MIRA INFORM REPORT

Report Date :

25.07.2011

IDENTIFICATION DETAILS

Name :	SHRIRAM EPC LIMITED
Registered Office :	Sigappi Achi Building, 4^th Floor, 18/3 Rukmini Lakshmipathi Road, Egmore, Chennai – 600 008, Tamil Nadu
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	12.06.2000
Com. Reg. No.:	18-45167
Capital Investment / Paid-up Capital :	Euro 7026204
CIN No.: [Company Identification No.]	L74210TN2000PLC045167
TAN No.: [Tax Deduction & Collection Account No.]	CHES20276E
PAN No.: [Permanent Account No.]	AAFCS1410C
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchange.
Line of Business :	To carry on the business as an Engineering and Procurement Contractors.
No. of Employees :	350 Approximately

RATING & COMMENTS

MIRA’s Rating :

A (62)

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 :	Euro 13201596
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a part of Shriram Group. It is an established company having fine track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to regular and as per commitments. The company can be considered good for normal 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

LOCATIONS

Registered Office :	Sigappi Achi Building, 4^th Floor, 18/3 Rukmini Lakshmipathi Road, Egmore, Chennai – 600 008, Tamil Nadu, India
Tel. No.:	91-44-49015678
Fax No.:	91-44-49015655
E-Mail :	investors@shriramepc.com suresh@shriramepc.com info@shriramepc.com sujasridharan999@rediffmail.com
Website :	www.shriramepc.com
Head Office :	No.9, Vanagaram Road, Ayanambakkam, Chennai - 600 095, Tamilnadu, India
Tel. No.:	91-44-26531592 / 3572 / 3313 / 3109
Fax No.:	91-44-2653 2780
Factory :	Located at · Puducherry · Chennai · Gummidipoondi · Umbergaon (Gujarat)
Branch Office :	104/1A, Sarat Bose Road, Kolkata - 700 026, West Bengal, India Tel : 91-33-30011800 / 1900 Fax : 91-33-30011942 Email : shriramepc_kol@vsnl.net Unit No.309-310-311, DLF City Court, Sikanderpur, Gurgaon-122002, Haryana, India Tel : 91-11-124-4001341/42/43/44 Fax : 91-11-124-4001345 Email : shriramepc@airtelmail.in Located at Mumbai, New Delhi, Beijing and Rotterdam
Overseas Office :	Netherland’s Office Shriram EPC Europe BV, 's-Gravelandseweg, 334 3125 BK, Schiedam Tel : +31(0)10-2350 900 Email : info@shriramepc.eu Website : www.shriram.eu Beijing Office Shriram EPC Beijing Office, (Yindu Xi Rui Mu Gongcheng Gongsi) Add.: Room 2426E, 24th floor, Building B, Wantong New World, No.2, Fuwai treet, Xicheng District, Beijing, China. 100037 Tel : 0086-10-68024682 Email : shriramepc.bj@gmail.com

DIRECTORS

Name :	Mr. Arun Duggal
Designation :	Chairman
Name :	Mr. T Shivaraman
Designation :	Managing Director
Name :	Mrs. Vathsala Ranganathan
Designation :	Director
Name :	Mr. S R Ramakrishnan
Designation :	Director
Name :	Mr. R Sundararajan
Designation :	Director
Name :	Mr. R S Chandra
Designation :	Director
Name :	Mr. Sunil Varma
Designation :	Director
Name :	Mr. S Krishnamurthy
Designation :	Director
Name :	Mr. K Madhava Sarma
Designation :	Director
Name :	Mr. Sunil K Kolangara
Designation :	Director
Name :	Mr. S Bapu
Designation :	Director
Name :	Mr. P D Karandikar
Designation :	Director
Name :	Mr. Amjad Shariff
Designation :	Joint Managing Director

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2011

Names of Shareholders	No. of Shares	Total Shareholding as a % of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	5019082	11.33
Bodies Corporate	12460123	28.12
Sub Total	17479205	39.44
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	17479205	39.44
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	1728407	3.90
Financial Institutions / Banks	317646	0.72
Foreign Institutional Investors	2889894	6.52
Sub Total	4935947	11.14
(2) Non-Institutions
Bodies Corporate	2828496	6.38
Individuals
Individual shareholders holding nominal share capital up to Euro 1562	1232652	2.78
Individual shareholders holding nominal share capital in excess of Euro 1562	445029	1.00
Any Others (Specify)	17394921	39.25
Clearing Members	16178	0.04
Directors & their Relatives & Friends	26240	0.06
Foreign Corporate Bodies	13481762	30.42
Hindu Undivided Families	39863	0.09
Non Resident Indians	44099	0.10
Trusts	3786779	8.54
Sub Total	21901098	49.42
Total Public shareholding (B)	26837045	60.56
Total (A)+(B)	44316250	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	44316250	-

BUSINESS DETAILS

Line of Business :

To carry on the business as an Engineering and Procurement Contractors.

