MIRA INFORM REPORT

Report Date :

14.03.2011

IDENTIFICATION DETAILS

Name :	RUSHAS ENGINEERING COMPANY LIMITED
Registered Office :	B - 6, MIDC, Ahmednagar – 414111, Maharashtra
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	11.09.1978
Com. Reg. No.:	11-20628
CIN No.: [Company Identification No.]	U29199MH1978PLC020628
TAN No.: [Tax Deduction & Collection Account No.]	PNER07435B
PAN No.: [Permanent Account No.]	AABCR0900N
Legal Form :	A Closely Held Public Limited Company
Line of Business :	Manufacturer of all type of Valves

RATING & COMMENTS

MIRA’s Rating :

Ba (46)

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

Maximum Credit Limit :	USD 62800
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.

ECGC Country Risk Classification List – April 1, 2010

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

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

INFORMATION DECLINED BY

Name :	Mr. Satish Salvekar
Designation :	Director
Date :	11.03.2011

LOCATIONS

Registered Office / Factory 1 :	B – 6, MIDC Area. Ahmednagar – 414111, Maharashtra, India
Tel. No.:	91-241-2777380/6610380
Fax No.:	91-241-2778211
E-Mail :	rushas@vsnl.com satish@rushas.com nsss@rocketmail.com marketing@rushas.com pawarsudhkar@yahoo.com shbank_anr@sancharnet.in
Website :	http://www.rushasvalves.com
Area :	12000 Sq. ft
Factory 2 :	D – 85, MIDC Area, Ahmednagar – 414111, Maharashtra, India,
Tel. No.:	91-241-6603896/2419861
Branches :	Shree Consultancies- Mumbai 218, Central Facility Building No. 2, APMC Market, Sector 19, Vashi, New Mumbai – 400705, Maharashtra, India Tel. No.: 91-22-65146081/65156486 E-mail.: shreeconsultancies@rediffmail.com Hrishikesh Technocom – Indore (Madhya Pradesh) G – 1, Harsh Avenue, 139 – B, Vaishali Nagar, Annapurna Road, Indore – 9 Fax No.: 91-731-2797710 E-mail.: hrishicom@gmail.com Global Flow Controls – Coimbatore – Trichy (Tamilnadu) G1 – B, Shree Complex, Ranga Konar Street, Kattoor, Coimbatore – 641009, Tamilnadu, India Fax No.: 91-422-2237752 E-mail.: globalflowcontrols@in.com

DIRECTORS

AS ON 29.09.2010

Name :	Mr. Satish Dattatraya Salvekar
Designation :	Director
Address :	‘Sagar Miskin Road, Ahmednagar – 414003, Maharashtra , India
Date of Birth/Age :	15.12.1968
Date of Appointment :	25.09.1998
Name :	Mrs. Vasudha Girish Salvekar
Designation :	Director
Address :	‘Sagar Miskin Road, Ahmednagar – 414003, Maharashtra , India
Date of Birth/Age :	24.04.1969
Date of Appointment :	18.02.2002
Name :	Mr. Hemant Mukund Kale
Designation :	Director
Address :	Guimohar Siddhi Vinayak Colony, Ahmednagar – 414003, Maharashtra , India
Date of Birth/Age :	30.01.1952
Date of Appointment :	30.09.1995
Name :	Mr. Murlidhar Yashwant Kulkarni
Designation :	Director
Address :	103/7, Manoyash, Gulmohar Road, Ahmednagar – 414003, Maharashtra , India
Date of Appointment :	18.06.2001

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 29.09.2010

Names of Shareholders	No. of Shares
Mrs. S V Kulkarni	8500
Mrs. A R Salvekar	4250
Dr. J S Deshpande	9900
Mr. G D Salvekar	80000
Dr. R V Salvekar	5800
Mr. R S Deshpande	17000
Mr. V V Salvekar	4500
Mrs. M J Deshpande	6900
Mr. D B Kulkarni	7500
Dr. V S Gosavi	3890
Mr. Arun Nawathe	1000
Mr. Arvind Navathe	1000
Mr. V B Kulkarni	10100
Mr. Hemant M Kale	5960
Mr. S D Salvekar	60000
Mrs. V G Salvekar	65000
Mrs. M D Salvekar	100000
Mrs. V S Salvekar	45000
Mr. Mandar Lele	30000
Mr. VAsant S Tambe	10000
Mr. Shamala V Tambe	8700
Mr. MAndar R Deshpande	15000
Total	500000

