3201075	29.16
B. PUBLIC SHREHOLDING
2. Mutual Funds /UTI	38385	0.35
3. Bankers/ Financial Institutions	150100	1.37
4. Foreign Institutional Investors	21375	0.19
5. Foreign Financial Institution	1366666	12.45
6. Bodies Corporate	1400862	12.76
7. NRIS	98215	0.89
8. Trusts	1369333	12.48
9. Foreign Companies	2000000	18.22
10. Clearing Members	29387	0.27
11. Indian Public	1300976	11.85
Total	10976374	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Medium Frequency Induction Melting Furnaces, Metal Refining Konverter, Induction Ladle Refining Furnace, Induction Heating/Hardening Equipments, Submerged Arc Furnace & a host of allied products.
Products :	Electronic Induction Furnace Induction Heating Equipment Electricity Power Generation

PRODUCTION STATUS: (As on 31.03.2008)

Particulars	Unit	Installed Capacity	Actual Production
Electronic Furnaces and other capital equipments.	Sets	350	298
Wind Power Generation	KW	500	--
Thermal Power generation	Million KWH	0.80	0.396
Steel Plant Capacity:
Gross Capacity	MT	422000	283526
Captive Capacity of Sponge and Pig	MT	110000	65077
Saleable Capacity ( Billets/Bars/Pipes )	MT	312000	218449
Battery Operated Vehicles	Nos	150000	16398

GENERAL INFORMATION

No. of Employees :

1043

Bankers :

· Bank of India,

Navrangpura Branch, Swastik Char Rasta, C.G. Road, Ahmedabad –

380009

· State Bank of India

· Punjab National Bank

· State Bank Of Travancore

· Corporation Bank

· Bank of Baroda

· State Bank of Saurashtra

· Dena Bank

· Oriental Bank Of Commerce

· Union Bank Of India

· Canara Bank

· Uco Bank

· ICICI Bank

· State bank of Indore.

Facilities :

Particulars	31.03.2008 Rs. In millions
· SECURED LOANS
1. WORKING CAPITAL LOANS FROM BANKS (Working CapitalLoans are secured by first charge by way of hypothecation of all company’s stock and receivables and second charge on all immovable fixed assets and second charge by way of equitable mortgage of all immovable properties situated at Vatva, Palodia, Dhank, Samakhiyali-kutch. Further the loans are guarnteed by the personal guarantees of some of the directors of the company.)	2309.240
2. TERM LOAN FROM
A. Banks	2892.170
B. International Finance Corporation(USD15 Millions) (Term Loans are Secured by first charge by way of equitable mortgage of all immovable properties and hypothecation of specified movable assets situated at vatva, Palodia, Dhank,Samakhiyali,-Kutch and as second charge on all stock in trade and receivables. Further the loans are guaranteed by the personal guarantees of the some of the directors) The charge for the ECB loan taken from International Finance Corporation is yet to be created.	615.150
3. VEHICLE AND HOME LOANS (Hypothecation of specific vehicles.)	10.320
4. SALES TAX DEFERMENT (Amount due within one year Rs. NIL (PY. NIL)	0.620
TOTAL	5827.510
UNSECURED LOANS
1. LOANS FROM
A. Banks	1302.130
B. International Finance Corporation(USD 10 Millions)	383.220
C. Financial Insutitutions	0.000
2. Other Loans, Advances and Deposits from
A. Directors	3.250
B. Customers, Staff and Others	774.060
TOTAL	2462.660

Banking Relations :	Satisfactory
Auditors :
Name :	Mehta Lodha and Company Chartered Accountants
Address :	Ahmedabad, India
Associates :	· Ahmedabad Aviation and Aeronautics Limited · Palace Tours and Air Charters Private Limited. · Western India Speciality Hospital Limited. · Mangalam Information Technology Limited. · Liberty Finance and Leasing Company Private Limited. · E-Motion Power Limited. · Indus Elec-Trans Private Limited. · Magnum Limited. · Alwar Trading and Investment Company · Afghan Trading Private Limited. · Bhandari Brothers Commercial Private Limited. · Palanpur Reality Developers Private Limited. · Jay Shree Petro Yarn Private Limited. · Adroit Trading and Investment Company · EIL Hospitality Private Limited. · EIL Realty Private Limited. · EIL Software Private Limited. · EIL Software Services Offshore Private Limited. · EIL Technology Private Limited. · Electrotherm Infrastructure Private Limited. · Global Avianautics Limited. · Indus Real Estate Private Limited. · New Delhi Real Estate Private Limited. · Palace Infrastructure Private Limited. · S B Realty Developers Private Limited. · Smart Infra power Private Limited. · Sun Infrapower Private Limited. · Sun Residency Private Limited. · Suraj Real Estate Private Limited.
Subsidiaries :	· Jinhua Indus Enterprises Limited. · Jinhua Jahari Enterprises Limited.

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
25000000	Equity Shares	Rs. 10/-Each	250.000 Millions
25000000	6% Non cumulative redeemable preference shares	Rs. 10/- Each	250.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
10976374	Equity Shares (Out of above Shares 953275 Shares are allotted on 13^th November, 1995 as fully paid up bonus shares by capitalizing general reserve and profit and loss account.)	Rs. 10/- Each	109.760 Millions
12000000	6% Non Cumulative redeemable preference shares (Redeemable at par not later than 20 years from the date of their issue.	Rs. 10/- Each	120.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		229.760	211.300	167.700
2] Share Application Money		30.000	0.000	0.000
3] Reserves & Surplus		3587.600	1918.200	269.200
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		3847.360	2129.500	436.900
LOAN FUNDS
1] Secured Loans		5816.560	3081.100	1827.900
2] Unsecured Loans		2473.600	780.200	312.800
TOTAL BORROWING		8290.160	3861.300	2140.700
DEFERRED TAX LIABILITIES		521.550	0.000	0.000
TOTAL		12659.070	5990.800	2577.600
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		5542.900	2784.100	1527.300
Capital work-in-progress		1657.170	973.300	362.700
INVESTMENT		21.250	0.700	0.700
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2962.260	2028.600	749.900
	Sundry Debtors	2726.450	1386.000	622.000
	Cash & Bank Balances	621.540	410.400	212.200
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	1724.780	486.700	242.300
Total Current Assets		8035.030	4311.700	1826.400
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2697.710	2096.000	1100.600
	Provisions	200.030	105.600	55.300
Total Current Liabilities		2897.740	2201.600	1155.900
Net Current Assets		5137.290	2110.100	670.500
MISCELLANEOUS EXPENSES		300.460	122.600	16.400
TOTAL		12659.070	5990.800	2577.600