Products :

Product Description	ITC Code
Wind Operated Electric Generators	3601
Engineering Construction Services	--

PRODUCTION STATUS AS ON 31.03.2010

Particulars	31.03.2010 Units Produced
	In Nos	In MWs
Wind Turbine Generators – 250 KW	48	12.00

The installed capacities have not been disclosed since they are variable subject to utilisation of manufacturing facilities given the nature of its operations.

GENERAL INFORMATION

Customers :

· Ahemedabad Urban Development Corporation 

· Birla White

· Chennai Petroleum Corporation Limited

· Cochin Refineries Limited

· Delhi Jal Board

· Kerala Feeds Limited

· Gujarat Water Supply and Sewerage Board

· Metallurgical and Engineering Consultants (India) Limited

· Indo Rama Synthetics (India) Limited

· Jindal Steel and Power Limited

· Laxmi Energy and Foods Limited

· Rashtriya Ispat Nigam Limited (Visakhapatnam Steel Plant)

· Sree Jayajothi Cements Limited

· Konkola Copper Mines plc, Zambia

· National Mineral Development Corporation

· Reliance Industries Limited

· Steel Authority of India Limited

· Karnataka Urban Infrastructure Development and Finance Corporation

· Bangalore Water Supply and Sewerage Board

· Orient Green Power Company Limited

· Tata Steel

· Tamilnadu Water Supply and Drainage Board

· Vedanta Group

· Prakash Industries Limited

No. of Employees :

350 Approximately

Bankers :

· Indusind Bank Limited

· Punjab National Bank

· The Hongkong And Shanghai Banking Corporation Limited

76, Cathedral Road, Chennai-600086, Tamilnadu, India

· Citi Bank Limited

· State Bank of India

Indian Bank, Thousand Light Branch, Kannammai Building, 611, Anna Salai, Chennai - 600 006, Tamilnadu, India

Facilities :

Secured Loans	As on 31.03.2010 In Euro	As on 31.03.2009 In Euro
Term Loans From
Banks	59015156	14912969
Financial Institutions	10936656	7811656
Interest accrued and due on Term Loans from Banks	337421	000
Cash Credit from Banks	8583875	14620875
Hire Purchase Finance	133938	178250
Total	79007046	37523750

Unsecured Loans	As on 31.03.2010 In Euro	As on 31.03.2009 In Euro
Commercial Paper $	15625000	000
Short Term Loans from a Bank	3949390	3951046
Total	19574390	3951046

$ Maximum amount outstanding during the year

Banking Relations :	--
Financial Institutions :	L and T Infrastructure Finance Company Limited
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Associates :	· Ennore Coke Limited · Shriram SEPL Composites Private Limited
Subsidiaries :	· Shriram EPC (Singapore) Pte Limited · Blackstone Group Technologies Private Limited · Chemproject Consulting Private Limited
Jointly controlled entity :	· Hamon Shriram Cottrell Private Limited · Leitner Shriram Manufacturing Co Limited
Enterprise over which Key Management Personnel is able to exercise significant Influence :	Orient Green Power Co Limited

CAPITAL STRUCTURE

As on 29.09.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
65000000	Equity Shares	0.16 Euro each	10400000
20000000	Convertible Preference Shares	0.16 Euro each	3200000
	Total		13600000

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
44316250	Equity Shares	0.16 Euro each	7090600

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
65000000	Equity Shares	0.16 Euro each	10400000
20000000	Convertible Preference Shares	0.16 Euro each	3200000
	Total		13600000

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
43913777	Equity Shares	0.16 Euro each	7026204