EQUITY SHARE BREAK – UP

AS ON 29.09.2010

Category	Percentage
Directors or relatives of directors	74.93
Other top fifty shareholders	25.07
Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of all type of Valves
Products :	v Bronze Gate Valves v Bronze Globe Valves v Bronze Steam Valves v Cast Iron Steam Valves v Cast Steel Globe Valves v Cast Steel Blow Down Valves v Bronze Gauge Glass Valves v Protector Glass Assembly (Level Indicator) v Bronze Fusible Plug v Boiler Castings v Ferrous Castings v Non Ferrous Castings

GENERAL INFORMATION

Customers :

v Thermax Limited

v Schrader Duncan Limited

v Thermax Babcock and Wilcox Limited

v Maxima Boilers Limited

v Crompton Greaves Limited

v Neotech Systems

v Bharat Bijlee Limited

v Fuelpack Boiler

v Pembril Engineering Private Limited (Greaves Group)

v Micro Dynamics Limited

No. of Employees :

45 Approximately

Bankers :

v Ahmednagar Sahar Sahakari Bank Limited

“Sarvarth, Navi Peth, MIDC, Ahmednagar – 414111, Maharashtra, India

Facilities :

SECURED LOANS

(Rs. in millions)

Particulars	31.03.2010	31.03.2009
a) From ASSB By Mortgage of fixed assets in addition to hypothecation of stocks of raw material, finished goods and work in progress	16.014	10.353
b) ASSB- Term Loan on Machinery A/c no. 75/20.	1.813	2.249
c) HDFC – Car Loan (On hypothecation of car)	1.919	0.000
ASSB – Term Loan on Machinery A/c No. 30	4.218	4.804
Total	23.962	17.406

UNSECURED LOANS

(Rs. in millions)

Particulars	31.03.2010	31.03.2009
Unsecured Interest Free loan in the form of Special Incentive form Government of Maharashtra	0.320	0.320
Interest free Sales Tax Loan (SICOM)	0.157	0.157
Sundry Deposits From Others	0.245	0.245
Advance From Party	0.000	0.008
Total	0.722	0.730

Banking Relations :	--
Auditors :
Name :	R S Bora and Company Chartered Accountant
Address :	Sancheti Corner, Above Canara Bank, Vasant Talkie’s Road, Ahmednagar – 414001, Maharashtra, India
Tel. No.:	91-241-2346711/2357314

CAPITAL STRUCTURE

AS ON 29.09.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
805000	Equity Shares	Rs. 10/- each	Rs. 8.050 Millions
45000	1% Cumulative Preference Shares	Rs. 10/- each	Rs. 0.450 Million
	Total		Rs. 8.500 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
500000	Equity Shares	Rs. 10/- each	Rs. 5.000 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		5.000	2.000	2.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		10.717	9.708	7.845
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		15.717	11.708	9.845
LOAN FUNDS
1] Secured Loans		23.962	17.406	12.125
2] Unsecured Loans		0.722	0.730	5.908
TOTAL BORROWING		24.684	18.136	18.033
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		40.401	29.844	27.878
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		14.908	14.780	14.444
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		1.489	0.771	0.443
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	15.438	8.929	9.279
	Sundry Debtors	19.897	14.576	12.048
	Cash & Bank Balances	1.078	1.047	0.678
	Other Current Assets	0.699	0.010	0.008
	Loans & Advances	4.094	2.373	0.971
Total Current Assets		41.206	26.935	22.984
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	16.158	11.361	9.259
	Current Liabilities	1.126	1.281	0.734
	Provisions	0.000	0.000	0.000
Total Current Liabilities		17.284	12.642	9.993
Net Current Assets		23.922	14.293	12.991
MISCELLANEOUS EXPENSES		0.082	0.000	0.000
TOTAL		40.401	29.844	27.878