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		13253.580	7465.300	3676.400
Other Income		67.840	2988.800	115.800
Total Income		13321.420	7754.100	3792.200
Profit/(Loss) Before Tax		621.79	614.700	222.500
Provision for Taxation		0.000	181.200	104.100
Profit/(Loss) After Tax		621.790	433.500	118.400
Earnings in Foreign Currency :
	Export Earnings	1232.300	486.810	NA
Total Earnings		1232.300	486.810	NA
Imports :
	Raw Materials	1591.620	845.500	NA
	Stores & Spares	63.140	13.260	NA
	Capital Goods	86.770	31.970	NA
	Others	0.000	0.000	NA
Total Imports		1741.53	890.730	NA
Expenditures :
	Raw Materials	8677.040	4876.600	2505.400
	Excise Duty	0.000	156.500	229.200
	Power and Fuel Cost	0.000	608.900	212.000
	Other Manufacturing Expenses	1681.840	472.300	125.800
	Employee Cost	311.180	153.800	90.900
	Selling and Administration Expenses	566.610	309.800	160.200
	Miscellaneous Expenses	0.000	32.700	83.400
	Increase/(Decrease) in Finished Goods	(63.040)	0.000	0.000
	Interest	0.000	350.300	92.300
	Depreciation	318.610	178.500	70.500
	Research and Development expenses	8.410	0.000	0.000
	Financial expenses	785.090	0.000	0.000
	Other Expenditure	413.890	0.000	0.000
Total Expenditure		12699.630	7139.400	3569.700

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2008
Type	1^st Quarter
Sales Turnover	3848.700
Other Income	9.800
Total Income	3858.500
Total Expenditure	3192.300
Operating Profit	666.200
Interest	299.100
Gross Profit	367.100
Depreciation	95.600
Tax	28.800
Reported PAT	181.200

KEY RATIOS

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Debt- Equity Ratio		2.05	2.35	4.39
Long Term Debt-Equity Ratio		1.57	1.92	3.36
Current Ratio		1.42	1.33	1.17
TURNOVERS RATIOS:
Fixed Assets		2.89	3.11	3.00
Inventory		5.38	5.33	6.29
Debtors		6.47	7.23	8.80
Interest Cover Ratio		2.32	2.75	3.41
Operating Profit Margin	(%)	15.95	15.44	10.48
Profit Before Interest and Tax Margin	(%)	13.58	13.03	8.56
Cash Profit Margin	(%)	7.02	8.27	5.14
Adjusted Net Progit Margin	(%)	4.64	5.85	3.22
Return On Capital Employed	(%)	20.57	22.79	17.00
Return On Net Worth	(%)	21.59	36.65	41.75

LOCAL AGENCY FURTHER INFORMATION

HISTORY:

Subject, the Ahmedabad based company, was started in the early eighties by two enterprising brothers Mukesh Bhandari and Shailesh Bhandari, along with Harish Sharma and Narendra Dalal.

Subject manufactures medium frequency induction melting furnaces, induction heating and hardening equipment, single electrode DC arc furnaces, secondary metallurgical equipment like DC ladle refining furnaces, etc. subject is also into wind power generation. Since its first order of 350-KW Medium frequency induction furnace in Jun 1983, it has installed over 300 induction furnaces allover India and abroad sofar. Subject also has some firsts to its name like design and commission of India's first indigenously made solid state generator of 1200 KW.

Subject has set up a sister concern for new products like laser cutting machines for cutting stainless steel to very close tolerances which otherwise is a difficult operation.

Subject has received the prestigious 'Dhatu Nayak' award for the year 1997-98 and 1998-99 for indigenous development, manufacture and Commissioning of India's largest Medium Frequency Induction Melting Furnace of 7500 KW/15 Ton capacity for Alloy steel and key contribution to stainless steel and alloy steel industry by developing indiginously developing cost effective equipment for manufacturing of stainless steel through induction furnace route respectively. 

The Company also supplied India's largest MF Induction Melting Furnace of 20 Tons capacity to M/s Shah Alloys Limited, Ahmedabad. In the year 2000-01 the company was accredited with ISO-9001 certificate through RWTUV.

OPERATIONS:

The Indian economy is today a strong position and at the current annual growth rate, as per Japan's central bank, India's economy will overtake Japanese economy by the year 2025 to rank third in the world after theUnited States and China in terms of purchasing power parity. Realization of such a growth potential is possible only with the growth in manufacturing sector and the corresponding support from infrastructure sector.

During the year, your Company has achieved a turnover of Rs. 13254 Millions in comparison to the turnover of Rs.7248 Millions of previous year, showing a growth of 83%. Net profit after provision for taxation (Before Prior Period Adjustment) during the year is Rs.622 Millions as against Rs. 432 Millions during the previous year, showing an increase of 44%.

