MIRA INFORM REPORT

Report Date :

09.06.2011

IDENTIFICATION DETAILS

Name :	GOLDSTONE INFRATECH LIMITED (w.e.f. 29.02.2008)
Formerly Known As :	GOLDSTONE TELESERVICES LIMITED
Registered Office :	9-1-83 and 84, Amarchand Sharma Complex, S D Road, Secunderabad – 500 003, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	11.10.2000
Com. Reg. No.:	01-35451
Capital Investment / Paid-up Capital :	Rs. 144.322 millions
CIN No.: [Company Identification No.]	L64203AP2000PLC035451
TAN No.: [Tax Deduction & Collection Account No.]	HYDG00750B
Legal Form :	Public Limited Liability Company. The company's shares are listed on Stock Exchange
Line of Business :	Manufacturer of Silicon Rubber Polymer Insulators used in Electric Line.
No. of Employees :	138 Approximately

RATING & COMMENTS

MIRA’s Rating :

Ba (53)

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

Maximum Credit Limit :	USD 3875000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and a reputed 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 be regular and as per commitments. 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

LOCATIONS

Registered Office :	9-1-83 and 84, Amarchand Sharma Complex, S D Road, Secunderabad – 500 003, Andhra Pradesh, India
Tel. No.:	91-40-27807640/ 39100012/ 27800742/ 27806706
Fax No.:	91-40-27801910/ 39120023
E-Mail :	cs@goldstone.net
Website :	http://www.goldstonepower.com
Corporate Office :	Amarchand Sharma Complex, S D Road, Secunderabad – 500 003, Andhra Pradesh, India
Tel. No.:	91-40-27807640 / 27806706
Fax No.:	91-40-27801910
Administrative Office:	6/10, Shantiniketan , New Delhi - 110 021, India
Website :	http://www.goldstonepower.com
Factory 1:	Plot No. 8, IDA, Gaddapotharam, Jinnaram Mandal, Medak, Andhra Pradesh, India
Factory 2:	Plot No. 1 and 9 , Phase – II, IDA Cherlapally Hyderabad – 500 051, Andhra Pradesh, India
Tel. No.:	91-40-27266783 / 84 / 85 / 27260360
Fax No.:	91-40-27266786
E-Mail :	kvbnarayana@gmail.com support@goldstone.net
Websites:	www.goldstonepower.com

DIRECTORS

AS ON 31.03.2010

Name :	Mr. L P Sashikumar
Designation :	Managing Director
Name :	Mr. S Murali Krishna
Designation :	Director
Name :	Mrs. Mahita Caddell
Designation :	Director
Name :	Mr. M Gopala Krishna
Designation :	Director
Name :	Mr. B. Appa Rao
Designation :	Director (w.e.f. 20.04.2009)

KEY EXECUTIVES

Name :	Mr. Adalat Srikanth
Designation :	Company Secretary and Compliance Officer
Name :	Mr. M. Surendernath
Designation :	EVP, Operations
Name :	Mr. Surendra Kabra
Designation :	President
Name :	Mr. D P K Udas
Designation :	VP, Marketing

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.03.2011

Category of Shareholder	Total No. of Shares	% of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	534,350	1.48
Bodies Corporate	17,776,165	49.27
Sub Total	18,310,515	50.75
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	18,310,515	50.75
(B) Public Shareholding
(1) Institutions
Financial Institutions / Banks	100,459	0.28
Sub Total	100,459	0.28
(2) Non-Institutions
Bodies Corporate	7,687,506	21.31
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	6,215,942	17.23
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	3,331,624	9.23
Any Others (Specify)	434,691	1.20
Clearing Members	138,866	0.38
Trusts	1,000	-
Non Resident Indians	294,825	0.82
Sub Total	17,669,763	48.97
Total Public shareholding (B)	17,770,222	49.25
Total (A)+(B)	36,080,737	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)	36,080,737	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Silicon Rubber Polymer Insulators used in Electric Line.

Products :

ITC Code	Product Description
754690	Thermoweld Filled Heat Shrinkable Sleeves
854790	Jelly Filled Telephone Cable Jointing Kits And Sub Kits
854620	Composite Polymers Insulators.

