MIRA INFORM REPORT

Report Date :

28.05.2011

IDENTIFICATION DETAILS

Name :	LOMBARDINI INDIA PRIVATE LIMITED

Registered Office :	Post Box No. 754, Plot No. J – 2/1, MIDC, Industrial Area, Chikalthana, Aurangabad – 431 210, Maharashtra

Country :	India

Financials (as on) :	31.12.2009

Date of Incorporation :	27.04.2001

Com. Reg. No.:	11 - 131781

Capital Investment / Paid-up Capital :	Rs.1360.807 millions

CIN No.: [Company Identification No.]	U29111MH2001PTC131781

TAN No.: [Tax Deduction & Collection Account No.]	NSKL00431E

Legal Form :	Private Limited Liability Company

Line of Business :	Manufacturer of Engine spare parts.

No. of Employees :	100 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (26)

RATING

STATUS

PROPOSED CREDIT LINE

26-40

Capability to overcome financial difficulties seems comparatively below average.

Small

Maximum Credit Limit :	USD 1600000

Status :	Moderate

Payment Behaviour :	Slow

Litigation :	Clear

Comments :	Subject is an established company and a subsidiary of Lombardini, Italy. Profitability of the company is under severe pressure. There are huge 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.

INFORMATION PARTED BY

Name :	Mr. Suhas Kulkarni
Designation :	Marketing Manager
Contact No.:	91-9922504058
Date :	26.05.2011

LOCATIONS

Registered Office/Factory :	Post Box No. 754, Plot No. J – 2/1, MIDC, Industrial Area, Chikalthana, Aurangabad – 431210, Maharashtra, India
Tel. No.:	91-240-2471452 / 2471451
Mobile No. :	91-9922504058 (Mr. Suhas Kulkarni)
Fax No.:	91-240-2486234 / 2475889
E-Mail :	info@lombardini.it sjjoshi@lombardini.it
Website :	www.lombardini.it
Area :	10000 Sq. ft.
Owned :	Owned

DIRECTORS

As on 29.06.2010

Name :	Mr. Gianni Borghi
Designation :	Director
Address :	Marrio Simonazzi 9, Albinea – 42020, Italy
Date of Birth/Age :	14.04.1940
Date of Appointment :	07.05.2001
DIN No. :	01830359

Name :	Mr. Giuseppe Bava
Designation :	Managing Director
Address :	V.G. Tiraboschi 15, Milan, 20135, Italy
Date of Birth/Age :	14.04.1959
Date of Appointment :	15.10.2009
DIN No. :	02845330

Name :	Mr. Richard James Fotsch
Designation :	Director
Address :	1245, Orchard Lane, ELM Grove, Wisconsin – 53122, USA
Date of Birth/Age :	06.05.1955
Date of Appointment :	22.06.2007
DIN No. :	01761153

Name :	Mr. Sanjay Shyamkant Bondre
Designation :	Director
Address :	C 503, Spartan Heights, 16/17, Richmond Road, Bangalore – 560 025
Date of Birth/Age :	25.08.1955
Date of Appointment :	23.07.2007
DIN No. :	00792845

KEY EXECUTIVES

Name :	Mr. Suhas Kulkarni
Designation :	Marketing Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 29.06.2010

Names of Shareholders		No. of Shares
Lombardini SRL A SOCI UNICO (Italy)		6804035244
Borghi Gianni		1
Total		6804035245

AS ON 29.06.2010

Category		Percentage of Holding
Foreign Holdings (Foreign institutional investor(s), Foreign Companies(s) Foreign Financial Institution (s), Non – Resident(s) or Overseas Corporate Bodies or Others		100.00
Total		100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Engine spare parts.