FINANCIAL DATA

[all figures are in Euro]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		7026204	6773265	6698093
2] Share Application Money		4406	000	27703
3] Employees Stock Options Outstanding		197531	373000	454937
4] Reserves & Surplus		58779843	52156641	46330031
5] (Accumulated Losses)		000	000	000
NETWORTH		66007984	59302906	53510764
LOAN FUNDS
1] Secured Loans		79007046	37523750	18047953
2] Unsecured Loans		19574390	3951046	000
TOTAL BORROWING		98581436	41474796	18047953
DEFERRED TAX LIABILITIES		4378328	2410625	886062
TOTAL		168967748	103188327	72444779
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		22139234	16096390	7227343
Capital work-in-progress		1703	552406	212109
INVESTMENT		32912937	26876906	15816625
DEFERREX TAX ASSETS		000	000	000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	27740937	12233859	7521437
	Sundry Debtors	130109703	76902750	48610015
	Cash & Bank Balances	27882500	5395031	22146515
	Other Current Assets	11015	8906	15906
	Loans & Advances	36685578	39016093	23149875
Total Current Assets		222429733	133556639	101443748
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	93541578	63523968	26456031
	Other Current Liabilities	13791312	8809078	21987828
	Provisions	1347640	1560968	3811187
Total Current Liabilities		108680530	73894014	52255046
Net Current Assets		113749203	59662625	49188702
MISCELLANEOUS EXPENSES		000	000	000
Other		164671	000	000
TOTAL		168967748	103188327	72444779

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Sales, Services and Work Bills	173518375	143557109	100984265
		Other Income	1752296	810734	451968
		TOTAL (A)	175270671	144367843	101436233
Less	EXPENSES
		Manufacturing, Construction and Operation Expenses	150393656	126286281	85852656
		Employee Costs	2803562	3158687	2492421
		Other Costs	3451406	2409390	2270703
		Preliminary Expenses	000	000	203
		TOTAL (B)	156648624	131854359	90615983
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		18622047	12513484	10820250
Less	INTEREST AND FINANCE CHARGES (D)		6518156	1695828	1820828
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		12103890	10817656	8999422
Less/ Add	DEPRECIATION/ AMORTISATION (F)		1616359	984671	435515
	PROFIT BEFORE TAX (E-F) (G)		10487531	9832985	8563907
Less	TAX (H)		3509360	3580360	3032876
	PROFIT AFTER TAX (G-H) (I)		6978171	6252625	5531031
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		14246593	9101312	3570281
Less	APPROPRIATIONS
		Proposed Dividend – 12%	823390	812796	000
		Dividend Tax	136750	138140	000
		Provision of dividend – 2008-09 including dividend tax for previous year	1546	000	000
		Transfer to General Reserve	174453	156406	000
	BALANCE CARRIED TO THE B/S		20088625	14246593	9101312
	EARNINGS IN FOREIGN CURRENCY		000	764734	847546
	IMPORTS
		Raw Materials and Components	337687	000	1928796
		Capital Goods	000	59484	95750
		Materials consumed in execution of Engineering construction contracts	20549968	12943015	525921
	TOTAL IMPORTS		20887656	13002499	2550467
	Earnings Per Share (Euro)		0.15	--	--

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	3.98	4.33	5.45
Net Profit Margin (PBT/Sales)	(%)	6.04	6.84	8.48
Return on Total Assets (PBT/Total Assets}	(%)	4.28	6.57	7.88
Return on Investment (ROI) (PBT/Networth)		0.15	0.16	0.16
Debt Equity Ratio (Total Liability/Networth)		3.13	1.94	1.31
Current Ratio (Current Asset/Current Liability)		2.04	1.80	1.94

LOCAL AGENCY FURTHER INFORMATION

OPERATING RESULTS AND PERFORMANCE

During the year the Company recorded a 21.41% growth in total income at 175270671 Euro from 144367843 Euro in the previous year. Profit before tax and extraordinary items at 10487531 Euro recorded a growth of 7.5% over the previous year (9832812 Euro).

Profit after tax at 6978171 Euro recorded a growth of 11.6 % over the previous year figure of 6252625 Euro.

BUSINESS OVERVIEW

The Company operates in two main segments; turnkey contracts and wind turbines. A brief review of the business in these segments is given below:

The turnkey contracts segment represents the Company’s engineering, procurement and construction projects business, which include renewable energy projects like biomass-based power plants, metallurgical and process plant projects and municipal services projects like water and waste water treatment plants, water and sewer infrastructure and pipe rehabilitation.

The Standalone order book was 186218750 Euro on March 31, 2010 and the Consolidated Order Book was 503328125 Euro on the same date. The Consolidated order book includes the following orders :

· An order from M/s PPS Enviro Power for installing WTGs of a capacity of 15 MW (1.5 MW * 10) in Tamil Nadu.

· An order from M/s T.S. Wind Power Developers, a Private wind park developer based out of Satara, Maharashtra for the installation of 30 MW of wind turbines.

· The unexecuted portion of the order amounting to 270312500 Euro from Bharat Wind Farms Limited, a subsidiary of the Company’s Associate - Orient Green Power Company Limited

The Board of Directors have recommended a dividend of Rs.1.20 per share. This translates into a payout of 953125 Euro including an amount of 136718 Euro as Dividend Distribution Tax.

