MIRA INFORM REPORT

Report Date :

25.08.2011

IDENTIFICATION DETAILS

Name :	STERLING STONEX PRIVATE LIMITED
Registered Office :	2-98/3, 10-B, Kakatiya Nagar, Habsiguda, Hyderabad – 500 007, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	04.09.1995
Com. Reg. No.:	01-21590
Capital Investment / Paid-up Capital :	Rs.7.500 Millions
CIN No.: [Company Identification No.]	U14101AP1995PTC021590
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer and Exporter of Cut and Dressed, Polished Granite Dimensional Blocks and Memorials and Monuments.
No. of Employees :	More than 150 [Approximately]

RATING & COMMENTS

MIRA’s Rating :

Ba (48)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 300000
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INFORMATION PARTED BY

Name :	Mr. Soman
Designation :	Senior Manager Accounts Head
Contact No.:	91-9391026228
Date :	23.08.2011

LOCATIONS

Registered Office :	2-98/3, 10-B, Kakatiya Nagar, Habsiguda, Hyderabad – 500 007, Andhra Pradesh, India
Tel. No.:	91-40-2715 3096 / 2715 5201
Mobile No.:	91-9391026228 (Mr. Soman)
Fax No.:	91-40-2717 2188
E-Mail :	info@sterlingstonex.com n_muneyya@rediffmail.com
Website :	http://www.sterlingstonex.com
Area :	Owned
Factory :	Kondamadugu, Andhra Pradesh, India

DIRECTORS

As on 30.09.2009

Name :	Mr. Koneru Venkateswar Rao
Designation :	Managing Director
Address :	2-98/3, 10-B, Kakatiya Nagar, Habsiguda, Hyderabad – 500 007, Andhra Pradesh, India
Date of Birth/Age :	15.08.1962
Date of Appointment :	04.09.1995
Din No.:	00623241
Name :	Mr. Koneru Srinivas Rao
Designation :	Director
Address :	2-98/3, 10-B, Kakatiya Nagar, Habsiguda, Hyderabad – 500 007, Andhra Pradesh, India
Date of Appointment :	04.09.1995
Din No.:	006232243
Name :	Mr. Koneru Tirumala Rao
Designation :	Director
Address :	2-98/3, 10-B, Kakatiya Nagar, Habsiguda, Hyderabad – 500 007, Andhra Pradesh, India
Date of Birth/Age :	28.11.1970
Date of Appointment :	04.09.1995
Din No.:	00623247

KEY EXECUTIVES

Name :	Mr. Soman
Designation :	Senior Manager Accounts Head

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2009

Names of Shareholders	No. of Shares
Koneru Venkateswar Rao	80000
Koneru Srinivas Rao	70000
Koneru Tirumala Rao	70000
Koneru Padmaja	20000
Koneru Madhavi	20000
Koneru Vasundhara	20000
Koneru Prameela Devi	20000
Total	300000

As on 30.09.2009

Equity Share Breakup	Percentage of Holding
Category
Directors or relatives of directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer and Exporter of Cut and Dressed, Polished Granite Dimensional Blocks and Memorials and Monuments.
Exports :
Products :	Granite Dimensional
Countries :	UAE Gulf Countries
Terms :
Selling :	L/C / Cash and Credit
Purchasing :	Cash and Credit

GENERAL INFORMATION

Customers :

End Users

No. of Employees :

More than 150 [Approximately]

Bankers :

• State Bank of India, Nacharam Industrial Area Branch, Nacharam, Hyderabad-500076, Andhra Pradesh, India
• Allahabad Bank, Industrial Finance Branch, 115 Park Lane, Secunderabad-500003, Uttar Pradesh, India

Facilities :

Secured Loan	As on 31.03.2010 (Rs. in Millions)	As on 31.03.2009 (Rs. in Millions)
Loans and Advances from Banks
Term Loan (Secured by the machinery purchased under the loan)		2.512
Working Capital Loans (Secured all the current assets of the company)	36.612	26.223
Other Loans and Advances (Hire purchase loans – Secured by the assets acquired under the loan)		12.147
Total	36.612	40.882
Unsecured Loan
Short term Loans and Advances
From Directors	1.423	0.592
From Banks		0.472
From Others		0.992
Total	1.423	2.056

Banking Relations :	--
Financial Institution:	Srei Equipment Finance Private Limited, 'Vishwakarma', 86c, Topsia Road, Kolkata-700046, West Bengal, India
Auditors :
Name :	C.V. Ratnam Dhaveji Chartered Accountant
Address :	302, Usha Kiran Arkade, Ou Road, Vidya Nagar, Hyderabad-500044, Andhra Pradesh, India
Tel. No.:	91-40-27095500
Fax No.:	91-40-27095500
Group Companies :	K. Seshagiri Rao and Company · Sterling Granites KSR Infrastructure Private Limited

CAPITAL STRUCTURE

As on 30.09.2009

Authorised Capital :