CAPITAL PROJECTS:

The company is undertaking an aggressive capacity addition program besides launching new products. The company has assessed the requirement of finances for these initiatives. All the plant capacity addition programs are to be financed with a debt to equity ratio of 60:40. In this connection the company has allotted Equity Shares as per SEBI Guigelines for Preferential Issues to a private equity player ((M/s DEG-Deutsche Investitions-und Entwicklungsgesellschaft mbH, Cologne, Germany) to raise Rs.820 Millions.

The company has completed its Second Phase of project at Kutch. The Third Phase of the project, having an outlay of Rs.5820 Millions is in advanced stage and is likely to be completed by June 2009. The finance is being

tied up and except for QIP issue of Rs. 3000 Millions, all other funds have been received.

With this expansion, the company will be self sufficient in sponge iron, pig iron and power. The company would also have established facilities for manufacturing transformers. In addition, the company will become more competitive in ductile iron pipes and pipe line projects due to enhanced capacities of 150000 TPA and a full range from 100 mm dia to 400 mm dia. The company would also make foray into supplying structural steel for transmission line towers and eventually enter this segment as turnkey implementer of transmission projects. This expansion will also enable the company to position itself better in international markets, specially in the area of turnkey projects. The other products like induction heating and hardening equipment will also get a boost due to additional manufacturing infrastructure.

In the electric vehicle division, the company will become self sufficient in all the components including motors, batteries and electronic controllers.

EXPORTS :

The thrust on exports continues and the company has completed prestigious projects in Turkey and MiddleEast. Due to expansion in geographical reach, the company has been able to achieve exports of Rs.1490 Million as against Rs.515 Million in the year ending Mar 2007. This is a 189% jump in exports in the engineering division. In the coming year, the company is again targeting huge growth in the export front. The pending export orders are in excess of Rs.1200 Million and the important destinations are again Turkey, Middle East and their traditional markets in Pakistan, Africa and Bangladesh.

QUALITY ENVIRONMENT :

Quality is the most important mantra of the company and no effort is spared to ensure best quality and after sales service to their customers. Today Subject product is recognized as one of the best not only in India but globally. This emphasis on quality has enabled the company to position its product above the competitors and Subject brand is now recognized as a symbol of quality. Subject is recognized as a company which tailors its products according to the requirements of the customers instead of trying to push the products which it is comfortable in manufacturing. This customer focus has earned a good name for the company and your company has a record that none of its customers ever change their loyalties in favour of its competitors. In a short time, all the products which the company launched at its newly established engineering and steel works at Kutch have been recognized as brand leaders.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT 

AN OVERVIEW OF ECONOMY:

The optimism stemming from the sustained high growth rates of last few years, excellent tax revenues and corporate profits is now appearing to be fading. Many economists are now predicting slowing down of the global

economy which will also slow down Indian economy. In India, the slow pace of infrastructure development and stagnation of agriculture along with rising rupee have discouraged many people. There is now a doubt if 9% growth rate which their country has been registering for the last two years is sustainable. Land for industrial applications has always been a sensitive issue and there have been cases where a wide spread opposition to acquisition of farm land for industrial use was the reason for delay in implementation of prestigious projects.

In spite of all these, the domestic steel consumption continues to grow and the consumption touched about 60 million tons in 2007 as against 35 million tons in 2001. The consumption of steel has outstripped the production and the country imported more than 6 million tons of steel last year. This is an enough indication to expand capacity in steel as the demand will continue to be buoyant in the next few years.

India is gearing up for a GDP growth rate of 9-10% during the next decade and if the steel capacity in the country does not increase, there will be lot more imports in this area. Indian companies have been active in formulating projects to expand steel making capacity and their company has not been left behind in this. Funding is also not a problem as profitability of company like their has been good and will remain to be good. Internationally is also best the steel demand is growing at 6% per annum and all this is an opportunity for their engineering and project division to grab this share of growing capacity in steel production in several developing economies like Middle East, Africa, Turkey, Iran , Russia and many other countries.

INTERNAL CONTROL SYSTEM AND ADEQUACY:

The company has proper internal mechanism, which monitors the adequacy and effectiveness of the internal control. Looking to the growth of the business, The company has further strengthened the internal controls and management analysis. They also have a regular monitoring of business risk control procedure by the Internal Audit Department, which is reviewed by the Audit Committee.

COMPANY'S BUSINESS PLAN:

A. Engineering, Capital and Project Division

1. Engineering Division related to metallurgical Industry

This is the oldest division of the company which started in 1985. Over the years, the company has successfully demonstrated its capability and competed with players such as ABB, GEC, Inductotherm etc. The company has also collaboration with HYL, Mexico for Gas Based DRI Plants. Starting as a Furnace manufacturer, it has emerged as a company which provides turnkey solutions to foundries, steel plants, alloy steel plants and stainless steel plants. The company is also the dominant player in Induction Heating and Hardening Equipment used by engineering and automobile industry. The core competence of the company is power electronics and it has a strong R&D base. Consistently the company has been first in the country in introducing new products in its area of activity and today commands more than 50% market share. The company employs more than 300 engineers for product development, R&D, manufacturing and servicing. It is providing customized engineering and metallurgical solutions to its customers and is recognized as a company which can deliver custom built equipment at a very low delivery period vis-à-vis its competitors.

2. Engineering Structural

The company is installing a versatile Rolling Mill for production of Alloy Steel Bars and Structurals. It will cater to the growing market of Structural steel used in transmission line towers, engineering projects and infrastructure projects. It will also supply special steels and alloy steels meant for engineering industry and auto sector, both in India and abroad. The company is in the process of establishing a most modern melting shop consisting of Ladle Refining Furnace, Vacuum Degassing facilities and Continuous Casting with Electro Magnetic Stirring. The capacity of the plant will be 36000 Tons per annum.

There are practically no plants in Gujarat capable of manufacturing alloy steel bars and heavy structurals. There is a huge growth in this segment and Subject will be able to en-cash this opportunity.

