MIRA INFORM REPORT

Report Date :

26.03.2011

Note: Given address could not be confirmed.

IDENTIFICATION DETAILS

Name :	HBL ELTA AVIONICS SYSTEMS PRIVATE LIMITED

Registered Office :	Plot No.: 21, 22 and 23, Pragathi Industrial. Area, ECIL Post, Kushaiguda, Hyderabad-500062, Andhra Pradesh

Country :	India

Financials (as on) :	31.03.2010

Date of Incorporation :	27.04.2004

Com. Reg. No.:	01- 042753

CIN No.: [Company Identification No.]	U31909AP2004PTC042753

TAN No.: [Tax Deduction & Collection Account No.]	HYDH01108C

Legal Form :	Private limited liability company

Line of Business :	Providing Solutions to defence force in the areas of Radars, EW and Communication

RATING & COMMENTS

MIRA’s Rating :

B (28)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 160000

Status :	Moderate

Payment Behaviour :	Slow

Litigation :	Clear

Comments :	Subject is a joint venture between HBL Power Systems Limited, India and ELTA Systems Limited, Israel. It is an established company having moderate track. There appears some accumulated losses recorded by the company. However, trade relations are reported as fair. Business is active. Payments are reported to be slow. The company can be considered for business dealings with some caution.

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

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

INFORMATION DECLINED BY

Management Non Co-operative.

LOCATIONS

Registered Office/ Work :	Plot No.: 21, 22 and 23, Pragathi Industrial. Area, ECIL Post, Kushaiguda, Hyderabad-500062, Andhra Pradesh, India
Tel. No.:	91-40-27131751/52/ 53
Fax No.:	91-40-27131754
E-Mail :	helaadmin@hela.in contact@hbl.in
Website:	http://www.hela.in

DIRECTORS

As on 14.09.2010

Name :	Mr. Jagadish Janardan Baxi
Designation :	Director
Address :	562, F, 4^th Floor, Premier Villa, New Bel Road, Bangalore- 560094, Karnataka, India
Date of Birth/Age :	30.10.1938
Date of Appointment :	24.01.2007
DIN No.:	00589912

Name :	Mr. Sukaran Singh
Designation :	Director
Address :	Flat No. 4B, Sett Minar Building, Pedder Road, Opposite Jaslok Hospital, Mumbai-400026, Maharashtra, India
Date of Birth/Age :	14.05.1969
Date of Appointment :	03.11.2010

Name :	Mr. Dan Eylon
Designation :	Nominee Director
Address :	22 Hasanov Str Gedera-70700, Israel
Date of Appointment :	02.02.2010
DIN No.:	03008318

Name :	Mr. Shalom Revivo
Designation :	Director
Address :	Jerusalen 242, Jerusalem-72080, Israel
Date of Birth/Age :	23.10.1966
Date of Appointment :	22.07.2008
DIN No.:	03154773

Name :	Mr. Ajit Bhavnani
Designation :	Director
Address :	B1A/4, DLF Phase -1, Gurgaon-122002, Haryana, India
Date of Birth/Age :	05.10.1946
Date of Appointment :	03.11.2010

Name :	Mr. Srinath Satyanarayana Subramanya Mikkilineni
Designation :	Director
Address :	Plot -528, Road # 25, Jurbilee Hills, Hyderabad-500033, Andhra Pradesh, India
Date of Birth/Age :	23.04.1969
Date of Appointment :	01.01.2009
Date of Ceasing:	03.11.2010
DIN No.:	00319175

Name :	Mr. Eyal Danan
Designation :	Director
Address :	Roten Street, 151, Hoshav Shilat-73188, Israel
Date of Birth/Age :	04.07.1957
Date of Appointment :	24.01.2007
Date of Ceasing:	02.02.2010
DIN No.:	02783937

Name :	Mr. Satish Kumar Paturi
Designation :	Director
Address :	7-1-29/D Begumpet, Hyderabad-500016, Andhra Pradesh, India
Date of Birth/Age :	14.01.1961
Date of Appointment :	09.09.2008
Date of Ceasing:	03.11.2010
DIN No.:	00088882