Products :

Particulars	ITC Code
Internal Combustion Petrol or Gasoline Engines	84.07
Internal Combustion Diesel Engines	84.08
Parts for Internal Combustion Engines	84.09

Exporter :

Products :

Engine Spare Parts

Countries :

Italy

Imports :

Products :

Raw Material

Countries :

Italy

Terms :

Selling :

L/C, Cash and Credit (30 / 60 / 90 days)

Purchasing :

L/C, Cash and Credit (30 / 60 / 90 days)

PRODUCTION STATUS (31.12.2009)

Particulars	Unit	Installed Capacity	Actual Production
Engines	Nos	60000	17922
Gensets	Nos	50000	366

GENERAL INFORMATION

Customers :

End users and OEM’s

No. of Employees :

100 (Approximately)

Bankers :

Not Available

Facilities :

Unsecured Loans	31.12.2009 (Rs. in Millions)	31.12.2008 (Rs. in Millions)
From Bank
Working Capital Demand Loan	550.000	670.000
Cash Credit	13.596	0.000
From Other	0	0
Sales Tax Deferral Loan under 1993 Package Scheme notified by Government of Maharashtra	17.212	17.211
Total	580.808	687.211

Notes :

Working Capital Demand Loan and Cash Credit is covered by Corporate Guarantee of USD 25 Million from M/s.Kohler Co., US, the Ultimate holding company and the said facilities falls due for review by the Bank in May 2010 and response from the bankers is awaited.
Sales Tax Deferral Loan - Repayable in five equal annual installments from December 1, 2017 to November 30. 2021


Banking Relations :	--

Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountant
Address :	12, Dr. Annie Besant Road, Opposite Shiv Sagar Estate, Worli, Mumbai – 400 018, Maharashtra, India
Pan No :	AACFD4815A
Tel No :	91-22-66679000
Fax No :	91-22-66679100

Holding Company :	Lombardini s.r.l., Italy

Ultimate Holding Company :	Kohler Company, Wisconsin – USA and its branches in Singapore (w.e.f. June 23, 2007)

Subsidiaries :	Kohler Asia Pacific Limited, Singapore SDMO Industries SAS, France Changzhou KOHLER Power Systems Limited, China Kohler India Corporation Private Limited, India Kohler Sterling, USA.

CAPITAL STRUCTURE

AS ON 31.12.2010

Authorised Capital :

No. of Shares	Type	Value	Amount

7500000000	Equity Shares	Rs.0.20/- each	Rs.1500.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

6804035245	Equity Shares	Rs.0.20/- each	Rs.1360.807 millions

NOTE:

The above Equity Shares of Rs.0.20 each are held by Lombardini s.r.l., a Socio Unico, Italy, the Holding company and its nominee. The ultimate Holding company is Kohler Company, Wisconsin – USA .

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2009	31. 12.2008	31.12.2007 [10 Months]
SHAREHOLDERS FUNDS
1] Share Capital		1360.807	682.907	290.217
2] Share Application Money		0.000	677.900	392.689
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		(952.547)	(709.332)	(442.007)
NETWORTH		408.260	651.475	240.899
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		580.808	687.211	476.211
TOTAL BORROWING		580.808	687.211	476.211
DEFERRED TAX LIABILITIES		0.000	0.000	0.000

TOTAL		989.068	1338.686	717.110

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		530.926	542.682	369.101
Capital work-in-progress		83.105	23.582	99.229

INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	378.512	309.304	251.307
	Sundry Debtors	181.306	125.387	171.057
	Cash & Bank Balances	37.653	615.733	93.598
	Other Current Assets	5.083	4.015	0.000
	Loans & Advances	219.908	159.343	113.950
Total Current Assets		822.462	1213.782	629.912
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	334.681	375.968	332.417
	Other Current Liabilities	78.512	39.563	38.746
	Provisions	34.232	25.829	9.969
Total Current Liabilities		447.425	441.360	381.132
Net Current Assets		375.037	772.422	248.780

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		989.067	1338.686	717.110

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2009	31.12.2008	31.12.2007 (10 Months)
	SALES
		Income
		Other Income
		TOTAL	NA	784.663	NA