3. Transmission Lines Towers

The total investment in Transmission Line Towers is expected to be Rs 70,000 crores in next five years and the investment in Telecom Towers and other similar activities is expected to be Rs 50,000 Crores. There is a huge demand for galvanized structures from middle east and USA. Considering the huge opportunity in this sector, Subject is setting up a composite unit to cater to this area. The project envisaged includes setting up steel melting facilities of 2.2 Lac TPA, bloom casting facilities of 2.1 Lac TPA, structural rolling facilities of 2 Lac TPA and fabrication facility of 1 Lac TPA. The Company will also set up galvanizing facility of 1 Lac TPA.

4. Transformers

The transformer segment is among the largest beneficiaries of the power sector reforms. The industry, which had fallen by as much as 31% during FY97-10, in terms of units produced, has pearly tripled its production since then. Transformers derive demand from need generation capacity addition, which needs to be wheeled to a demand centre, or transmission project, that is independent of a generation project.

Rural electrification is another driver that requires transformers, which are of slightly lower rating and hence value. Apart from these, a ramp – up in distribution infrastructure provides replacement demand. As per estimates, there is a shortage of about 30,000 MVA of transformer capacity and all manufactures are overbooked. However, since new transformer manufacturing capacity does not take much time, the gap should be over in a year or two. Total requirement of transformers is expected to be 140,000 – 150,000 MVA within the next two years, against the current production of about 90,000 MVA.

5. Engineering D I Pipes

Ductile Iron is one of the most commonly used pipe material in modern society. It is preferred over cast iron pipes, concrete pipes and HDPE Pipes due to its superior properties and hygienic qualities. Today Ductile iron pipe is used worldwide for transportation of raw and potable water, sewerage, gas, slurries and process chemical. The main advantages are its superior strength, machinability, corrosion resistance, toughness and ductility. There is a huge demand for such pipes in the country on account of growth of cities and infrastructure. There is a good demand in gulf and other countries also. The company started manufacturing this product recently and in a short time its product is well accepted by the leading customers.

B. Special Steel Division

1. Billet / Construction (TMT) Steel Division

The company has set up a continuous TMT bar mill to supply high quality TMT bars for construction and infrastructure projects. Within a short time, the TMT Bars of the company have started commanding a premium in the market due to its superior shape and quality and better mechanical and metallurgical properties. The product is BIS certified and the company is approved supplier for many prestigious projects. The company has already set up the facility and its capacity is being expanded to 150000 Tons per annum.

2. Stainless Steel Division

The capital equipment division of the company has been recognized as a leading supplier of metal refining converters for stainless steel making. Its equipment is being used by all the major stainless steel producer of the country and more than 50% of country's stainless steel is produced on Subject equipment. Over the years, the company has been selling its equipment and also know how for the manufacture of stainless steel. The company has now set up a most modern plant for production of stainless steel and intends to cater to sophisticated stainless steel customers, both in India and abroad. The capacity of the plant is 36000 Tons per annum. Stainless Steel is growing at a much faster rate than normal steel. The growth in stainless steel is in excess of 12% and the projections are that it will grow at 14%. Stainless Steel is a very versatile material, and though clubbed with steel, it is an engineering material with very wide applications. The uses of stainless steel are in utensils, cutlery, consumer durables, fasteners, FMCG goods, industrial applications, power sector, oil sector, chemical plants etc. It is also widely used worldwide in construction of airports, hotels and other infrastructure projects. India is fast emerging as a leading supplier of stainless steel to many western countries including USA. Subject has the know how and capability to supply quality stainless steel, cateringto international specifications. Its location at Kutch will give it an advantage in reaching its products in international markets.

C. Electric Vehicle Division :

The competence and expertise of the company in power electronics encouraged the company to enter the market of electric vehicles. After an R&D effort of more than 3 years, the company has developed and launched electric scooters and electric bikes under the category of Yo Bykes. Yo Bykes (Electric Bikes), havestarted doing very well and the sales are increasing steadily. The product was launched in Feb 2006. Besides Electric Two Wheelers, the company will shortly launch Electric Three Wheelers. The Company is also developing Hybrid Electric Bus. The advantage of these vehicles are their low operating costs and virtually no pollution.

YObykes operates on a different concept. They operate with lead acid sealed batteries. Battery's power is fed to an electric motor through electronic controller. Speed of motor is controlled through electronic controller by accelerator handle.YObykes do not have petrol engine, gearbox, carburetor, clutch, kick, silencer etc. In the absence of these components there is no major maintenance in the vehicles and there are no moving parts accept the motor. Therefore efficiency of YObykes is extremely high. They are pollution free. They are silent in operation and give a feel of smooth driving.

The battery box and the motor are water proof. There will be no problems using these vehicles during rains. Tyres used in these vehicles are no different than which are used in ordinary vehicles so they can be repaired easily by conventional ways.

Rising oil prices, environmental issues and development of sophisticated technology has led to substantial growth in electric vehicles. Electric Vehicles industry is large and prosperous

with USD 31 bn sales globally in 2005 excluding electric toys. It is growing strongly and, by 2015, the Electric Vehicles market is expected to be 7.3 times the value in 2005.

In the last 5 years the demand for electric vehicles in China has witnessed an average growth of more than 73% CAGR. Also, battery-run-two-wheelers are quite popular in Japan and Korea. These Low speed Battery Operated Scooters do not require Driving License or RTO Registration as vehicles having speed limitation of 25 KMPH are exempt from above as per Indian Motor Vehicle Act. Looking at the success of low speed Electric Scooters, the company is now expanding its products and Electric Vehicle Division. The company has already Launched a high speed Electric Scooter, The Company also has developed Electric Three Wheeler. A prototype of the same has also been given to ARAI for approval. The company has made two prototypes of Hybrid Electric Bus which is under testing. For this project the company has entered into a MOU with MERKAVIM of Israel for supplying technical know how.