Name :	Mrs. Kavita Prasad
Designation :	Director
Address :	8-2-601, Road # 10, Banjara Hills, Hyderabad-500034, Andhra Pradesh, India
Date of Birth/Age :	21.02.1972
Date of Appointment :	01.01.2009
Date of Ceasing:	03.11.2010
DIN No.:`	00319292

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 14.09.2010

Names of Shareholders		No. of Shares
A J Prasad		46661
D Venkateswarlu		1339
HBL Power Systems Limited, Andhra Pradesh, India		100000
Flta Systems Limited, Israel		52000
Total		200000

Equity Share breakup (percentage of total equity)

AS ON [30.09.2010]

Category	Percentage
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	26.00
Bodies corporate	50.00
Directors or relatives of Directors	24.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Providing Solutions to defence force in the areas of Radars, EW and Communication

PRODUCTION STATUS AS ON 31.03.2010

Particulars	Unit	Installed Capacity	Actual Production

Microwave Components and Sub-Systems	Nos.	9600	4372

GENERAL INFORMATION

Customers:

ADE, Benguluru
Radar and Electronic Warfare Systems Manufacture under license from ELTA
Development and manufacture of Communication Systems including Satcoms on different . platforms
System Integration and evaluation on ground-based, airborne and maritime platforms
Design, development & manufacture of Microwave supercomponents, subsystems and Automatic Test Equipment (ATEs)
Installation and maintenance of Acquisition and Missile Guidance Radars on Ships, Ground and Airborne platform, man portable radars, EW and Communication Systems
Life Time Product Support, Indigenization and Import Substitution
Development of Systems Jointly with Customer Organizations
Functional partitioning of hardware and software
Subsystem and component design

No. of Employees :

Not Divulged by the Management

Bankers :

Centurion Bank of Punjab Limited

Pawani Plaza Commercial Complex, 6-3-398/A, Punjagutta, Hyderabad- 500082, Andhra Pradesh, India

State Bank of India, Secundrabad- 500003, India
HDFC Bank Limited

Facilities :

Secured Loans	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
From HDFC Bank	42.166	39.727
Interest Accrued and due	0.000	0.268
Total	42.166	39.995
Note: Secured by way of hypothecation of Vehicles, Plant and Machinery, Stocks and Book Debts and guaranteed by HBL Power Systems Limited and Elta Systems Limited.
Unsecured Loans	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
Bank Overdraft	0.000	5.784
Total	0.000	5.784


Banking Relations :	--

Auditors :
Name :	Brahmayya and Company Chartered Accountant
Address :	# 403 and 404, Golden Green Apartments, Irrum Manzil Colony, Hyderabad-500082, Andhra Pradesh, India
Tel No.:	91-40-23370002/ 4
Fax No.:	91-40-23370005
E mail:	hydbrahmayya@gmail.com

Joint Venture:	HBL Power Systems Limited (HBL) ELTA Systesm Limited (ELTA)

CAPITAL STRUCTURE

As On (31.03.2010)

Authorised Capital :

No. of Shares	Type	Value	Amount
2000000	Equity Shares	Rs.10/- Each	Rs.20.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
200000	Equity Shares	Rs.10/- Each	Rs.2.000 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		2.000	2.000	2.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		43.488	43.459	43.459
4] (Accumulated Losses)		[4.389]	[18.483]	[11.124]
NETWORTH		41.099	26.976	34.335
LOAN FUNDS
1] Secured Loans		42.166	39.995	14.057
2] Unsecured Loans		0.000	5.784	0.000
TOTAL BORROWING		42.166	45.779	14.057
DEFERRED TAX LIABILITIES		0.620	0.000	0.000

TOTAL		83.885	72.755	48.392

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		88.561	87.632	2.013
Capital work-in-progress		0.000	0.000	58.896

INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
Expenditure during the construction period, Pending Allocation		0.000	0.000	6.226