No. of Shares	Type	Value	Amount
300000	Equity Shares	Rs.10/- each	Rs.3.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
300000	Equity Shares	Rs.10/- each	Rs.3.000 Millions

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
750000	Equity Shares	Rs.10/- each	Rs.7.500 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
750000	Equity Shares	Rs.10/- each	Rs.7.500 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		7.500	3.000	3.000
2] Share Application Money		0.700	0.144	0.144
3] Reserves & Surplus		68.933	63.119	56.748
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		77.133	66.263	59.892
LOAN FUNDS
1] Secured Loans		36.612	40.882	48.953
2] Unsecured Loans		1.423	2.056	2.148
TOTAL BORROWING		38.035	42.938	51.101
DEFERRED TAX LIABILITIES		4.738	4.024	0.000
TOTAL		119.906	113.225	110.993
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		71.149	65.305	62.088
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	17.920	31.898	32.991
	Sundry Debtors	26.338	23.791	20.483
	Cash & Bank Balances	3.957	0.305	1.208
	Other Current Assets	26.095	17.138	13.436
	Loans & Advances	0.270	4.650	4.250
Total Current Assets		74.580	77.782	72.368
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors
	Other Current Liabilities	11.776	18.544	13.450
	Provisions	14.047	11.318	10.013
Total Current Liabilities		25.823	29.862	23.463
Net Current Assets		48.757	47.920	48.905
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		119.906	113.225	110.993

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Export Sales	84.086	77.941	64.154
		Local Sales	37.422	29.879	41.790
		Excavation Receipts	0.000	3.461	5.524
		Gain / Loss on Exchange Fluctuation A/C	1.244	1.464	0.222
		Other Income	0.847	0.103	0.023
		TOTAL (A)	123.599	112.848	111.713
Less	EXPENSES
		Mining Expenses	29.505	41.938	43.602
		Manufacturing Expenses	50.242	41.050	52.940
		Administrative Expenses	5.245	5.214	5.987
		Selling Expenses	4.585	4.304	4.786
		Increase / Decrease in Stocks	13.978	1.093	(11.838)
		TOTAL (B)	103.555	93.599	95.477
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		20.044	19.249	16.236
Less	FINANCIAL EXPENSES (D)		5.317	6.839	4.088
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		14.727	12.410	12.148
Less/ Add	DEPRECIATION/ AMORTISATION (F)		4.592	4.276	3.240
	PROFIT BEFORE TAX (E-F) (G)		10.135	8.134	8.908
Less	TAX (H)		3.439	0.886	2.183
	PROFIT AFTER TAX (G-H) (I)		6.696	7.248	6.725
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		18.863	17.427	16.129
Less	APPROPRIATIONS
		Transfer to General Reserve	5.112	4.935	4.571
		Dividend	0.753	0.750	0.750
		Tax on Dividend	0.128	0.127	0.106
	BALANCE CARRIED TO THE B/S		19.566	18.863	17.427
	Earnings Per Share (Rs.)		8.93	24.16	22.42

Particulars	31.03.2011
Sales Turnover [Approximately]	111.700 [Due to Recession]

The above information has been parted by Mr. Soman.

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	5.42	6.42	6.02
Net Profit Margin (PBT/Sales)	(%)	8.34	7.54	8.41
Return on Total Assets (PBT/Total Assets}	(%)	6.95	5.68	6.63
Return on Investment (ROI) (PBT/Networth)		0.13	0.12	0.15
Debt Equity Ratio (Total Liability/Networth)		0.83	1.10	1.24
Current Ratio (Current Asset/Current Liability)		2.89	2.60	3.08

LOCAL AGENCY FURTHER INFORMATION

Bankers Charges Report as per Registry

This form is for	Creation of charge
Corporate identity number of the company	U14101AP1995PTC021590
Name of the company	STERLING STONEX PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	2-98/3, 10-B, Kakatiya Nagar, Habsiguda, Hyderabad – 500 007, Andhra Pradesh, India
Type of charge	Movable Property (not being pledge)
Particular of charge holder	Srei Equipment Finance Private Limited, 'Vishwakarma', 86c, Topsia Road, Kolkata-700046, West Bengal, India
Email	secretarial@srei.com
Nature of description of the instrument creating or modifying the charge	Deed of hypothecation. (LBA802).
Date of instrument Creating the charge	05.01.2011
Amount secured by the charge	Rs.17.600 Millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest 11.5 percent per annum. Terms of Repayment Amount repayable in 35 no. monthly installments. 1st installment of Rs.0.168 millions and balance 34 installments of Rs.0.609 millions each per month. Margin Rs.4.400 Millions Extent and Operation of the charge As per Deed of Hypothecation.
Short particulars of the property charged	I) 1 No. Tata 955 ALC Crane. (Within India). II) 1 No. Tata P and H 1055 BLC Crane. (Within India).

Fixed Assets:

· Land and Development

· Factory Building

· Plant and Machinery

· Electrical Equipment

· Office Equipment

· Vehicles

Web Details

Profile

S Rao and Company, the Hyderabad based power project contractors and heavy machinery hirers, founded in the late 1960s is one of the most respected companies in this field. The group diversified into granite mining in the mid 1980s with the founding of Sterling Granites.