MAN POWER DETAILS

Division / Category	No As on April 01,2007	Additions During the year	Strength as on Mar31,2008
ENGG DIVISION
Sr. Managerial	27	0	27
Managerial	153	22	175
Supervisory	82	10	92
Technicians/Foremen	9	0	9
Workers	41	0	41
Total	312	32	344
EV DIVISION
Sr. Managerial	7	10	17
Managerial	106	14	120
Supervisory	70	18	88
Technicians/Foremen	0	0	0
Workers	0	0	0
Total	183	42	225
STEEL DIVISION
Sr. Managerial	29	7	36
Managerial	82	16	98
Supervisory	122	70	192
Technicians/Foremen	10	2	12
Workers	74	62	136
Total	317	157	474
ALL DIVISION
Sr. Managerial	63	16	80
Managerial	341	52	393
Supervisory	274	98	372
Technicians/Foremen	19	2	21
Workers	115	62	177
Total	812	230	1043

The female employees are very small and the company is encouraging qualified females to join the work force. As on date, the company has 10 female employees. In addition to the above strength, the company also engages contract workers, from time to time, to take care of the requirements of projects and operations.

Export Sales:

The break of domestic and export sales for the last three years are given below:

Particulars	2007-08 Rs. Millions	2006-07 Rs. Millions	2005-06 Rs. Millions
Domestic sales	11609.34	6556.46	3036.11
Exports
Exports Sales	1490.23	515.14	411.10
Deemed Export Sales	154.01	176.19	0.000
Total Exports	1644.24	691.33	411.10
Total	13253.58	7247.79	3447.21

Balance sheet Analysis:

Net Worth

The net worth of the company for Mar 08, Mar07 and Mar06 are compared below.

Particulars	2007-08 Rs.Millions	2006-07 Rs. Millions	2005-06 Rs. Millions
Equity share capital	109.760	91.350	47.660
Preference shares	120.000	120.000	120.000
Warrants/ Application Money	30.000	58.500	150.320
Reserves	3587.600	1918.200	269.170
Total Net Worth	3847.360	2188.050	587.150
Deferred Tax Liability	521.550	255.670	142.870
Net Worth Incl. DTL	4368.900	2443.720	730.020

Segment Capital Employed:

The following table gives divisional balancesheet as at Mar 31, 2008 (Rs. Millions)

Particulars	Engineering	Steel	EV	Total
Sources of Funds
Shareholders Funds	837.900	2368.580	640.870	3847.350
Deferred Tax Liability	28.880	478.930	13.740	521.550
Sub Total	866.780	2847.510	654.610	4368.900
Loan Funds
Term Loans	0.000	3493.430	13.890	3507.320
Unsecured Loans	680.770	1716.830	76.000	2473.600
Working Capital Loans	197.690	1962.820	148.730	2309.240
Total Loans	878.460	7173.080	238.620	8290.160
Current Liabilities and Provision	406.290	2407.110	84.340	2897.740
Total Sources	2151.530	12427.700	977.570	15556.800
Application of funds
Block
Fixed Assets	342.070	5672.520	162.770	6177.360
Capital work in progress	0.000	1657.170	0.000	1657.170
Accrued Depreciation	105.550	520.940	7.970	634.460
Net Block	236.520	6808.750	154.800	7200.070
Investments	0.180	0.650	20.410	21.240
Current Assets and Misc.	1914.830	5618.300	802.360	8335.490
Total Application	2151.530	12427.700	977.570	15556.800

Profit and Loss A/c :

The Profit and Loss Statement of the two Chinese Susidiaries is given below:

Particular	Jinhua Indus (Motor Plant)	Jinhua Jahari (Component Sourcing)	Combined (Rs. Millions)
Income
Sales	53.460	104.260	157.720
Other Income	0.620	5.870	6.490
Total	54.080	110.130	164.210
Expenditure
Material Cost	54.090	95.310	149.400
Manufacturing Expense	0.290	0.060	0.350
Employee Cost	3.180	0.970	4.150
Administrative Expense	3.690	2.720	6.420
Financial Expense	0.030	0.120	0.150
Total Expense	61.280	99.190	160.470
PBDT	7.200	10.940	3.740
Depreciation	0.420	0.010	0.430
Provision for Tax	0.000	1.440	1.440
Net Profit	(7.620)	9.490	1.870

Balance Sheet :

The balancesheet of the two Chinese subsidiaries is given below:

Particular	Jinhua Indus (Motor Plant)	Jinhua Jahari (Component Sourcing)	Combined (Rs. Millions)
SOURCES OF FUNDS
Shareholders Funds
Equity Share Capital	20.560	0.000	20.560
Less: Investment in Jinhua Jahari by Jinhua Indus	(5.410)	5.410	0.000
Reserves and Surplus	(7.610)	9.490	1.880
Total	7.540	14.900	22.440
Loans Funds	21.760	13.430	35.190
Total Sources	29.300	28.330	57.630
Application of Funds
Block
Gross Block	21.370	0.340	20.710
Depreciation	0.420	0.010	0.430
Net Block	19.950	0.33	20.280
Current Assets, Loans and Advances
Inventories	1.060	0.000	1.060
Debtors	0.000	0.000	0.000
Cash and Bank	0.680	1.540	2.220
Loans and advances	7.610	27.900	35.510
Current Assets	9.350	29.440	38.790
Current Liabilities	0.000	1.440	1.440
Net Current Assets	9.350	28.000	37.350
Total Application	29.300	28.330	57.630

FIXED ASSETS:

· Free hold land

· Lease hold land

· Building

· Plant and Machinery

· Furniture and Fixtures

· Vehicles

CONTINGENT LIABILITIES:

The Company is liable for following contingent liabilities:-

· Disputed Income Tax liability of Rs. Nil (Rs. 5.38 Millions Previous Year).