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	94.076	3.790	3.447
	Sundry Debtors	50.453	15.485	21.248
	Cash & Bank Balances	29.725	91.684	7.562
	Other Current Assets	0.000	0.000	0.215
	Loans & Advances	13.944	23.695	6.646
Total Current Assets		188.198	134.654	39.118
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	190.709	40.180	52.319
	Other Current Liabilities		107.785	4.564
	Provisions	2.165	1.566	0.978
Total Current Liabilities		192.874	149.531	57.861
Net Current Assets		[4.676]	[14.877]	[18.743]

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		83.885	72.755	48.392

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income from services	153.885	34.461	30.731
		Income From Sales		0.115	0.000
		Other Income		3.464	0.425
		TOTAL (A)	153.885	38.040	31.156

Less	EXPENSES
		Sub-Contracting Costs		13.074	19.305
		Material Cost		1.735	1.941
		Employee Costs		9.469	7.213
		Selling and Administrative Costs		16.776	8.239
		TOTAL (B)	136.521	41.054	36.698
			(including Depreciation and Financial Expenses)
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)			[3.014]	[5.542]

Less	FINANCIAL EXPENSES (D)			1.738	0.000

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)			[4.752]	[5.542]

Less/ Add	DEPRECIATION/ AMORTISATION (F)			1.938	0.485

	PROFIT BEFORE TAX (E-F) (G)		17.364	[6.690]	[6.027]

Less	TAX (H)		3.270	0.669	0.425

	PROFIT AFTER TAX (G-H) (I)		14.094	[7.359]	[6.452]

Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		[18.483]	[11.124]	[4.672]

	BALANCE CARRIED TO THE B/S		[4.389]	[18.483]	[11.124]

	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	137.758	33.853	13.692
	TOTAL EARNINGS		137.758	33.853	13.692

	IMPORTS
		Purchases of Electronic Components	112.511	1.252	1.135
		Capital Goods	27.410	7.482	24.070
	TOTAL IMPORTS		139.921	8.734	25.205

	Earnings Per Share (Rs.)		70.47	[36.80]	[32.26]

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	9.16	[19.35]	[20.71]

Net Profit Margin (PBT/Sales)	(%)	NA	[19.41]	[19.61]

Return on Total Assets (PBT/Total Assets}	(%)	6.27	[3.01]	[14.65]

Return on Investment (ROI) (PBT/Networth)		0.42	[0.25]	[0.18]

Debt Equity Ratio (Total Liability/Networth)		5.72	7.24	2.09

Current Ratio (Current Asset/Current Liability)		0.98	0.90	0.68

LOCAL AGENCY FURTHER INFORMATION

DETAILS OF SUNDRY CREDITORS

(Rs. in Millions)

Particulars	31.03.2010	31.03.2009	31.03.2008
Sundry Creditors
-Outstanding dues of Micro and Small Enterprises	NA	--	--
-Others	NA	40.180	52.319
Total	NA	40.180	52.319

Operations:

The company has earned an income of Rs. 15.388 Millions as compared to Last year’s 38.039 Millions registering an increase of 304% over the year. As compared to a loss of Rs. 7.359 Millions, the company has earned a net profit of Rs. 14.093 Millions for the current year. FY 2009-10 is the first full year of commercial operations after the establishment of the Microwave Project. The company has produced and sold 4372 Nos. of Microwave products as against 10 Nos. for the previous year. The company expects substantial inflow of orders in the coming year for its Microwave Products.

Contingent Liabilities and Capital Commitments (Not Provided for):

a) Estimated amount of contracts remaining to be executed on Capital account and not provided for, net of advances Rs. Nil ( 2009- Rs. 9.716 Millions)

b) Bank Guarantee outstanding towards various performance obligations Rs. 5.450 Millions ( 2009-6.404 Millions.)

c) The company has received a demand form the commercial Tax Officer, Hyderabad towards payment of value added tax amounting to Rs. 2.021 Millions for the period form March 1, 2006 to December 31, 2008. The company has appealed against the said demand and pending disposal of the same, no provision has been made in the financial statements. However an amount of Rs. 1.137 Millions was paid under protest and shown under Loans and advances.

