MIRA INFORM REPORT

Report Date :

24.06.2011

IDENTIFICATION DETAILS

Name :	HARI MACHINES LIMITED
Registered Office :	Rajgangpur, Sundergarh – 770 017, Orissa
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	13.07.1948
Com. Reg. No.:	15-713
Capital Investment / Paid-up Capital :	Rs.50.000 millions
CIN No.: [Company Identification No.]	L29299OR1948PLC000713
Legal Form :	Public Limited Liability Company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer of Refractory Equipments, Crushing and Grinding Equipment, Mixing Equipment- counter Current Mixer.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

A (63)

RATING		STATUS	PROPOSED CREDIT LINE
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large

Maximum Credit Limit :	USD 2100000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a part of Dalmia 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 be 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 :	Rajgangpur, Sundergarh – 770 017, Orissa, India
Tel. No.:	91-6624-220141 / 161
Telefax No. :	91-6624-220151
Cable :	HARIMACHIN
E-Mail :	hml@harimachines.in
Website :	http://www.harimachines.com/
Corporate Office 1 :	Eco Space Business Park, 6^th Floor, Block-B, Premises No. II F/11, Action Area – II, New Town, Rajarhat, Kolkata – 700 156, West Bengal, India
Tel. No.:	91-33-40174100 to 4109
Telefax No. :	91-33-40174110
E-Mail :	hmlkol@harimachines.in
Corporate Office 2 :	Sugam Business Park, 7^th Floor, Premises No. J-6, Block No. EP and Gp, Sector – V, Salt Lake City, Kolkata – 700 091, West Bengal, India
New Delhi Office :	4, Scindia House, Connaught Place, New Delhi – 110 001, India
Tel. No.:	91-11-23312706 / 2873
Telefax No. :	91-11-23325160 / 23315762

DIRECTORS

As on 22.07.2010

Name :	Mr. Raghu Hari Dalmia
Designation :	Chairman
Address :	No.1 Tees January Marg, New Delhi – 110011, India
Date of Birth/Age :	14.01.1950
Date of Appointment :	01.10.1980
Name :	Mr. Gaurav Dalmia
Designation :	Vice Chairman
Name :	Mr. Sabyasachi Mishra
Designation :	Managing Director
Name :	Mr. Krishna Murari Poddar
Designation :	Director
Name :	Mr. Sushil Kumar Chhawchharia
Designation :	Director
Name :	Mr. Ravinder Kumar Gilani
Designation :	Director

KEY EXECUTIVES

Name :	Ms. Sudha Agarwal
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Not Available

BUSINESS DETAILS

Line of Business :

Manufacturer of Refractory Equipments, Crushing and Grinding Equipment, Mixing Equipment- counter Current Mixer.

Products :

Product Description	ITC Code
Pressing Equipment Friction Screw Press	84629911
Crusher and Grinding Equipments	84742001
Mixing Equipment - Counter Current Mixer	84743900

· Refractory Equipments

· Engineering Equipments

· Sponge Iron Equipments

· Engineering Equipments and Spares

· Screening and Separating Machines

· Mixing Equipments – Counter Current Mixer

PRODUCTION STATUS AS ON 31.03.2010

Installed Capacity

Particulars	Unit	Installed Capacity
Industrial Machinery, Heavy duty hydraulic toggle press	Nos.	10
Gas producers components and Spares	Nos.	5
Crushing and Grinding equipmen	Nos.	25
Screening and Separating Machines	Nos.	12
Mixing equipments - Counter Current Mixture	Nos.	20
Pressing equipment - Friction Screw Press	Nos.	30
Pressing equipment - Stopper Press	Nos.	20
Bucket Elevators	Nos.	20
Screw Conveyors	Nos.	5
Furnaces (all types)	Nos.	12

Production

Particulars	Unit	Production
Crushing and Grinding equipment	Nos.	9
Screening and Separating Machines	Nos.	1
Mixing Equipments	Nos.	2
Pressing equipment	Nos.	1
Skip hoist and Furnace (all types)	Nos.	-
*Spares and components of above equipments	Nos.
*Engineering equipments and Spares	Nos.

* Not ascertainable due to different specification

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· State Bank of India

· UCO Bank

· HDFC Bank

· Punjab National Bank

Facilities :

Secured Loans	As on 31.03.2010 Rs. in millions	As on 31.03.2009 Rs. in millions
From Banks
Term Loan	18.399	183.541
Working Capital Facilities	572.292	469.091
Total	590.691	652.632

Notes:

· Term loans from Banks are secured by way of equitable mortgage of immovable properties of the Company situated at Rajgangpur and Kolkata and hypothecation of all the movable assets save and except the prior charge in favour of Banks over inventories and book debts to secure working capital limits.

· Working capital facilities are secured by hypothecation of raw material, semi-finished goods, stock-in-process, consumable stores and book debts of the Company.