· Disputed Custom Duty liability of Rs. Nil (Rs. 19.57 Millions Previous Year).

· Guarantees / Counter guarantees (including un-utilized Letters of Credit) issued Rs. 488.29 Millions (Rs. 373.95 Millions in Previous year).

· Estimated amount of contracts remaining to be executed on capital account and not provided for Rs.

483.11 Millions. (P.Y. Rs. 30.07 Millions.).

· The company is contingently liable for the pending disputed labour and other matters, amount is Rs.

6.94 Millions (P.Y. Rs. 6.94 Millions).

· The company has executed Legal Undertaking Bond to pay Central Excise Duty (Terminal Excise

Duty), levies and liquidated damages payable, if any, in respect of imported and indigenous capital

goods and stores and spares consumed duty free, in the event that certain terms and conditions are

not fulfilled. In this regard aggregate duty liability amount of Rs. 286.54 Millions as at March 31, 2008

(Previous Year: Rs. 310.99 Millions). Against these exports amounting to Rs. 2292.32 Millions

(previous year Rs. 2487.92 Millions) will have to be made within next 8 years from the installation of

Machinery.

Website Details Attached:

History

A dream of technocrat to serve Indian Steel Industry lead to Inception of Electrotherm (India) Limited, [ET].

At a time when capability of multinationals was the only excepted norm in India, subject ventured into manufacturing of equipment for melting metals. The MNCs were compelled to open local assembly shops and offer reasonable terms and better services. The customer experienced comfort of competition for the first time. This was just a beginning.

Promoters of Subject visualized this gap in technology and took upon itself indigenous development of Medium Frequency Induction Melting Furnace at a time when these furnaces were imported into India at exorbitant prices and also took upon itself servicing of induction furnace in far flung areas of the country.

Subject is working towards infusing diversity within the company as a part of its corporate culture and lays special emphasis on equal opportunity and fairness. The diversity element will play a vital role in building future needs to serve all parts of their highly diverse country as also the disurning entrepreneurs all over the world.

Subject has distinction of manufacturing 3 T to 20 T Medium Frequency Induction Melting Furnaces for first time in the country. On rough estimates, over 4 million MT of steel is melted in India on Subject furnaces.

Company Profile:

Subject as a trusted name in foundry and Steel Industry for providing unmatched technological leadership for nearly two decades. Subject is renowned for providing sophisticated technologies and offering customized metallurgical turnkey solutions irrespective of its nature, size and geographical boundaries. With the new liberalized environment that has seen a rise in the customer expectations for uncompromising quality products backed by cost effectiveness and reliability, Subject has marched ahead with impressive performance year after year. Today Subject does not confine itself to catering only to local patrons but to customers across the globe.

Subject caters to Ferrous and Non-Ferrous foundries and metal melting industry by manufacturing Medium Frequency Induction Melting Furnaces, Metal Refining Konverter, Induction Ladle Refining Furnace, Induction Heating/Hardening Equipments, Submerged Arc Furnace and a host of allied products.

Subject has achieved market leadership in its core products because of excellence and dedication towards continuous improvement. Today Subject has a clientele of over 750 installations. Subject has exported its products to Bangladesh, Ethiopia, Ghana, Greece, Kenya, Mauritius, Myanmar, Pakistan, Senegal, Sri Lanka, South Africa, Tanzania, Zimbabwe, The Middle East and some other East African Countries.

Subject is distinguished by the skill and depth of leadership /experienced team. Prime importance is given to prompt after sales service. Subject's operations are spread over 30 locations with 6 Regional Offices and offices at Australia, Bangladesh, Brazil and RSA. Subject’s strong sales and service network throughout India is manned by Metallurgical, Electrical and Electronics Engineers who are always on toes day in and day out to offer best in terms of application engineering and in time service to its customers. Their sales professionals are right there at the doorstep to offer best solution to any customized needs. This has made subject a distinctively real "A Solution Driven Company".

Research and Development has been the basic strength of the company right from the date of its inception. Subject takes into account the specific needs of steel industry and local ambient conditions in designing equipment. Subject’s pursuit for newer and better solutions has led to the development of sophisticated, rugged, efficient, and cost-effective and user friendly equipment for the metallurgical industry. Novel methods of producing steel are investigated with a view to drastically reduce the heat time and capital cost associated with the conventional processing methods. The efforts put in by the team is not gone unnoticed, subject has been conferred with 21 prestigious National awards.

"The urge to delve into future by developing equipment and process for tomorrow set new industry standards. Always a leader, all these efforts translated not only into enriched customer satisfaction but also ISO : 9001 certification by RWTUV Germany."

Mammoth infrastructure nearly two decades of experience in developing concurrent technologies and the ability to compete globally in the backdrop of boundaries business opportunities prompted subject to introspect and fine tune its activities. The result fine tuning and further expanding its reach by providing most modern technologies feat, man and material any where in the world in time.

Providing efficient, reliable products, more effective utilization of its highly trained and experienced manpower and to open up new vistas in the global market are now priorities on subject's agenda.

All said and done, subject has embarked on a revolutionary re-shaping of its future growth in the country and around the world.

Infrastructure

Subject's full-fledged state-of-the-art manufacturing and testing facilities are spread over an expansive area of 70,000 sq.mtrs at Palodia, on the outskirts of Ahmedabad. It has well equipped machine / assembly shops facilitated with the latest CNC machines and host of special purpose machines for better precision in machining and over all quality of its products.

Subject has implemented World Class Manufacturing concepts with focus on training and Continuous Improvement. Subject also has its own in-house competent information technology department to cater to the total needs of the company. "TUV CERTIFICATION BODY OF GERMANY" accredits this plant with ISO 9001 certification for well documented Quality Systems and Procedures and for practicing International Quality standards in every sphere of its activity.