PRODUCTION STATUS (As on 31.03.2010)

Particulars	Installed Capacity	Actual Production
Heat Shrinkable Sleeves	690,000	--
Polymer Insulators	Depends on product mix	526443

GENERAL INFORMATION

No. of Employees :

138 Approximately

Bankers :

• State Bank of Hyderabad
• Syndicte Bank, Banjara Hills, Hyderabad
• ICICI Bank, S D Road, Secunderabad
• Allahabad Bank, Himayatnagar, Hyderabad

Facilities :

( Rs. in millions )

SECURED LOAN	31.03.2009	31.03.2009
From State Bank of Hyderabad
- Term loans	74.208	23.929
- Working Capital	100.680	49.953
From Others
- Technology Development Board	30.534	28.930
- Vehicle Loans	2.068	1.787
Total	207.490	104.599

Secured Loans (Note)

a) Term Loan from Syndicate Bank is secured by

i) Hypothecation of plant and machinery acquired out of the said loan.

ii) Hypothecation against first charge on all unencumbered fixed assets of the company both present and future.

iii) Equitable Mortgage of immovable property of Goldstone Exports Limited

iv) Corporate Guarantees of Goldstone Exports Limited

v) Personal guarantee of a promoter director of the company.

b) Term Loan from Technology Development Board is secured by

i) Hypothecation of fixed assets acquired out of the said loan.

ii) Corporate Guarantees of Goldstone Exports Limited.

iii) Personal guarantee of a promoter director of the company.

iv) Provision for Accrued Interest of Rs.2.930 millions has been considered in the books of accounts .

c) Working Capital Facilities from Syndicate Bank are secured by

i) Hypothecation against first charge on Current Assets of the company both present and future.

ii) Equitable Mortgage of immovable property of Goldstone Exports Limited

iii) Corporate Guarantees of Goldstone Exports Limited.

iv) Personal guarantee of a promoter director of the company.

d) Vehicles loans availed are secured by hypothecation of vehicles acquired out of the said loans.

UNSECURED LOAN	31.03.2010	31.03.2009
Sales Tax Deferment Loan (interest free)	92.033	91.077
Total	92.033	91.077

Unsecured Loan (Note)

The Company has availed Sales Tax deferment of Rs.6.711 millions during the year.

Banking Relations :	--
Auditors :
Name :	P Murali and Company Chartered Accountants
Address :	Somajiguda, Hyderabad – 500 082, Andhra Pradesh, India
Associates/Subsidiaries :	Nil

CAPITAL STRUCTURE

AS ON 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
61625000	Equity Shares	Rs. 4 each	Rs. 246.500 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
36080737	Equity Shares	Rs. 4 each	Rs. 144.322 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		144.322	144.323	84.093
2] Share Application Money		0.000	0.000	330.000
3] Reserves & Surplus		824.451	765.543	455.215
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		968.773	909.866	869.308
LOAN FUNDS
1] Secured Loans		207.490	104.599	91.739
2] Unsecured Loans		92.033	91.077	84.367
TOTAL BORROWING		299.523	195.676	176.106
DEFERRED TAX LIABILITIES		48.309	44.242	42.112
TOTAL		1316.605	1149.784	1087.526
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		812.916	756.930	250.333
Capital work-in-progress		88.200	88.434	576.846
INVESTMENT		0.097	0.263	23.117
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	122.173	105.489	74.968
	Sundry Debtors	238.023	140.857	252.169
	Cash & Bank Balances	36.356	35.686	14.348
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	150.870	126.179	113.516
Total Current Assets		547.422	408.211	455.001
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	63.794	30.719	NA
	Other Current Liabilities	31.785	33.115	153.842
	Provisions	38.439	42.926	70.194
Total Current Liabilities		134.018	106.760	224.036
Net Current Assets		413.404	301.451	230.965
MISCELLANEOUS EXPENSES		1.988	2.706	6.265
TOTAL		1316.605	1149.784	1087.526

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Sales	656.069	456.062	508.214
		Other Income	20.567	8.878	9.109
		TOTAL (A)	676.636	464.940	517.323
Less	EXPENSES
		Material Consumption	419.834	252.928	260.053
		Increase/(Decrease) in Finished Goods	(14.757)	(35.025)	(2.640)
		Personnel Expenses	59.896	49.784	35.555
		Manufacturing expenses	17.658	16.672	11.663
		Administrative and Selling Expenses	47.771	47.567	40.740
		Miscellaneous Expenses Written off	0.714	3.589	2.137
		TOTAL (B)	531.116	335.515	347.508
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		145.520	129.425	169.815
Less	FINANCIAL EXPENSES (D)		26.382	15.548	14.658
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		119.138	113.877	155.157
Less/ Add	DEPRECIATION/ AMORTISATION (F)		28.185	26.353	25.466
	PROFIT BEFORE TAX (E-F) (G)		90.953	87.524	129.691
Less	TAX (H)		24.068	21.494	28.475
	PROFIT AFTER TAX (G-H) (I)		66.885	66.030	101.216
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	0.000	3.537	2.979
	IMPORTS
		Materials including trading materials	187.618	31.685	96.898
		Capital Goods	13.618	12.585	0.000
	TOTAL IMPORTS		201.236	44.270	96.898
	Earnings Per Share (Rs.)		1.87	1.74	4.76