Unsecured Loans	As on 31.03.2010 Rs. in millions	As on 31.03.2009 Rs. in millions
Loan from other Companies	100.000	0.000
Total	100.000	0.000

Banking Relations :	--
Statutory Auditors :
Name :	K D Lath and Company Chartered Accountant
Address :	Narmada, Udit Nagar, Rourkela – 769 012, Orissa, India

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares	Rs.10/- each	Rs.50.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares (48,00,000 Equity Shares of Rs.10/- each alloted as fully paid up Bonus share by capitalisation of General Reserves)	Rs.10/- each	Rs.50.000 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		50.000	2.000
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		466.208	376.320
4] (Accumulated Losses)		0.000	0.000
NETWORTH		516.208	378.320
LOAN FUNDS
1] Secured Loans		590.691	652.631
2] Unsecured Loans		100.000	0.000
TOTAL BORROWING		690.691	652.631
DEFERRED TAX LIABILITIES		8.580	9.258
TOTAL		1215.479	1040.209
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		310.597	224.345
Capital work-in-progress		115.152	150.258
INVESTMENT		0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	819.288	947.557
	Sundry Debtors	241.827	184.040
	Cash & Bank Balances	69.057	30.344
	Other Current Assets	5.406	1.283
	Loans & Advances	309.183	406.074
Total Current Assets		1444.761	1569.298
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	190.999	155.907
	Other Current Liabilities	307.317	545.880
	Provisions	156.715	201.905
Total Current Liabilities		655.031	903.692
Net Current Assets		789.730	665.606
MISCELLANEOUS EXPENSES		0.000	0.000
TOTAL		1215.479	1040.209

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009
	SALES
		Income	1859.660	1280.036
		Service Rendered	45.027	20.449
		Other Receipts	57.116	17.722
		TOTAL (A)	1961.803	1318.207
Less	EXPENSES
		Raw Material Consumed	1203.297	1090.046
		Personnel Expenses	107.556	85.787
		Power and Fuel	7.895	6.885
		Other Expenses	184.154	147.412
		Increase / (Decrease) in Stocks	119.637	(163.420)
		TOTAL (B)	1622.539	1166.710
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		339.264	151.497
Less	INTEREST (D)		72.355	53.124
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		266.909	98.373
Less/ Add	DEPRECIATION/ AMORTISATION (F)		21.909	18.875
	PROFIT BEFORE TAX (E-F) (G)		245.000	79.498
Less	TAX (H)		83.713	28.910
	PROFIT AFTER TAX (G-H) (I)		161.287	50.588
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		281.888	236.359
Less	APPROPRIATIONS
		Transfer to General Reserve	16.129	5.059
		Interim / Final Dividend (200000 shares @ Rs.100)	20.000	0.000
		Tax on Dividend	3.399	0.000
	BALANCE CARRIED TO THE B/S		403.647	281.888
	EARNINGS IN FOREIGN CURRENCY
		Sale of equipments (on FOB basis)	0.000	15.136
		Service charges realized	0.000	0.065
	TOTAL EARNINGS		0.000	15.201
	IMPORTS
		Raw Materials	325.635	219.775
	TOTAL IMPORTS		325.635	219.775
	Earnings Per Share (Rs.)		32.26	252.94

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009
PAT / Total Income	(%)	8.22	3.84
Net Profit Margin (PBT/Sales)	(%)	13.17	6.21
Return on Total Assets (PBT/Total Assets}	(%)	13.96	4.43
Return on Investment (ROI) (PBT/Networth)		0.47	0.21
Debt Equity Ratio (Total Liability/Networth)		2.61	4.11
Current Ratio (Current Asset/Current Liability)		2.21	1.74

LOCAL AGENCY FURTHER INFORMATION

REVIEW OF OPERATIONS

After one of the worst downturn globally, most of the countries are now enroute to recovery though at varied pace, with some still reeling under its affect. The company's performance, as reported above has been very satisfactory and is a source of future optimism.

During the year, Net Sales of the Company was Rs.1961.803 millions as against Rs.1318.205 millions for F.Y. 2008-09 (an increase of 49%) and Net Profit was Rs.161.287 millions as against Rs.50.588 millions for F.Y. 2008-09 (an increase of 219%).

The Company entered into manufacturing agreement with Allmineral Asia Private Limited (subsidiary Company of Allmineral GmbH, Germany) for manufacture of all indigenous mechanical items. Allmineral GmbH is one of the World leaders in the field of mineral beneficiation with successful installations at Australia, Africa, Spain, USA, Russia, Europe, U.K etc.

Similarly, the Company has terminated the Technical Assistance Agreement with Hazemag and EPR GmbH and entered into a fresh manufacturing agreement with M/s Hazemag India Private Limited (subsidiary Company of Hazemag and EPR GmbH). This is for better business prospects and in mutual interest of the parties. The Company will manufacture Min Pro range of products in India in accordance with basic and detailed engineering and design to be provided by M/s Hazemag India Private Limited.