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Sales	83.724	83.414	61.261
		Other Income	0.164	0.064	0.060
		TOTAL (A)	83.888	83.478	61.321
Less	EXPENSES
		Manufacturing Expenses	82.107	78.709	62.424
		Increase/(Decrease) in Finished Goods	(2.710)	(0.169)	(4.274)
		TOTAL (B)	79.397	78.540	58.150
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		4.491	4.938	3.171
Less	FINANCIAL EXPENSES (D)		2.374	1.947	1.197
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		2.117	2.991	1.974
Less/ Add	DEPRECIATION/ AMORTISATION (F)		1.108	1.128	0.942
	PROFIT BEFORE TAX (E-F) (G)		1.009	1.863	1.032
Less	TAX (H)		0.000	0.000	0.000
	PROFIT AFTER TAX (G-H) (I)		1.009	1.863	1.032
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		0.000	0.000	(0.699)
	BALANCE CARRIED TO THE B/S		1.009	1.863	0.333
	Earnings Per Share (Rs.)		2.02	--	--

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	1.20	2.23	1.68
Net Profit Margin (PBT/Sales)	(%)	1.20	2.23	1.68
Return on Total Assets (PBT/Total Assets}	(%)	1.79	4.46	2.75
Return on Investment (ROI) (PBT/Networth)		0.06	0.15	0.10
Debt Equity Ratio (Total Liability/Networth)		2.67	2.62	2.84
Current Ratio (Current Asset/Current Liability)		2.38	2.13	2.30

LOCAL AGENCY FURTHER INFORMATION

OPERATION:

The financial year 2009-2010 ended with a marginal increase in the turnover over the preceding financial year. The Year 2009-2010 tested the company for its strength. The Financial recession all aver the world disturbed the working of the company. This year their Valves and castings sales have picked up and have been able to enter the market successfully as such the company could scale some good progress on the sales of their own products i.e. valves.

Further, in case of other consumables and overheads, electricity and very soon, major impact will be their. Increase in the cost of resin has affected the cost of Grinding wheel, and shell sand. Increase in the cost of Steel shots and other inputs have also added up to the iota) increase in cost.

As such, this year there has been a lot of pressure on the working capital, Continuous negotiations have been going on with the customers, and they hope that this trend of increase will soon be settled down, and the prices will be fixed at least for a sufficient period.

Further, the year passed can be said as the year of expansion. As the Company has started development of Valves and boiler mountings, new customers will be developed with the help of these new products, in the coming years.

With this background they would like to conclude that the current prospectus has been very hard for the company. However, they have been able to steer successfully, thru the rough waters. But with proper management and faster recovery of funds, they can hope for better prospects in the coming years. Somehow they have been able to steer the Company thru the rough waters.

FUTURE PROSPECTS

Valves Activity

For last few years, the Company has found a good response for its own products i.e. "RUSHAS" brand Bronze Valves. They are happy to inform you that Themax Ltd. are using their valves as original equipment for their bailers. Various steps have been taken to create Brand awareness of their products.

They have developed many good customers who are using their products i.e. G.M. , Valves as original equipment of their products. They are very happy with the ', performance of their products. Also this year their products have been able to secure the confidence of the Boiler Industry, which is reflected by increase in the typical type of clients.

In continuation to the laid down strategies for the growth of the company, the company has invested in Induction furnace .this will help for the horizontal growth by entering into high pressure valves. These valves are made of cast steel, and has big potential in, domestic as well as international market. Further the Company hopes to grow in both directions i.e, vertically by developing valves of the higher ranges and horizontally by developing new products especially for the boiler industry.

Ferrous Castings Activity:

In this area, they can say that, the company has good orders, The Company is renowned for quality castings, but the expectations of the customers are known more prone to cost consciousness then quality standards. In the long run, they hope to get over this tide. Due to the goodwill of quality castings, the company has secured good orders for cast iron castings. With induction furnace under the belt, they have started Alloy steel castings as well as S.G. iron castings. They project a high growth in the near future on this account. However, in the coming period , Cast iron castings will be under pressure for rates which may hamper the profitability of the growth of the company.