Superior Standards; Ruthless Benchmarking

Subject believes in TQM (Total Quality Management) approach and therefore each and every component has to pass through stringent Quality Control procedure. At work in subject is a quality chain that binds all parts of their operations- from raw material sourcing to processing, from research and development to production, from stage wise quality inspection to delivery.

In fact, every time a customer sources a world class equipment from them, and they custom-design and deliver it to their satisfaction, that's not the end of the story for them. It's the beginning of a long and mutually rewarding industrial relationship. They continue to monitor the performance of the equipment through frequent client interactions and feedback. This enables them to continually upgrade their own abilities, and satisfy even the most demanding clients.

Subject takes pride of being the only company in India where in all electronics cards are manufactured in-house under stringent quality control and supervision of well -qualified staff. Once the Generator/Power Pack is assembled, testing is carried out on no-load condition before dispatch to ensure satisfactory functioning of the equipment. This results in shorter duration for erection and commissioning.

To ensure that visualized Quality is built into its products, subject has a well equipped Quality Assurance department manned by Mechanical and Electronics Engineers.

Subject’s works regularly undergo Statutory and Independent inspections by LLOYDS, UDHE, SGS, INSPECTORATE GRIFFITH, EIL ( ENGINEERS (INDIA) LIMITED).

The Quality Policy at subject dictates: "they are committed to customer satisfaction by providing cost effective, reliable products and services. For continuous improvement, they rely on training, design and development." This is a dictum at Et at every level.

ISO-9001 certification is taken by one and all in subject as an added responsibility to further its already stringent quality parameters in their organization at every level so that subject is always at the forefront in providing world last equipment.

Core Team

With the opening of barriers in international co-operation and implementation of new economic policy in India, there was a vast scope for industrial development in the country. Technically sound companies can go global and compete with international giants. subject also has been aspiring and striving for the same.

Being a research and development oriented company with future plans for backward and forward integration, subject has been recruiting Graduate/Post Graduate Engineers and Management students from prime institutes of India.

With qualified Electrical, Electronics and metallurgy Engineers, subject is able to offer the customers better productivity and value added products. Subject can take legitimate pride in the form of having the largest group of Metallurgical Engineers compared to any Metallurgical equipment manufacturer in India.

Subject Family comprises of professionals broadly categorized as follows:

60% of employees possess Engineering and/or Post-Graduate Qualification

Mechanical Engineers

08%

Metallurgical Engineers

07%

Electrical/Electronics Engineers

39%

Industrial Engineers

02%

Post Graduates

04%

Subject is working towards infusing diversity within the company as a part of its corporate culture and lays special emphasis on equal opportunity and fairness. The diversity element will play a vital role in building future needs to serve all parts of their highly diverse country as also the disurning entrepreneurs all over the world.

Milestones

1982 - Subject started as a servicing unit for Electrical and Electronic equipment.

1983 - Subject received its First Order of 350 KW/ 500 KG.

1984 - Designed and developed India's first Indigenous Solid State Generator of 1200 KW

1989 - Subject enters EXPORTS- Orders from Ethiopia and Bangladesh.

1992 - Developed and Commissioned India's first Integrated manufacturing line incorporating MF Induction Melting Furnace, Metal Refining Konverter and DC Ladle Refining Furnace at Viraj Alloys Limited.

1995 - Developed and Commissioned a 12MT MF Induction Melting Furnace, 15 MT Metal Refining Konverter and 18 MT Twin Electrode DC Ladle Refining Furnace at Stainless India Jodhpur, a project of Mukund India Limited.

1995 - Developed and commissioned the then Largest M.F. Induction Melting Furnace of the country at Shah Alloys Limited. (7500KW/15 MT).

1996 - Developed and Commissioned India's First Indigenous DC Arc Furnace of 22 MT.

1997 - Supplied three large MF Induction Melting Furnaces with DC Ladle Refining Furnace for world's largest billet manufacturing facility through the route of Induction Melting Furnace at M/s Vishwas Steels, Goa.

1999 - Developed and Commissioned Bent Rail Hardening System at Digvijay Steel Industries, Batala.

1999 - Developed and Commissioned India's Largest M.F. Induction Melting Furnace of 20 MT at Shah Alloys Limited.

2001 - 3rd Repeat order of 20 MT Induction Melting Furnace from M/s Shah Alloys Limited.

2001 - Designed developed and commissioned India's Largest Metal Refining Konverter of 50 MT for M/s Shah Alloys Limited.

2001 - Supplied 20 T furnace in record time of 40 days to Viraj Profiles Limited.

2001 - Supplied two melting furnaces to Thor Foundry in South Africa, who has been using equipment supplied by a multinational from USA for over two decades.

2002 - Order of India's first revolutionary Steel Making Cont-1-Fur of 4MW/10T at Twenty First Century wire Rods Limited.

2002 - Fastest Commissioning of 7.5MW/20T Induction Melting Furnace within 40 days at Viraj Profiles Limited.

2002 - First indigenous Induction Ladle Refining Furnace of 1MW/12T at R.L.Steel Limited.

2002 - First induction Ladle Furnace commissioned

2002 - First Continuous Induction Furnace CONTIFUR supplied - a revolutionary process for economical manufacture of steel. Power consumption and maintenance cost are much less compared to conventional steel making process and equipment.

Recognitions

1987 - Young Electronics Engineer of the year award at the hands of President Giani Zail Singh.

1989 - Special Recognition award for Indigenous Development of Technology instituted by SIDO, Ministry of Industries at the hands of President Shri Venkatraman.

1989 - Udyog Patra presented by the then Vice-President of India Shri S. D. Sharma

1990 - VASVIK Research Award for contribution in the field of Electrical Sciences and Technology.