QUARTERLY RESULTS

PARTICULARS	30.06.2010	30.09.2010	31.12.2010	31.03.2011
	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Net Sales	129.100	146.950	138.920	269.630
Total Expenditure	106.560	122.970	114.650	238.000
PBIDT (Excl OI)	22.540	23.980	24.270	31.630
Other Income	3.190	1.550	2.970	3.690
Operating Profit	25.740	25.530	27.240	35.320
Interest	6.000	7.970	10.260	13.840
Exceptional Items	0.000	0.000	0.000	0.000
PBDT	19.740	17.560	16.980	21.480
Depreciation	7.060	7.340	6.850	7.740
Profit Before Tax	12.690	10.230	10.130	13.740
Tax	2.500	1.700	5.260	4.570
Provisions and contingencies	0.000	0.000	0.000	0.000
Profit After Tax	10.190	8.530	4.870	9.170

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	9.88	14.20	19.57
Net Profit Margin (PBT/Sales)	(%)	13.86	19.19	25.52
Return on Total Assets (PBT/Total Assets}	(%)	6.68	7.51	18.39
Return on Investment (ROI) (PBT/Networth)		0.09	0.10	0.15
Debt Equity Ratio (Total Liability/Networth)		0.49	0.33	0.46
Current Ratio (Current Asset/Current Liability)		4.08	3.82	2.03

LOCAL AGENCY FURTHER INFORMATION

Review of Operations

The Company has achieved a gross turnover of Rs. 703.509 millions as compared to Rs. 511.743 millions during the previous financial year. The Net Profit Increased from Rs. 62.781 millions during the year ended 31st March 2009 to Rs. 67.323 millions for the Current year. Though the turnover increased by 37%, the increase in net profit was only by 7% and the main reasons for this were decrease in sales price and increase in competition.

Future Plan of Action

• A few new products have been identified after a thorough study of the market; and the technology for manufacturing the related products would be developed in the In house R & D Lab.

• Focus to improve the existing process technology.

MANAGEMENT DISCUSSION ANALYSIS AND BUSINESS OUTLOOK

INDUSTRY OVERVIEW:

The world economy is gradually recovering from the throes of the meltdown of 2008. Even though the growth rates have been picking up, it will take some more time to get back to the pre-crises path. The IMF has forecasted a growth rate of 2.3% for the advanced countries and 6.3% for the emerging countries for the year 2010. The growth of the insulators industry is linked to the growth of the power sector. In spite of the economic slowdown, particularly in the first half of FY 2009-10, the insulator industry has done reasonably well. The major reason for this was that the Power Sector has achieved 66% of targeted capacity addition during 2009-10

OUTLOOK:

It is a known fact that the demand for energy is more than that of the supply. The National Electricity Policy (NEP) stipulates power for all by the year 2012. To fulfill the objectives of NEP, a capacity addition of 78700 MW has been proposed for the 11 * Plan [Source: 2009—10 10 Annual Report of Ministry of Power]. It is expected that the expansion of India's power infrastructure to increase demand for electrical equipments and components including insulators. To capitalize on the vibrant demand in the power infrastructure sector, Goldstone will focus on full utilization of all its plant and machinery and Goldstone has also identified three major new products as a part of its

expansion drive, i.e, Surge Arresters etc., It is expected that the production of new products would begin in the current financial year. Apart from the above, the insulator industry is dependent on the investments in power sector. As the prospects for the power sector appear bright with huge investments lined up in the transmission and distribution segment, the outlook for company's products is positive.

FIXED ASSTES:

• Goodwill
• Land
• Building
• Plant and Machinery
• Furniture and Fixtures
• Lab tools and Equipments
• Electrical Equipments
• Installation
• Vehicles
• Computer System
• Office equipments
• Generator
• Leasehold Improvements
• Air conditioners
• Network Equipments
• Electronic Equipments and UPS
• Tools and Spares
• Temporary Sheds

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.44.61
UK Pound	1	Rs.73.28
Euro	1	Rs.65.47

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--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	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		53

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.