MIRA INFORM REPORT

Report Date :

28.12.2011

IDENTIFICATION DETAILS

Name :	SOVEREIGN TECH ENGINEERING SERVICES PRIVATE LIMITED
Formerly Known As :	VIRPHA LABORATORIES PRIVATE LIMITED
Registered Office :	14, Mahinder Chamber Swaman Tukaram Patil Marg, Chembur, Mumbai-400071, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	08.04.1986
Com. Reg. No.:	11-39496
Capital Investment / Paid-up Capital :	Rs.9.606 Millions
CIN No.: [Company Identification No.]	U24230MH1986PTC039496
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer, Exporter and Importer of Coolant Filtration Systems
No. of Employees :	50 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (45)

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

Maximum Credit Limit :	USD 240000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Trade relations are 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.

INFORMATION PARTED BY

Name :	Mr. Ashish Shah
Designation :	Deputy General Manager Finance
Date :	27.12.2011

LOCATIONS

Registered / Corporate Office :	14, Mahinder Chamber Swaman Tukaram Patil Marg, Chembur, Mumbai-400071, Maharashtra, India
Tel. No.:	91-22-67973259/ 260
Fax No.:	91-22-67987499
E-Mail :	ashishshah@sovereigntech.in marketing@sovereigntechindia.com
Area :	2000 Sq. ft
Location :	Owned
Factory 1 :	A-515, TTC Industrial Area, MIDC, Mahape, Navi Mumbai, Maharashtra, India
Tel. No.:	91-22-56147556/ 57
Area :	9000 sq ft
Location :	Owned

DIRECTORS

AS ON 30.09.2011

Name :

Mr. Sarvanand Madhukar Bhujle

Designation :

Managing Director

Address :

3^rd Floor, 14, Avanti Co-Operative Housing Society, Deonar Baug, Off S. T. Road, Near Datta Guru Society, Deonar, Mumbai- 400088, Maharashtra, India

Date of Birth/Age :

07.03.1955

Date of Appointment :

08.04.1986

DIN No.:

00302577

Other Directorship :

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U24230MH1986PTC039496	SOVEREIGN TECH ENGINEERING SERVICES PRIVATE LIMITED	Managing director	28/09/2011	8/4/1986	Active	NO

Name :

Mr. Aditya Sarvanand Bhujhle

Designation :

Director

Address :

14, Avanti C.H.S. Limited, Deonar Baug, Deonar, Mumbai – 400088, Maharashtra, India

Date of Birth/Age :

16.03.1988

Date of Appointment :

17.03.2006

DIN No.:

00302636

Name :

Mr. Vimal Madhukar Bhujle

Designation :

Managing Director

Address :

Usha Co-Operative Housing Society Limited, Opposite Portuguese Church, College Lane, Dadar (West), Mumbai-400028, Maharashtra, India

Date of Birth/Age :

13.12.1923

Date of Appointment :

08.04.1986

DIN No.:

00575115

KEY EXECUTIVES

Name :	Mr. Ashish Shah
Designation :	Deputy General Manager Finance

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2011

Names of Shareholders	No. of Equity Shares Held	No. of Preference Shares Held
Vimal Madhukar Bhujle	191700	--
Sarvanand Madhukar Bhujle	768295	4
Aditya Sarvanand Bhujle	5	--
Vanita Sharma	--	1
Sindhu Sasi	--	1
Total	960000	6

AS ON 30.09.2011

Equity Shares Break up

Category	Percentage
Directors or relatives of directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer, Exporter and Importer of Coolant Filtration Systems

Products :

Products Description	Items Code No.
Filter Systems	84211999
Filter Paper	48232000
Lubricants	34029099

· High Performance Coolants

· Coolant Filter Systems

· Filter Media

· Coolant Pumps

· High Pressure Nozzles

Exports :

Products :

Coolant Filtration Systems

Countries :

· Germany

· Sri Lanka

Imports :

Products :

Raw Material

Countries :

· Germany

· US

Terms :

Selling :