The Company has made substantial progress in installation of 1.00 MTPA Iron Ore beneficiation plant at Village-Basantpur, in the State of Orissa, India with a capital investment of around Rs.450.000 millions. It is envisaged that iron ore to the beneficiation plant will be sourced from Barbil area within the vicinity of around 50 Km, where most of the major iron ore mines owned by both State and private mine owners are located. The Company has already acquired 79.77 acres of land, required for the project and the application for obtaining Consent to Establish' from the State Pollution Control Board is under process.

The capacity to draw on all its resources to supply high quality machinery and provide technical advice and after sales services on a continuing basis to its customers has enabled the Company to achieve the reputation of a reliable manufacturer. Further, it is in continuous look out for long term manufacturing tie-up with global leaders to enhance its technical and manufacturing expertise. It is a strategic objective in part of subject to have a diversified

and varied range of machinery which has been one of its key reason for sucesses.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY TREND AND DEVELOPMENT

The development of engineering goods industry is considered to be a pre-requisite for the economic growth and self-reliance of a country. The most cherished goal of rapid industrialisation and economic uplift of masses cannot be achieved without this. It is an observed fact that countries having fairly developed engineering goods industries have more developed economies. The need for the development of such industries is so vital that despite their lower profitability, they receive special attention of many developing as well as developed countries.

The engineering sector is the largest segment of the overall Indian industrial sector. India has a strong engineering and capital goods base. The important groups within the engineering industry include machinery and instruments, primary and semi finished iron and and steel, steel bars and rods, non-ferrous metals, electronic goods and project exports. The sector can be categorised into heavy engineering and light engineering segments. Heavy engineering segment forms the majority of the engineering sector in India.

India has a well-developed and diversified industrial machinery/capital base capable of manufacturing the entire range of industrial machinery. The industry has also managed to successfully develop advanced manufacturing technology over the years. Among the developing countries, India is a major exporter of heavy and light engineering goods, producing a wide range of items. The bulk of capital goods required for power projects, fertiliser, cement, steel and petrochemical plants and mining equipment are made in India. The country also makes construction machinery, equipment for irrigation projects, diesel engines, tractors, transport vehicles, cotton textile and sugar mill.

The engineering sector has been growing, driven by growth in end user industries and the new projects being taken up in the power, railways, infrastructure development, private sector, investment fields etc.

OPPORTUNITY AND THREATS

Among developing countries, India offers the best combination of low costs, availability, skills and capabilities of manpower for the engineering sector. Apart from skilled labour, India also has the raw material resources to meet the demands of the engineering industry. Key raw materials required by the engineering sector i.e. ferrous and non-ferrous metals such as mild steel and aluminum are available in India. Ready availability of these materials gives India a major cost advantage, as materials account for nearly 50% of the industry's operating costs.

The Company is looking ahead to the tremendous opportunity in the field of mineral processing, cement, power, steel and other metallurgical industries in India and abroad by further strengthening its market base and machine building expertise by developing new products and entering new areas by forging global alliances/tie ups and emphasis on customer satisfaction through timely delivery, prompt and efficient after sales services and trouble free performance of product.

OUTLOOK

With some positive indications from the global market, the Indian scenario is also full of hope supported by steady demand from almost all leading consuming sectors. However, the volatility of price will have a bearing on the steel margins in the coming period. Meanwhile, with massive expansion of the domestic steel players in line, incremental supply from main producers is expected to exceed incremental demand.

The GDP and IIP forecast of around 7.5% to 8.5% each for fiscal 2010-11 is based on strong economic fundamentals and steel demand growth in the fiscal 2010-11 over 2009-10 will be primarily driven by key consumption sectors - automotive (9-10% growth), infrastructure and construction (7-8% growth) and manufacturing (7-8% growth).

CONTINGENT LIABILITIES

	As on 31.03.2010 Rs. in millions	As on 31.03.2009 Rs. in millions
Claims against the Company not acknowledged as debts, under dispute
a) Demands for Central and State Sales Tax and Entry Tax pending in appeal	6.651	10.075
b) Bank Guarantee issued in favour of customers	84.509	146.948
c) Arbitration case in S.E.C.L. Dhanpuri	0.933	0.933
d) Demand for service tax	1.021	1.021
e) Income Tax	10.125	4.246

FIXED ASSETS

· Land (Freehold)

· Building (On Freehold and Leasehold Land)

· Plant and Machinery

· Office Equipment

· Electrical Equipment

· Library

· Furniture and Fixture

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.44.93
UK Pound	1	Rs.72.09
Euro	1	Rs.64.21

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
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	7
--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		63

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	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.