MIRA INFORM REPORT

Report Date :

04.11.2011

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) :	31.12.2010

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 and Exporter of Automotive and Non Automotive Engines, Diesel Engines, Tri Fuel Engines etc.

No. of Employees:	100 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (26)

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

Maximum Credit Limit :	USD 610000

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 DECLINED BY

Name :	Mr. Sudhir Joshi
Designation :	Finance Department
Contact No.:	91-9922504055
Date :	02.11.2011

LOCATIONS

Registered Office/ Factory :	Post Box No. 754, Plot No. J – 2/1, MIDC, Industrial Area, Chikalthana, Aurangabad – 431 210, Maharashtra, India
Tel. No.:	91-240- 2471451
Mobile No.:	91-9922504055 (Mr. Sudhir Joshi)
Fax No.:	91-240-2486234
E-Mail :	sjjoshi@lombardini.it
Website :	www.lombardini.it
Area :	10000 Sq. ft.
Location :	Owned

DIRECTORS

As on 30.06.2011

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

Name :	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

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U31101KA1999PTC025725	Kohler India Corporation Private Limited	Director	29-09-04	29-09-04	-	Active	NO

Name :	Mr. Sanjay Shyamkant Bondre
Designation :	Director
Address :	503, Spartan Heights, 16/17, Richmond Road, Bangalore – 560025, India
Date of Birth/Age :	25.08.1955
Date of Appointment :	23.07.2007
DIN No. :	00792845

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U31101KA1999PTC025725	Kohler India Corporation Private Limited	Director	29-09-04	29-09-04	-	Active	NO

Name :	Mr. Prakash Bhalekar
Designation :	Managing Director
Address :	76, Aspen Greens, Nirvana Country, Gurgaon – 122002, Haryana, India
Date of Birth/Age :	09.12.1968
Date of Appointment :	05.10.2010
DIN No. :	00063523

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U29130TN1997FTC037962	Faurecia Emissions Control Technologies India Private Limited	Director	04-09-03	04-09-03	12-12-08	Active	NO
2	U34300MH1993PLC073227	Spicer India Limited	Alternate director	28-09-07	27-02-04	23-09-08	Active	NO
3	U34300PN1997PLC107619	Behr India Limited	Director	10-05-04	10-05-04	30-09-08	Active	NO
4	U29117PN2001PLC018092	Victor Gaskets India Limited	Director	14-12-05	14-12-05	30-09-08	Active	NO
5	U40300DL2009PTC187406	Infinia Solar Private Limited	Director	09-02-09	09-02-09	-	Active	NO
6	U28110KA2008PTC046581	Pentair Technical Products India Private Limited	Director	28-06-10	15-02-10	06-09-10	Active	NO
7	U29111MH2001PTC131781	Lombardini India Private Limited	Managing director	05-10-10	05-10-10	-	Active	NO
8	U36998DL2010PTC209687	Nirvana Crafthouse Private Limited	Director	22-10-10	22-10-10	-	Active	NO

KEY EXECUTIVES

Name :	Mr. Sudhir Joshi
Designation :	Finance Department

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2011

Names of Shareholders		No. of Shares
Lombardini SRL A SOCIA UNICO, Italy		6804035244
Borghi Gianni		1
Total		6804035245

Equity Share Break up (Percentage of Total Equity)

As on 30.06.2011

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 and Exporter of Automotive and Non Automotive Engines, Diesel Engines, Tri Fuel Engines etc.

PRODUCTION STATUS AS ON 31.12.2010

Particulars	Unit	Installed Capacity	Actual Production
Engines	Nos	60000	31559
Gensets	Nos	50000	687

GENERAL INFORMATION

No. of Employees :

100 (Approximately)

Bankers :

Not Available

Facilities :

Unsecured Loans	31.12.2010 (Rs. in Millions)	31.12.2009 (Rs. in Millions)
From Bank
Working Capital Demand Loan	0.000	550.000
Cash Credit	845.794	13.596
From Other
Sales Tax Deferral Loan under 1993 Package Scheme notified by Government of Maharashtra	17.211	17.212
Total	863.005	580.808

Notes :

Working Capital Demand Loan and Cash Credit is covered by Corporate Guarantee of USD 30 Million (previous year USD 25 Millions) from M/s.Kohler Company, US, the Ultimate holding company and the said facilities falls due by the Bank in October 2011 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 Accountants
Address :	12, Dr. Annie Besant Road, Opposite Shiv Sagar Estate, Worli, Mumbai – 400018, Maharashtra, India
Tel. No.:	91-22-66679000
Fax No.:	91-22-66679100
PAN No :	AACFD4815A