Overall revenues from turnkey contracts increased by 21%, from 135697687 Euro in FY 2009 to Rs.162647093 Euro in FY 2010.

The Company’s Wind Turbine business comprises of sales and services of 250 kw class wind turbine generators to clients.

The wind turbine business revenue was 7859421 Euro in FY 2009 as compared to 10871281 Euro in FY 2010.

The order book for the turnkey contracts as on March 31, 2010 is 161235937 Euro.

JOINT VENTURES

HAMON SHRIRAM COTTRELL PRIVATE LIMITED (HSC)

The Company's joint venture HSC in the field of heat exchangers, cooling towers and air pollution control systems

have reported significant growth. The turnover of the Company has increased from 12391078 Euro to 17275562 Euro, an increase of 39.42 %.

The Company has bagged an order of 14062500 Euro from Mangalore Refinery and Petrochemicals Limited for setting up a Cooling Tower and cooling water treatment plant for phase III of the refinery project at Mangalore, Karnataka. This is by far the largest single order for the Company.

In order to reflect the joint venture status of HSC, the Company is consolidating HSC on a line by line basis as a JV and not as a subsidiary.

LEITNER SHRIRAM MANUFACTURING LIMITED (LSML)

During the year, due to the synergies in the business, better banking and operational facilities, the Company has merged the business of the marketing Company, Shriram Leitwind Limited with LSML.

LSML set up an art of facility at Gummidipoondi for the manufacture of the wind turbines and the trial production

commenced in March 2009, with the formal inauguration taking place in September 2009. During the year the Company was awarded orders for 45 MW of wind turbines worth 35937500 Euro.

During the year, LSML has reported a turnover of 57398437 Euro as compared to 7807578 Euro during the year 2009 with a loss of 546687 Euro as compared to 228984 Euro during the year 2009.

ENNORE COKE LIMITED (ECL)

The Company also holds 31.7% stake in ECL, a listed Company that is engaged in setting up at Haldia a plant to manufacture metallurgical coke and also a thermal power plant to convert the process heat into energy.

During the year ECL continued the implementation of Co generation Power Plant of 12MW capacity at Haldia and

also continues the implementation of the coke project. The Coke project has now commenced operation on two thirds of its capacity and is expected to achieve full capacity by the forthcoming year. ECL has already signed a Power Purchase agreement with West Bengal State Electricity Board. ECL has successfully started utilizing four more third party manufacturing units in the states of Gujarat / West Bengal/ Orissa / Jharkhand.

During the year, ECL had carried out significant volume of Exports to Pakistan and Durban as also USA. ECL has also commenced direct supplies to end users prominent amongst them are Tata Metalicks, Tata Steels, IDCOL, Kalinga, Narasingh Ispat, Maheswari Ispat and also foundries at Coimbatore and Belgaum.

ECL has shifted its registered office from Mumbai to Chennai after receiving all the statutory approvals.

During the year, ECL has reported a turnover of 58250109 Euro with a Profit after tax of 1443671 Euro, as compared to 15789171 Euro with a Profit after tax of 12203 Euro during the year 2009.

SHRIRAM SEPL COMPOSITES PRIVATE LIMITED (SSEPL):

The Company had entered into a MoU with certain specialists in the field to form SSEPL as a joint venture with the Company as the majority owner with a view to exploit opportunities in the area of manufacture of specialised GRP pipes and liners.

During the year SSEPL reported a satisfactory turnover of 4656781 Euro as against the previous year figure of 194968 Euro and a profit/loss of 982812 Euro against the previous year figure (29484 Euro).

MANAGEMENT DISCUSSION AND ANALYSIS: FY 2009-10

COMPANY OVERVIEW

Subject is a service provider of integrated design, engineering, procurement, construction and project management services for renewable energy projects, process and metallurgy and municipal services projects throughout India. The Company’s business is focused on providing integrated turnkey solutions for process and metallurgy plants (including thermal power plants), biomass- based power plants, water and waste-water treatment plants, water and sewer infrastructure and pipe rehabilitation.

Through its Subsidiaries and Associates the Company also manufactures / produces

· Wind Turbine Generators (“WTG”) of multiple capacities, viz 1.5MW and 250KW.

· Cooling Towers and Air Pollution Control Systems.

· GRP pipes and liners.

Subject has also entered into the following JVs / MoUs

· With North West Electric Power Design Institute (NWEPDI) of China to jointly bid for Thermal Power Plant projects in India.