Sterling Granites operates quarries of Vizag Blue, Indian Aurora, Black Galaxy and other colors. The rough blocks are exported to European and the East Asian markets.

In 1995 Sterling Granites entered the finishing goods market with the establishment of their granite processing unit Sterling Stonex Private Limited. The plant was set up with imported machinery in Nalgonda District about 35 kilometers from Hyderabad on a site of around 33,000 square yards (31,000 sq m.).

Management

The Company is promoted by experienced entrepreneurs Mr. K. Venkateswara Rao, Mr. K. Srinivas Rao and Mr. K. Tirumala Rao. All these have rich experience in various fields including material handling and civil contracts for more than 15 years. The background of the core promoters is given below:

K. Venkateswara Rao

K. Venkateswara Rao, aged about 47 years, is the Managing Director of the Company. He has an experience of over 15 years in various fields of business. He is a managing partner in M/S K. Seshagiri Rao and Company, Sterling Granites, KSR Infrastructures and he is the Managing Director of company. He is well acquainted with exporting Granite Blocks and overall in charge of marketing the products of the groups business.

K. Srinivas Rao

K. Srinivas Rao, aged about 44 years, is a mechanical engineer. He is a partner in M/S K. Seshagiri Rao and Company, Sterling Granites, KSR Infrastructures and he is the Executive Director of company. He is in charge of the quarrying operations of the Firm and highly experienced in this activity. Under his able guidance the group concerns have successfully carried out its quarrying operations in Tekkali and NIzamabad Districts in Andhra Pradesh and in Madhurai District of Tamilnadu.

K. Tirumala Rao

K. Tirumala Rao, aged about 38 years is also an engineering graduate. He is a partner in M/S K. Seshagiri Rao and Company, Sterling Granites, KSR Infrastructures, and a whole-time Director in company. He is in charge of production at the subject factory for monument processing near Bibinagar, Nalgonda District. He has visited Germany to obtain specialized training in the operation of the imported machinery for the processing facility of the Group Company.

Group Companies

K. Seshagiri Rao and Company

K S R and Company is the parent concern been established about four decades back and has been grown leaps and bounds through out the time. The firm is engaged in Material Handling, Excavation and Handling of Slag, Scrap, Skull Recovery in Steel Industries, Hiring of Heavy Machinery and Excavation contracts and in the Erection of Heavy Machinery/Equipment. It has been doing jobs for public sector giants like BHEL, NTPC, ONGC, Tamilnadu Minerals, Singareni Collieries etc and also for private sector majors like L and T, Reliance, Lanco, Jindal Steel Works and many reputed granite quarrying companies.

The Company is specialized in executing critical jobs for removal of hot slag recovery and scrap at steel plants. The fleet of machinery is continuously upgraded and enlarged, presently stand at a commendable 125 machines. The firm possesses varied machines, heavy cranes, excavators, Dumpers, earth moving equipment and compressors etc of different sizes and capacities. The firm enjoys high reputation with its bankers and financiers.

Sterling Granites

This Company is engaged in quarrying granite Raw Blocks. It is awarded long lease of granite mines in Nizamabad and Tekkali by Government of Andhra Pradesh for quarrying over an extent of 100 acres. Its entire turnover is through exports and is enjoying good market reputation overseas with reputed companies like Inbra, Eastern Granit, Tiger Stone etc.  Its performance has been excellent ever since it started operations.

It is successfully exporting sizeable amount of granite blocks every year, and earning valuable foreign exchange for the country.

KSR Infrastructure Private Limited

This company is taking up jobs for Excavation of Overburden with fleet of Heavy Earthmoving Machinery.

The Company is well experienced in removal of over burden and excavation as the group is into granite quarrying business for last 12 years with complete earthmoving machinery of the own.

They are at present executing power house package for Gammon India Limited at their site at Koldam NTPC, Himachal Pradesh.  The work of power house package involves excavation of unconsolidated, consolidated, rock, short Creting and Bolting. The work is being executed in a most systematic and professional way.  They have been rated as the best contractor by principal NTPC. The quantity involved are of almost 16 lacs cubic meter of excavation.  The complete quantum of work to be completed within a period of seven months.

They are also executing excavation of rock at approach channel in koldam site, Himachal Pradesh.  The work has been taken from Ital Thai Company, who are executing the Dam package at koldam site. The quantity involved is around 10 lacs cubic meter and the work is going to be completed within next three months.  

The Group has got excellent rapport with finance companies like ICICI, CITI Corp, ABN AMRO, and HDFC.  All these finance companies will be interested in funding for the purchase of heavy machinery at very short notice due to the excellent repayment credentials. They are also having high respect with the bankers State Bank of India, Nacharam branch with whom they are having the account from last 20 years.

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.45.69
UK Pound	1	Rs.75.29
Euro	1	Rs.65.77

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--CREDIT LINES	1~10	5
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		48

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	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
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.