On the other side, the management has taken various steps to tackle this problem, and have made a direct attack on the loose points. They hope to lower their rejections in the near future, which wil! help themin reduced hidden costs and ultimately hope for a increased earning from their products. Further, the rates of the raw material viz, scrap and pig iron are beyond their control, as they form a very small sector of the industry. The changes in these rates have affected the profitability of the company in this year.

This has been possible due to support from their existing customers and due to development of new customers for their products. Further, on the order front, they hope for a very bright future as they intend in diversifying into new areas such as owned packaged products, which can fetch, more earnings.

It is hoped that barring the unforeseen circumstances and if present trend continues during the remaining period of the year; it would be possible to achieve a 35% increase in the sales during the current year.

FINANCIAL PROSPECT:-

The company has not been able to collect funds in time ,from the customers. This was the result of the Global Financial crisis. To maintain the cash and work flow, the company had to augment the Finical Limits wit the banks and also, the share capital of the company has been increased, this has resulted in managing their working capital in a better manner. They plan to work in tight budgetary controls and more effective realization from debts to ensure lesser interest burden.

Form 8

Corporate identity number of the company	U29199MH1978PLC020628
Name of the company	RUSHAS ENGINEERING COMPANY LIMITED
Address of the registered office or of the principal place of business in India of the company	B-6,MIDC,Ahmednagar, Ahmednagar – 414111, Maharashtra, India
This form is for	Modification of charge
Type of charge	Immovable property
Particular of charge holder	Ahmednagar Sahar Sahakari Bank Limited “Sarvarth, Navi Peth, MIDC, Ahmednagar – 414111, Maharashtra, India Email - nsss@rocketmail.com
Nature of instrument creating charge	Mortgage Deed Dated 23rd October 2009.
Date of instrument Creating the charge	23.10.2009
Amount secured by the charge	Rs. 16.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest AT BPLR = 12.50% P.A. With Monthly Rest Or At Such A Rates As May Be Prescribed By The Bank From Time To Time. Terms of repayment Repayment On Demand Extent and operation of the charge First Charge By Way Of Mortgage On All That Piece Or Parcel Of Immovable Property. The Charge Shall Continue Till The Date Of Repayment Of Full Amount Of Loan. Others All Other Terms And Conditions Are As Per The Agreement.
Particulars of the property charged	Mortgage Of Immovable Property Of Company - All That Piece Or Parcel Of Land Admeasuring 12000 Sq. Mtrs. Plot No. B 6, At Midc Nagapur, Dist. Ahmednagar. Hypothecation Of Current Assets As Stock And Book Debts, Plant And Machinery. Corporate Guarantee By Onkar Foundry And Engineering Company Private Limited By Mortgage Of Immovable Property Of Company Described As – All That Piece Or Parcel Of Land Admeasuring 8080 Sq. Mtrs. Plot No. D 85, At Midc Nagapur, Dist. Ahmednagar.
Particulars of the present modification	Additional Security By Mort.Of Imm.Prop.Of Co- All That Piece Or Parcel Of Land Admeasuring 12000 Sq. Mtrs. Plot No. B 6, At Midc Nagapur, Dist. Ahmednagar And Mort.Of Imm.Prop.Of Onkar Foundry And Engineering Company Private Limited-All That Piece Or Parcel Of Land Admeasuring 8080 Sq. Mtrs. Plot No. D 85, At Midc Nagapur, Dist. Ahmednagar. The Additional Cash Credit Limit Of Rs. 4.500 millions Is Sanctioned Making The Present Cash Credit Limit Totaling To Rs. 16.000 millions

Fixed Assets:

· Land

· Factory Building

· Office Building

· Plant and Machinery

· Electrical Installation

· CNC m/c

· Lab Installation

· Pattern

· Dies and Moulds

· Generator 27 KVA

· Oil fired heat furnace

· Induction Furnace Furniture

· Office Equipment

· Furniture

· Computer

· Fax

· Indica

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.45.21
UK Pound	1	Rs.72.55
Euro	1	Rs.62.43

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
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		46

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.