· With Roberts and Schaefer of USA to set up Material Handling Equipments.

· With Envirotherm of Germany to offer their coal gasification technology.

Subject also holds interests in the following:

· 35.8% stake in Orient Green Power Company Limited – Owner and Operator of Renewable Energy Power Generation Projects.

· 31.7% stake in Ennore Coke Limited - leading Producer of Met Coke.

· 55% in Blackstone Group Technologies Private Limited, Design and Engineering Firm.

Subejct is headquartered in Chennai, Tamil Nadu and has offices in Mumbai, New Delhi, Kolkata, Beijing and Rotterdam. It has factories in Puducherry, Chennai, Gummidipoondi and Umbergaon (Gujarat).

THE MACRO-ECONOMIC SCENARIO

The fiscal year 2009-10 began on a very challenging note. The effects of the global financial crisis in the second half of 2008-09 continued to impact all global economies. However, the recovery during 2009-10 started off on a stronger note than anticipated earlier but is proceeding at different speeds in the various regions. In the developed economies, the recovery is expected to be prolonged, whereas many emerging economies have shrugged off the effects far quicker. Although governments of most nations stepped in with stimulus packages, it is the developing economies that have responded the best to government intervention. The global economy has made progress and there are signs of revival, viz., firming up of interest rates, an increase in the prices of commodities like oil, steel and base metals and return of production and trade. Meanwhile, public support of the financial sector has been crucial in breaking the negative feedback loop between the financial and real sectors.

Dr. Nouriel Roubini, New York University Economist, is of the opinion that H1CY10 should see more robust growth, largely on the back of lag effects of fiscal stimulus and the base turning favourable. The second half of CY10, however, is expected to see a slowdown in growth, consequent to the end of inventory restocking and reduced spending on the back of phase out of many of the specific fiscal schemes.

The IMF has noted the % change in world output in 2008 was +3.0% and it was -0.8% in 2009. The projection for

2010 is 3.9% and that for 2011 is 4.3%. The world trade volume % change (goods and services) is quoted at +2.8% in 2008 and -12.3% in 2009 whereas the prediction for 2010 is 5.8% and for 2011 it is 6.3%.

The IMF projected growth in emerging and developing economies to rise to about 6 % in 2010, following a modest

2 % growth in 2009. Growth performance in key emerging economies in Asia is leading the global recovery while a few advanced European economies and a number of economies in Central and Eastern Europe and the Commonwealth of Independent States are lagging behind. The Dubai World Event which brought to light the debt-laden Dubai State Corporation and ripple effects to credit downgrades for Greece and other European Nations can be expected to raise concerns about sovereign debt sustainability and will impact risk assessments, capital flows, and financial markets in 2010. The slow recovery in the developed world, for the better part of 2009-10, meant a low export recovery and a slowdown in financial flows for the developing economies. Yet, over the span of the year, the Indian economy posted a remarkable recovery in terms of overall growth figures and in terms of certain fundamentals, which justify optimism for the Indian economy in the medium to long term.

As per recent reports, the Indian Economy registered a growth rate of 7.4% for the year FY09-10, marginally ahead of the estimate of GDP growth of 7.2% for 2009-10, released by the Central Statistical Organisation (CSO). With the expected average annual compounded growth rate of 8.5%, India’s GDP is expected to be USD 1.4 trillion by 2017 and USD 2.8 trillion by 2027. The service sector is expected to contribute about 50 % of India‘s GDP while the industrial and agricultural sectors are expected to contribute 25% each.

INDUSTRY STRUCTURE AND DEVELOPMENTS

CEMENT AND STEEL

India ranks second in cement production after China, with the cement industry adding ~44MT of capacities in FY10 taking the estimated total installed EOP capacity to around 262.2 MT as compared to 217.8 MT in FY 09 and the effective capacities are expected to rise ~48 MT during FY11. With the boost given by the government to various infrastructure projects, road networks and housing facilities which account for 50% of the demand in cement, the cement industry is at an inflection point, with growth trajectory likely to shift upwards from its historical average of 8% to 10-12% over the next five years. This is on the back of projected investment in the infrastructure sector of US$1 trillion in the 12th plan which is twice the projected 11th plan investment of US$514billion.

The steel industry in India has been moving from strength to strength and according to Annual Report 2009-10 by the Ministry of Steel, India has emerged as the fifth largest producer of steel in the world.