L/C, Cash and Credit

Purchasing :

L/C, Cash and Credit

PRODUCTION STATUS (AS ON 31.03.2010)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Filter Media	Sq. Mtr.	NA	NA	250734
Filter Systems	Nos.	NA	NA	119
Lubricants	Kg	NA	NA	7879

GENERAL INFORMATION

Suppliers :

· Rajanane Industry Private Limited

· Advance Colling Systems

Customers :

End Users and OEM’s

· Tata Group

· Bharat Forge Limited

· JCB India Limited

No. of Employees :

50 (Approximately)

Bankers :

· Bank of India,

61-A, Gokhala Road North, Dadar (West), Mumbai-400028, Maharashtra, India

· HDFC Bank

Facilities :

Secured Loans	31.03.2011	31.03.2010
	(Rs. In Millions)
Term Loan from Bank of India, Dadar (West) Branch
Term Loan – II – Factory (Secured by Mortgage of Land and Building at Mahape and personally guaranteed by directors of the company)	0.459	2.471
Term – Guest House (Secured by Mortgage of Guest House at Vashi and Land personally guaranteed by directors of the company)	24.865	30.599
Term Loan – Mahape New Factory (Secured by Mortgaged of Land and Building at Mahape A-515/1 and personally guarant4ed by directors of the company	5.052	0.000
Term Loan from Chola Mandalam (Secured by Mortgage of Personal Property of Managing Directors at Chembur)	3.125	3.804
Cash Credit Account with Bank of India, Dadar (West), Branch (Secured by hypothecation of Stocks and Receivable and personally guaranteed by directors of the company	24.089	20.051
Vehicle Loan from various Banks -Bank of India (Maruti Alto) (Secured by hypothecation of Vehicle) - HDFC Bank Limited (Maruti Swift) (Secured by hypothecation of Vehicle) - HDFC Bank Limited (Maruti Swift) (Secured by hypothecation of Vehicle)	0.179 0.273 0.273	0.236 0.398 0.398
Total	58.315	57.957
Unsecured Loans	31.03.2011	31.03.2010
	(Rs. In Millions)
From Directors and Shareholders	10.120	9.260
Inter Accured and Due	0.265	0.000
Total	10.385	9.260

Banking Relations :	--
Auditors :
Name :	Gokhale and Sathe Company Chartered Accountant
Address :	302/303, Udyog Mandir No. 1 7-C Bhagoji Keer Marg, Mahim, Mumbai – 400016, Maharashtra, India
Tel No.:	91-22-43484242
Fax No.:	91-22-43484241/ 51
PAN No.:	AAAFG4990K
Email :	office@gokhalesathe.in
Memberships :	Indo-German Chambers of Commerce

CAPITAL STRUCTURE

(AS ON 31.03.201)

Authorised Capital :

No. of Shares	Type	Value	Amount
995000	Equity Shares	Rs. 10/- each	Rs. 9.950 Millions
50	8% Non Cumulative Redeemable Preference Share	Rs. 1000/-each	Rs. 0.050 Million
	Total		Rs.10.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
960000	Equity Shares	Rs. 10/- each	Rs. 9.600 Millions
6	8% Non Cumulative Redeemable Preference Share	Rs. 1000/-each	Rs. 0.006 Million
	Total		Rs.9.606 Millions

NOTE

1) Of the Above 880,000 Equity shares of Rs. 10/- each have been issued as fully paid bonus shares by capitalization of the general reserve.