Bankers Charges Report as per Registry

This form is for	Creation of charge
Corporate identity number of the company	U31909AP2004PTC042753
Name of the company	HBL ELTA AVIONICS SYSTEMS PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	8-2-601, Road No. 10, Banjara Hills, Hyderabad- 500062, Andhra Pradesh, India
Type of charge	Book Debts Movable Property Floating Charge
Particular of charge holder	Centurion Bank of Punjab Limited Pawani Plaza Commercial Complex, 6-3-398/A, Punjagutta, Hyderabad- 500082, Andhra Pradesh, India
Nature of description of the instrument creating or modifying the charge	Agreement of hypothecation of goods, vehicles plant and machinery, stock and book debts.
Date of instrument Creating the charge	22.08.2007
Amount secured by the charge	Rs.139.000 millions
Brief particulars of the principal terms an conditions and extent and operation of the charge	Rate of Interest CC-BPLR Minus 2.25% p.a IE. 12.75% p.a with monthly rests. Packaging Credit- BPLR Minus 3% i.e 12% p.a presently with monthly rests FBD-BPLR Minus 3% I.E 12% p.a presently with monthly rests TL-BPLR minus 2% I.E 13% p.a Presently with Monthly Rests. Terms of Repayment CC- 12 Months Packing Credit – 12 months FBD- 12 months TL-60 months INCL Motatorium of 12 months Margin CC-25% on Stocks and Book Debts upto 90 days Packing Credit- 10% on stocks and book debts. FBD: 10% TL- 25% Extent and Operation of the charge To cover loan amount plus costs, expenses, interest and other incidentals
Short particulars of the property charged	All tangible movable machineries, plant, properties, goods documents of title to goods, vehicles, assets book debts, outstanding, money receivable, claim bills, office, furniture, fixture, fitting, stores spares, equitable, computer etc. both present and future which may be installed or lying loose or in cases being in upon or about the borrowers premises godowns situated at 8-2-601, Road No.10, Banjara Hills, Hyderabad- 500034 or anywhere else.

Fixed Assets

Leasehold Improvements
Plant and Machinery
Electrical Installations
Furniture and Fixtures
Office Equipments
Computers
Vehicles

As Per Website Details

Subject, a joint venture of HBL Power Systems Limited. India and ELTA Systems Limited. Israel. HBL Power Systems Limited. is a leader in battery and power systems technology, which has now diversified into Microwave systems and sub-systems with a large team of competent and qualified Engineers with vast experience in specialized areas of expertise. ELTA Systems Israel is a subsidiary of Israel Aerospace Industries and one of Israel's leading Defense `Electronics companies with rich expertise in variety of areas like Intelligence, Electronic Warfare, Surveillance, Target Acquisition

They build a wide range of products from 500 MHz to 40 GHz, for both Military and Industrial applications. To expand the capabilities to cater for ever-growing market demands, HELA has set up a vast facility at fast growing industrial belt of Hyderabad, at Pragathi Nagar Industrial Area, Kushaiguda. This facility extends to upto 14,000 square feet of engineering and manufacturing facilities with 1,000 square feet of Class–10,000 clean room for RandD and 1,000 square feet of clean area for mass production.

Their management and technical team comprise technology specialists with vast experience in the RF and microwave industry with cutting edge technologies and working on the futuristic military applications. Theyare well versed with the industry to serve the three armed services along with various Defence organizations viz., DARE, DRDL, DLRL, DEAL, HAL, BEL and Space organizations viz., SAC, NARL, ISAC, etc

Subject plans to offer virtually every microwave building block needed for systems and sub-systems requirements. Their Quality Manual for processes and procedures is based on combinations of MIL standards, MIL handbooks, IPC standards, ANSI standards and ASTM standards

Subject has started operations in March 2004 and within a span of three-and-a-half years, could establish highly sophisticated assembly line with skilled and well–experienced manpower, fully automated instrumentation upto 40 GHz, HALT/HASS chamber and a variety of environmental test chambers for screening and qualification.

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.44.65
UK Pound	1	Rs.71.91
Euro	1	Rs.63.28

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--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		28

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.

MIRA INFORM REPORT

94.076

50.453

29.725

0.000

13.944

188.198

190.709

2.165

192.874

[4.676]

Unit