Six major infrastructure industries, which constitute the core sector, registered growth of 5.5 % in FY2009-10. This is more than double the growth of 2.7 % in the previous fiscal. The core sector, which has a 26.68 % weight in the Index of Industrial Production (IIP), is largely representative of growth in the industries we serve. On a cumulative basis, for the April 2009 to March 2010 period, cement production grew at the highest average annual rate of 10.5 %, while growth in petroleum refinery products output was the least, at -0.4 %. This augurs well for our business as it indicates improved capacity utilization across the process and metallurgy space.

The Indian steel industry which accounts around 5% of the global steel consumption is better placed versus the global industry, due to strong demand drivers. Notably, steel consumption in India was higher by 7.6% at 56.3 MT during the slowdown last year, whereas global steel consumption was down by 8.5%. Within a year after the recession, the steel industry has reverted to its pre-recession growth rate of 8-10%. The National Steel Policy has a target for taking steel production up to 110 MT by 2019–20. Iron ore production in India was about 230 million tonnes in the FY2009-10. About 1651093 Euro tonnes of iron ore was exported in 2008-09 and it is expected in the similar range in the last fiscal. India’s iron ore exports in 2010-11 are expected to be about 1562500 Euro tones.

Growing infrastructure-related outlay implies an increase in the demand for steel, as the infrastructure sector accounts for major portion of the steel consumption. GFCF (Gross Fixed Capital Formation) as a % of GDP has increased from 24% in 2000-01 to 35% in 2008-09, indicating an increase in investments in fixed capital. Approximately 12% of India’s steel is consumed by the automobile industry, which has been on an upswing since the second half of the financial year. Production of vehicles (major segments - commercial vehicles, passenger vehicles, two and three wheelers) has been surging.

Indian steel outlook for 2010 continues to be positive, since Indian steel consumption is expected to be rising, on account of higher demand from the real estate, construction and automobile sectors. According to the Ministry of Steel, 222 Memorandums of Understanding (MoUs) have been signed with various states for planned capacity of around 276 MT. India’s steel consumption is anticipated to grow by 16 % annually till 2012, fuelled by demand for construction projects worth US$ 1 trillion as per a Credit Suisse Group study.

INFRASTRUCTURE AND CAPITAL GOODS

The state of infrastructure in India remains dismal despite the regulatory focus and concerted efforts in recent years. Given the acute shortage of infrastructure capacity in India, investment in infrastructure is an area of significant importance for the country. The Government has been steadily increasing the allocation towards infrastructure in its 5 year plans. However, the backlog of several years coupled with investments for projected demand have made the task of upgrading India’s Infrastructure an extremely challenging one.

Infrastructure investment in India and over the globe is set to grow dramatically as India has become a major outbound investor in this sector. The 11th Five Year Plan (2007-12) had estimated an investment of $500 billion in

infrastructure, with the Government bringing 70%. The private sector is increasingly playing a major role and the ratio is nearer 50:50 today. The National Highways Authority of India (NHAI) is widening 54,000 km of highways, of which 12,000 km is done. Of the remaining 42,000 km, 90% would be done by private companies. Today, 83% of power-generating capacity is with public sector units. Going forward, the private sector is expected to add over 50% of new capacities.

Capital goods and consumer durables led the higher growth trajectory of industrial output in FY 2009-2010 wherein capital goods growth rate accelerated to 56.19% in January from 15.9% in the corresponding period last year. Production of basic and intermediate goods also registered robust growth rates of 10.7% and 21.29% respectively against declines of 0.7% and7.2 % last year.

POWER

As the Indian economy continues to surge ahead, its power sector has been expanding concurrently to support the growth rate. The demand for power is growing exponentially and the scope for the growth of this sector is immense. India ranks sixth globally in terms of total electricity generation.

The Indian Power Sector has made steady increases in capacity over the years. Further, the per capita consumption of power in India has gone up significantly since the 1990s. The average per capita consumption of electricity in India is estimated to be 704 kWh during 2008-09. The targeted per capita consumption at the end of the current Five- Year Plan (2011–12) is 1,000 kWh which is still very low compared to other developing countries, despite the overall increase in energy demand.

India’s total installed capacity of electricity generation has expanded from 1,05,045.96 MW at the end of 2001–02

to 1,59,648.49 MW at the end of April, 2010. Of this 1,02,703.98 MW is attributable to Thermal, 4,560 MW to Nuclear, 36,863.40 MW to Hydro and 15,521.11 MW to Renewable Energy Sources .

Coal based generation of power at 84,448.38 MW constituted around 80 % of thermal generation and around 50 % of the total generation of power. Coal - based power generation was constrained by the shortage in domestic

supply of coal and the non-materialization of planned imports. There was a decline in hydroelectric power generation mainly due to poor monsoons.