Less	EXPENSES
		Office Expenses
		Administrative Expenses
		Advertising Expenses
		TOTAL	NA	518.267	NA

	PROFIT BEFORE TAX		NA	266.396	NA

Less	TAX		NA	(0.929)	NA

	PROFIT AFTER TAX		NA	267.325	NA

	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	188.233	122.389	43.597
	TOTAL EARNINGS		188.233	122.389	43.597

	IMPORTS
		Raw Materials	283.983	185.965	106.226
		Capital Goods	47.778	0.000	28.478
	TOTAL IMPORTS		331.761	185.965	134.704

	Earnings Per Share (Rs.)		(0.04)	(0.18)	(5.48)

Particulars

31.12.2010

31.12.2009

Sales Turnover (Approximately)

1300.000

930.000

Expected Sales ( 2011) : Rs.1500.000 Millions

Expected Sales ( 2012) : Rs.2000.000 Millions

The above information has been parted by Mr. Suhas Kulkarni

KEY RATIOS

PARTICULARS		31.12.2009	31. 12.2008	31.12.2007 [10 Months]
PAT / Total Income	(%)	NA	34.07	NA

Return on Total Assets (PBT/Total Assets}	(%)	NA	15.17	NA

Return on Investment (ROI) (PBT/Networth)		NA	0.41	NA

Debt Equity Ratio (Total Liability/Networth)		2.52	1.73	1.58

Current Ratio (Current Asset/Current Liability)		1.84	2.75	1.65

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS :

(Rs. in Millions)

Particulars	31.12.2009	31.12.2008	31.12.2007 (10 Months)
Sundry Creditors
Dues to Micro and Small Enterprises	1.551	0.000	0.000
Dues to Others	333.130	375.968	332.417
Total	334.681	375.968	332.417

CONTINGENT LIABILITIES

(Rs. in Millions)

Particulars	31.12.2009	31.12.2008
Guarantees issued by Banks at the request of the Company to customs department for fulfilment of export obligation under EPCG scheme.	15.871	15.852
Vendor claims against the Company not acknowledged as debt	1.100	2.400
Total	16.971	18.252

STATE OF AFFAIRS:

The net sales of the Company during the period was Rs.934 million against net sales of Rs.769 million achieved during the year ended 31^st December, 2008.

Though the Company has been successful in achieving the higher turnover in last two years by introduction of new lines of production including for Genset, it continues to suffer losses on account of lower margins and increased cost of operations. With its aggressive growth plans, the Company has achieved higher turnover and reduced losses and is implementing stringent steps to control the expenditure which would make them profitable and improve its net worth position which at present is eroded by more than 50%. In the past, the Company got support from its holding company as and when required and the holding company has expressed unconditional continuous financial support to the Company in future to meet its obligation, as they fall due.

FINANCE:

The Company is implementing stringent steps to control the expenditure which would make them profitable and improve its net worth position.

NOTE:

The Company has cancelable as well as non cancelable leasing arrangements for office and residential premises. The Company has also sublet a portion of its premise and earned rental income on the same during the current year. The net lease rental of Rs.2.590 millions net of income from sublet portion amounting to Rs.0.175 million has been included under the head ‘Manufacturing, Administrative and other Expenses Rent’ and forming part of the Profit and Loss Account.

FIXED ASSETS:

Leasehold Land
Factory Buildings
Non-Factory Building
Plant and Machinery
Electric Installation
Tools, Jigs and Fixtures
Computers
Office Equipments
Furniture and Fixtures
Vehicles

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 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 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.74.30
Euro	1	Rs.64.40

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	2
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	--
--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	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		26

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

378.512

309.304

181.306

125.387

37.653

615.733

5.083

4.015

219.908

159.343

822.462

1213.782

334.681

375.968

78.512

39.563

34.232

25.829

447.425

441.360

375.037

772.422

Unit