2) Preference Share would be redeemed at the option of the company within maximum tenure of 20 year from the date of issue of the share

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		9.606	9.606	9.606
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		51.012	40.295	38.198
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		60.618	49.901	47.804
LOAN FUNDS
1] Secured Loans		58.315	57.957	63.849
2] Unsecured Loans		10.385	9.260	9.145
TOTAL BORROWING		68.700	67.217	72.994
DEFERRED TAX LIABILITIES		0.000	0.011	0.000
TOTAL		129.318	117.129	120.798
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		73.003	73.583	75.848
Capital work-in-progress		25.663	11.768	4.650
INVESTMENT		0.000	0.000	2.980
DEFERREX TAX ASSETS		1.976	0.000	0.045
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	22.049	17.047	20.698
	Sundry Debtors	42.036	21.849	11.547
	Cash & Bank Balances	4.510	8.624	3.624
	Other Current Assets	0.091	0.072	0.143
	Loans & Advances	5.466	4.896	7.699
Total Current Assets		74.152	52.488	43.711
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	34.835	18.043	6.005
	Other Current Liabilities	1.727	1.543	0.215
	Provisions	8.914	1.124	0.216
Total Current Liabilities		45.476	20.710	6.436
Net Current Assets		28.676	31.778	37.275
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		129.318	117.129	120.798

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		TOTAL (A)	130.666	81.179	79.000
Less	EXPENSES
		TOTAL (B)	97.206	62.099	62.410
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		33.460	19.080	16.590
Less	FINANCIAL EXPENSES (D)		8.380	7.710	8.180
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		25.080	11.370	8.410
Less/ Add	DEPRECIATION/ AMORTISATION (F)		6.180	6.110	6.410
	PROFIT BEFORE TAX (E-F) (G)		18.900	5.260	2.000
Less	TAX (H)		6.510	2.210	0.910
	PROFIT AFTER TAX (G-H) (I)		12.390	3.050	1.090
Add	PRIOR YEAR INCOME		0.000	0.210	0.000
Less	PRIOR YEAR TAX ADJUSTMENT		0.000	0.050	0.000
Less	PROPOSED DIVIDEND AND TAX		1.680	1.120	0.110
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		20.500	18.410	17.430
Less	APPROPRIATIONS
		Transfer to General Reserve	1.500	0.000	0.000
	BALANCE CARRIED TO THE B/S		29.710	20.500	18.410
	EARNINGS IN FOREIGN CURRENCY		4.510	2.140	2.517
	IMPORTS VALUE		24.970	13.698	20.359
	Earnings Per Share (Rs.)		12.91	3.18	1.14

Expected Sales (2011-12): Rs.180.000 Millions

The above information has been parted by Mr. Ashish.

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	9.48	3.76	1.38
Return on Total Assets (PBT/Total Assets}	(%)	12.84	4.17	1.67
Return on Investment (ROI) (PBT/Networth)		0.31	0.11	0.04
Debt Equity Ratio (Total Liability/Networth)		1.88	0.44	0.13
Current Ratio (Current Asset/Current Liability)		1.63	2.43	6.79

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS:

Particulars	31.03.2011	31.03.2010	31.03.2009
	(Rs. In Millions)
Sundry Creditors
-Due to Micro and small Enterprises	1.379	1.271	0.005
Other Creditors
- For Goods and Services	17.771	11.578	2.897
- For Expenses	12.550	2.467	2.843
- For Capital Goods	0.196	0.335	0.000
- For Other	2.939	2.392	0.260
Total	34.835	18.043	6.005

Check list by info Agents	Available in Report (Yes/ No)
Year of Establishment	Yes
Locality of the Firm	Yes
Constitution of the Firm	Yes
Premises details	Yes
Type of Business	Yes
Line of Business	Yes
Promoter’s Background	-------
No. of Employees	Yes
Name of Person Contacted	Yes
Designation of Contact person	Yes
Turnover of Firm for last two years	Yes
Profitability for last three years	-------
Reasons for variation <> 20%	-------
Estimation for coming financial year	Yes
Capital in the business	Yes
Details of sister concerns	No
Major Suppliers	Yes
Major Customers	Yes
Payments Terms	Yes
Export/ Imports Details (If applicable)	Yes
Market Information	-------
Litigations that the firm/ Promoters Involved in	-------
Banking details	Yes
Banking Facility Details	Yes
Conduct of the Banking Account	-------
Buyer visit details	-------
Financials, if provided	No
Incorporation details is applicable	-------
Last Accounts filed at ROC	-------
Major Shareholders, if available	-------

PERFORMANCES OF THE COMPANY

Just coming out of recession this year, the company has achieved the highest sales of MINR 126.33. Sincere complements to Team Sovereign Tech!! This Accomplishment was mainly on account of Improvement in Market situation. The major performer during the year was sovereign Kombo, a products designed by Sovereign Tech and Introduced in the market in the beginning of the year which was well accepted by the customers.