In spite of these conditions, the power sector has been fairly successful during the past 4-5 years. With the growth expected in the future, private sector participation is an essential requirement as the gaps between plans and execution of those plans need to be cemented. Currently the private sector contributes around 15% to the total power generation, as the sector is highly regulated. Nearly half of the investments in the power generation space are expected to be made by the private sector and the Government of India has issued guidelines for private participation.

The government has revised its target of power capacity addition to 92,700 MW in the 11th Five Year Plan (2007-

12), from the earlier estimate of 78,577 MW (as of June 2007) to sustain the growth momentum of the economy. Further, according to Planning Commission estimates, renewable energy (RE) projects worth US$ 16.50 billion, for the generation of 15,000 MW power, would come up in the 11th Plan. The current installed transmission capacity is only 13 % of the total installed generation capacity. The current inter regional power transfer capacity is 20,750MW and the Ministry of Power plans to establish an integrated National Power Grid in the country by 2012 with close to 2,00,000 MW generation capacities and 37,700 MW of inter-regional power transfer capacity. Moreover, the government has earmarked a total capital subsidy of US$ 6.88 billion for providing electricity connections and for the distribution of infrastructure to rural households.

RENEWABLE ENERGY SCENARIO

Renewable energy sources in India contributed 10% to the total installed base of power generation in the country

producing 15,521.11 MW at the end of April 30, 2010. This however translates to only 3.5% of generated power due to the inherently lower PLF of some resources. The country has the fourth largest number of wind energy installations in the world. In July 2009, India unveiled a $19 billion plan to produce 20,000 MW of solar power by 2020. There is a significant potential for generation of power from renewable energy sources- wind, small hydro, biomass, and solar energy with global investment in clean energy is expected to triple to $500 billion by 2020. In 2013, the global renewable energy market is forecasted to have a value of $511.3 billion, an increase of 64.7% since 2008 and volume of 3,642.2 billion kWhs, an increase of 22.6% since 2008.

WIND ENERGY

GLOBAL SCENARIO

The worldwide wind energy capacity reached 1,59,213 MW in March 2009, out of which 38,312 MW was added in

2009, as per the World Wind Energy Report 2009. All wind turbines installed by the end of 2009 worldwide are generating 340 TWh per annum, equivalent to the total electricity demand of Italy, the seventh largest economy of the world, and equalling 2% of global electricity consumption.

The USA maintained its number one position in terms of total installed capacity and China became number two in total capacity, only slightly ahead of Germany, both of them with around 26,000 MW of wind capacity installed. The US wind industry installed nearly 10,000 MW of new generating capacity in 2009. China continued its role as the locomotive of the international wind industry with new capacity additions of 13,800 MW within one year – as the biggest market for new turbines – more than doubling the installations for the fourth year in a row. Asia accounted for the largest share of new installations (40.4 %), followed by North America (28.4 %) and Europe fell

back to the third place (27.3 %). Latin America showed encouraging growth by more than doubling its installations, mainly due to Brazil and Mexico. The added capacity in India and some smaller additions in Japan, South Korea and Taiwan along with China make Asia the biggest regional market for wind energy, with more than 14 GW of new capacity.

The wind sector, a global job generator, has employed 5,50,000 persons and in the year 2012, the wind industry is expected for the first time to offer 1 million jobs worldwide. Wind energy can provide up to 30% of the word’s electricity by the middle of the century. More importantly, wind power could save as much as 1.5 billion tonnes of CO2 every year by 2020. World Wind Energy Association has increased its predictions by forecasting a global capacity of 19,00,000 MW as possible by the year 2020.

WIND ENERGY IN INDIA

India ranks fifth amongst the wind-energy-producing countries of the world after USA, China, Germany and Spain with an installed capacity of 11,807 MW (as on March 31, 2010), making India a major player in the wind energy market.

The Central Ministry and several State Nodal Agencies encourage growth of Wind Energy Sector through financial incentives and policy support. The Ministry of New and Renewable Energy (MNRE), Govt. of India has established a Centre for Wind Energy Technology (CWET) at Chennai with field test station at Kayathar to act as a technical focal point for wind power development in the country.

Wind power leads the way with around 67% share during 2009-10 and at around 70% of the cumulative achievements.

During the 11th Plan, the Government of India has proposed 15,000 MW of additional power from renewable sources excluding large hydro power projects. Wind power forms 70% (10,500 MW) of the proposed capacity with small hydro power project accounting for 1,400 MW. The proposed investment during the current plan period is to the tune of around Rs.104.60 billion. The Centre for Wind Energy Technology (CWET), MNRE and Indian Wind Energy Association estimate the wind potential of the country on March 31, 2009 to be 48,561 MW.