1991 - FIE Foundation Award for eminence in the field of Engineering by Prime Minister Shri Chandra Shekhar.

1993 - IEEMA Award for indigenously developing India's 1st DC Arc Furnace.

1999 - Dhatunayak Award for Designing, Developing and Commissioning Largest MF Induction Melting Furnace of 20 MT capacity.

2000 - ISO 9001 Certification BY RWTUV GERMANY for establishing and practicing International quality standards.

2000 - Awarded by Institute Of Trade And Industrial Development for continuous developmental effort made by subject's team.

Awards

Ø IMM-Binatone Award

Ø Special recognition National Award Udyog Patra

Ø IEEMA Award

Ø Vasvik Research Award and Dhatu Nayak Award for designing State-of-the-art India's largest MF Induction Furnace for 20 MT And many more…

Product Profile:

Subject is a trusted name in foundry and steel industry for providing unmatched technological leadership for nearly two decades.

It caters to Ferrous and Non-Ferrous foundries and metal melting industry by manufacturing Medium Frequency Induction Melting Furnaces, Metal Refining Konverter, Induction Ladle Refining Furnace, Induction Heating/Hardening Equipments, Submerged Arc Furnace and a host of allied products.

Medium Frequency Induction Melting / Holding Furnace

Subject caters to ferrous and non-ferrous foundries and to all segments of steel industry (Mini Steel Plant and Alloy Steel Plant) by manufacturing Medium Frequency Induction Melting Furnaces ranging from 15 KW/30KG to 25 MW / 50MT.

Metal Refining Konverter (MRK)

MRK is an improved Air-Oxygen-Decarburisation (AOD) converter for making Stainless Steel
and Alloy Steels. It uses air and nitrogen to reduce..

Electric Arc Furnace (EAF)

Due to the fast escalating costs of raw material and electricity, it has become essential to adopt a process, which can compensate for high costs of these inputs...

Ladle Refining Furnace (LRF)

Ladle Refining of liquid is a proven technology to obtain clean steel. Subject offers Induction Ladle Refining Furnace for lower rating ranging from 0.5T to 20T and LRF with three electrodes...

Induction Heating and Hardening Equipment (IHH)

The front runners in indigenised induction technology, subject offers high precision customised Induction Heating and Hardening Systems for any specific needs Quick heat is...

Induction Ladle Furnace (INDUREF)

Lime based fluxes effectively desulphuries steel and prolonged degassing by argon purging gives metal properties similar to vacuum treated metal. It can be used with ..

Continuous Induction Furnace

(CUNT-I-FUR)

Continuous Induction Furnace has overall heat transfer effiency of more than 85% Lime and dolomite enables dephosphorization. Inductor lining life is more that 45 days. Carbon..

Research and Development

Subject offers customer-specific Technological Solutions with the support of Strong Research and Development (RandD) set-up. RandD has always been the main thrust for subject.

Mr.Mukesh Bhandari, CMD of the company, personally steers R and D activities through his highly professional and efficient management skills. Their RandD team consists qualified Metallurgists and Electronics wizards. Their in-house R and D Center is recognized by the Department of Science and Technology , Govt. of India

Extraordinary emphasis and value placed on R and D had not only delivered excellent results, but also earned accolades and distinction. Subject received National recognition for Excellence for in-house technology development. Vasvik Gold Medal recognized subject's research competence and proficiency. IEEMA, on the other hand, gave its award for the Best Indigenously developed product. These awards and recognitions are feathers in the cap of ET R and D. Dedicated R and D efforts have also lead them to many Firsts in India; part of the success story is described below.

Sales and Services:

Subject has wide spread Sales and Service Network with 26 Offices in India + offices at Australia, Bangladesh, Brazil and RSA. It is manned by well- qualified Metallurgical, Electronics and Electrical engineers who are on toes day in and day out to deliver pre and post purchase service.

Subject’s Engineers not only give in-time services to customers but also assist customers to help define their specific needs and increasing their productivity and efficiency.

A prompt and efficient service rendered by subject's Engineers has helped them to add more than 750 satisfied customers in their client list. subject has expanded its network to such an extent that every call is attended within 24 hours anywhere in India.

News Letter:

Transmitter to Steel

By Mukesh Bhandari,

Chairman and Managing Director

Electrotherm (India) Limited, 72, Palodia, Ahmedabad.

Objects and achievements giving satisfaction are unique in individuals. Mental faculty does not accept any level of achievement as a benchmark of satisfaction. The mind goes on searching for new avenues out of which satisfaction could be derived. This is a never ending process.., the way of life to any aspiring individual. This is the basic principle of development in any field; consider recycled paper or eco-friendly manure from food and agro waste, space shuttle or supersonic jet, the common factor is dissatisfaction or the urge to cross over to a new phase.

Engineer As A Tool

The society is not conscious about the role an individual plays in its development as a discipline. It looks towards the person as a tool whose contribution is not taken as that of an Engineer but as a man next door. Therefore, by and large the society considers an Engineer as a tool, which moulds and casts better living.

I am proud to be an engineer. I am proud to be an engineer because my mental faculty is a tool, which meets the needs of the society; the nation as a whole and above all, it gives me satisfaction to that extent.

Engineer Redefined

"Engineer", the term brings to mind a person who has acquired a degree in Engineering. The executive at the finance desk who crafts by sizing, exploring, addition, subtracting, scratching, scribbling and researching to arrive at most practical and balanced application of funds is also doing a sort of engineering. Similarly, a strategic planning done by a team, which may not comprise qualified engineers, is also doing a sort of engineering. A creative artist who designs the ads or s publicity material or an event manager is an engineer in effect.

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.48.68
UK Pound	1	Rs.84.37
Euro	1	Rs.65.70

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	8
--PROFITABILIRY	1~10	6
--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	YES
--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.	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