Overall year 2010-11 re-established the sales and profit after two years of slow down.

EXPANSIONS

Considering the delay in development of infrastructure by MIDC at Mangaon, the Company has procured a small plot of 635 Sq Mtr adjoining to the present factory at A-515, MIDC, Mahape, Navi Mumbai. The Company was sanctioned a Term Loan of MINR 21.40 for the said purpose. However, due to procedural and documentation delay, the project has got delayed and now they propose to start the commercial production by April 2012.

MAJOR ACHIEVEMENT

The Company introduced an internally designed novel product "Sovereign Kombo" which is an "Intelligent high Performance Coolant delivery System": This product "Sovereign Kombo" has well met with its claim of being the Single Most Productivity Tool for High Speed Machining at every customer site. Thus, leading to its popularity and acceptance. In the very first year, they have achieved a Net Sales of MINR 20.57.

The Company has also signed a Technical Collaboration Agreement with Jorgensen Conveyors Inc, USA for manufacturing and marketing of Chip Conveyors in India. The initial response for the said product is very encouraging.

TRADE REFERENCES:

· Tata Group

· Bharat Forge Limited

· JCB India Limited

· Rajanane Industry Private Limited

· Advance Colling Systems

FORM 8:

Corporate identity number of the company	U24230MH1986PTC039496
Name of the company	SOVEREIGN TECH ENGINEERING SERVICES PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	14 Mahinder Chamberswaman Tukaram Patel Marg, Chembur, Mumbai – 400071, Maharashtra, India marketing@sovereigntechindia.com
This form is for	Creation of charge
Type of charge	Immovable Property Any Interest in Immovable Property
Particular of charge holder	Bank of India, 61 - A, Gokhale Road North, Dadar West, Mumbai – 400028, Maharashtra, India dadarw.MumbaiSouth@bankofindia.co.in
Nature of instrument creating charge	Oral Assent in Respect of the Equitable Mortgage
Date of instrument Creating the charge	17.08.2011
Amount secured by the charge	Rs.31.400 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest: 3.75% over base rate (OBR) + 1% Tenor premium presently 15.50% p.a. with monthly rests. Terms of Repayment: 77 monthly installments thus: Feb. 2011 to Jan 2013 - 24 installments of Rs.0.150 Million, Feb. 2013 to Mar 2014 - 14 installments of Rs. 0.400 Million, April 2014 to Mar. 2016 - 24 installments of Rs.0.500 Million, April 2016 to December 16 - 9 installments of Rs.0.600 Million, Jan. 2017 to Jun. 2017 06 installments of Rs.0.800 Million i.e. in Rs Millions: 3.600 + 5.600 + 12.000 + 5.400 + 4.800 = Rs.31.400 Millions. Margin : 20% Extent and Operation of the charge : Charge of Equitable Mortgage by deposit of title deeds of immovable Property described in column no. 15 to secure Term Loan of Rs.31.400 Millions plus interests, costs, charges expenses etc. as principal security.
Short particulars of the property charged	Immovable properties at Plot No. A-515/1 TTC Industrial Area, MIDC, Mahape, Navi Mumbai with leasehold tenure and comprising land and buildings, other structures, fixtures and fittings, errected or to be erected or installed there on.

FIXED ASSETS:

· Leasehold Land

· Factory Building

· Guest House

· Machinery

· Electrical Fitting

· Tools and Equipments

· Office Equipments

· Air Conditioner

· Furniture and Fixtures

· Computers

· Motor Car

· Bicycle

· Computer Software

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.52.89
UK Pound	1	Rs.82.71
Euro	1	Rs.69.15

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--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		45

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.