The Generation Based Incentive (GBI) Scheme for Grid Interactive Wind Power Projects was introduced by MNRE in December 2009. The GBI is to be provided to wind electricity producers @ Rs. 0.50 per unit of electricity fed into the grid in parallel with accelerated depreciation on a mutually exclusive manner. This gives more emphasis on electricity generation rather than installation. Increasing the limit under GBI to 4,000 MW from the earlier 49 MW and laying a framework for trading of renewable energy certificates are steps in the right direction as renewable energy certificates are a solution for meeting the Renewable Performance Obligations (RPOs) for the state utilities. These developments would help promote increased private investments and FDI for the development of wind sector of the country.

The unexploited resource availability has the potential to sustain the growth of wind energy sector in India in the years to come. The approved outlay of the Ministry of 2009-10 in the budget allocation was 96875000 Euro (GBS) which has now been enhanced to 156250000 Euro (GBS)?? for 2010- 11, which represents an increase of 61% over last year’s outlay. The government proposes to set up solar, small hydro and micro power projects at a cost of 78125000 Euro to address the problem of energy deficiency in the Ladakh region of Jammu and Kashmir which faces extremely hard climate. The Indian Wind Energy Association has estimated that with the current level of technology, the ‘on-shore’ potential for utilization of wind energy for electricity generation is of the order of 65,000 MW.

With a favourable investment climate, 2009-10 could see significantly larger investments in new capacities. The coming year would see growth from the health care industry, hospitality, retail and cinemas, which are expected to invest in wind power to take advantage of the improved tariff regime.

OUTLOOK

The vision is to continue to generate strong financial returns and create a world-class engineering, procurement and construction. The company has a focus on renewable energy and also strives to be a developer and manufacturer of technologically advanced WTGs. SEPC continues to enhance its service offerings through technology tie ups with leading global institutions such as Envirotherm of Germany, NWEPDI of China and Roberts and Schaefer of USA. They will continue to pursue opportunities by expanding and enhancing the presence throughout India and abroad. They will look to capitalize on the strengths, local experience and familiarity with local working conditions and ever strengthening relationships with the clients and strategic partners in order to establish and maintain a leading position in the industry. They further intend to target specific project segments and industries where they believe there is high potential for growth and can enjoy competitive advantages.

CONTINGENT LIABILITIES

Particulars	As on 31.03.2010 In Euro	As on 31.03.2009 In Euro
Letters of Guarantee issued by the Banks	39778906	26269109
Letters of Credit issued by the Banks	76640109	27155421
Bills discounted	000	2865187
Corporate Guarantees issued	14843750	14363281
Claims against the Company not acknowledged as debts	1882984	1422968
Disputed Income Tax demands contested in Appeals not provided for. *	1535531	1535531

Assessment year	Appeal pending before	As on 31.03.2010 In Euro	As on 31.03.2009 In Euro
2000-01	Appellate Tribunal	87406	87406
2001-02	Appellate Tribunal	33734	33734
2002-03	Appellate Tribunal	81093	81093
2003-04	Appellate Tribunal	255078	255078
2004-05	Commissioner of Income Tax (Appeals)	47781	47781
2005-06	Commissioner of Income Tax (Appeals)	532078	532078
2006-07	Commissioner of Income Tax (Appeals)	498359	498359

* Management is of the opinion that the Appeals preferred by the Company will be decided in its favour.

FIXED ASSETS

Tangible Assets

· Freehold Land

· Buildings

· Leasehold Improvements

· Plant and Machinery

· Furniture and Fittings

· Office Equipment

· Computers and Software

· Vehicles

Intangible Assets

· Technical know-how

· ERP Software

· Leasehold land right to use

WEB DETAILS

Overview

Subject, the flagship company of the Shriram EPC Group is a part of the US$ 8 billion Shriram Group which has diverse interests across Financial Services, IT Services, Project Engineering and Construction, Property Development, Life Insurance and General Insurance. Subject, a US$ 220 Million company provides end-to-end solutions to engineering challenges, offering multi disciplinary design, engineering, procurement, construction and project management services. Subject is focussed on providing turnkey solutions for ferrous and non ferrous, cement, aluminium, copper and thermal power plants ; water treatment and transmission ; renewable energy ; cooling towers and material handling.

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.44.38
UK Pound	1	Rs.72.34
Euro	1	Rs.64.00

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	6
--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	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		62

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.