Holding Company :	Lombardini s.r.l. a Socio Unico, Italy

Ultimate Holding Company:	Kohler Company, Wisconsin – USA and its branches in Singapore

Fellow 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		31.12.2010	31.12.2009	31.12.2008
SHAREHOLDERS FUNDS
1] Share Capital		1360.807	1360.807	682.907
2] Share Application Money		0.000	0.000	677.900
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		(1209.204)	(952.547)	(709.332)
NETWORTH		151.603	408.260	651.475
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		863.005	580.808	687.211
TOTAL BORROWING		863.005	580.808	687.211
DEFERRED TAX LIABILITIES		0.000	0.000	0.000

TOTAL		1014.608	989.068	1338.686

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		510.569	530.926	542.682
Capital work-in-progress		105.926	83.105	23.582

INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	490.850	378.512	309.304
	Sundry Debtors	257.892	181.306	125.387
	Cash & Bank Balances	27.029	37.653	615.733
	Other Current Assets	6.051	5.083	4.015
	Loans & Advances	312.480	219.908	159.343
Total Current Assets		1094.302	822.462	1213.782
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	514.661	334.681	375.968
	Other Current Liabilities	137.627	78.512	39.563
	Provisions	43.901	34.232	25.829
Total Current Liabilities		696.189	447.425	441.360
Net Current Assets		398.113	375.037	772.422

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		1014.608	989.068	1338.686

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2010	31.12.2009	31.12.2008
	SALES
		Income	1556.000	934.000	784.663
		Other Income	NA	NA
		TOTAL	NA	NA	784.663

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

	PROFIT/ (LOSS) BEFORE TAX		NA	NA	266.396

Less	TAX		NA	NA	(0.929)

	PROFIT/ (LOSS) AFTER TAX		(256.657)	(243.214)	267.325

	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	369.811	188.233	122.389
		Income from design centre services	15.394	0.000	0.000
	TOTAL EARNINGS		385.205	188.233	122.389

	IMPORTS
		Raw Materials	541.273	283.983	185.965
		Capital Goods	3.562	47.778	0.000
	TOTAL IMPORTS		544.835	331.761	185.965

	Earnings/ (Loss) Per Share (Rs.)		(0.04)	(0.04)	(0.18)

KEY RATIOS

PARTICULARS		31.12.2010	31.12.2009	31.12.2008
PAT / Total Income	(%)	NA	NA	34.07

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

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

Debt Equity Ratio (Total Liability/Networth)		10.28	2.52	1.73

Current Ratio (Current Asset/Current Liability)		1.57	1.84	2.75

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS:

(Rs. in Millions)

Particulars	31.12.2010	31.12.2009	31.12.2008
Sundry Creditors
Dues to Micro and Small Enterprises	1.030	1.551	0.000
Dues of creditors other than micro enterprises and small enterprises	513.631	333.130	375.968
Total	514.661	334.681	375.968

STATE OF AFFAIRS:

The net sales of the Company during the period was Rs. 1556 Million against net sales of Rs. 934 Million achieved during the year ended 31^st December, 2009.

Though the Company achieved higher turnover in last two years, it continues to suffer losses on account of lower margins and low capacity utilization. The management has aggressive growth plans and coupled with steps to control expenditure, expects profitable operations from 2012. currently, significantly portion of the net worth stands eroded and the operations are funded through extended credits by the holding company/ group companies and bank credit against corporate guarantee issued by the ultimate holding company. As in the past, the holding company has issued a letter committing to continue financial support to the company.

CONTINGENT LIABILITIES

(Rs. in Millions)

Particulars	31.12.2010	31.12.2009
Guarantees issued by Banks at the request of the Company to customs department for fulfilment of export obligation under EPCG scheme.	15.871	15.871
Vendor claims against the Company not acknowledged as debt	1.100	1.100
c) Penal interest for breach of loan covenants	Not ascertained/ not material amount	--
d) In the year 2008, one of the customer of the company filed a suit before the Honourable court, Gondal, Rajkot against the company, its holding and ultimate holding company demanding Rs. 430.848 Millions plus interest @24% (amount unascertained) from the date of the filing of the complaints on account of recovery of payments for defective engines, recovery of expenses for repair and replacement of defective engines. Loss of goodwill, etc. the company has filed a statement denying the claims and the contentions and have also filed as special civil suit before the Honourable, court, Aurangabad for recovery of outstanding receivables in respect of other group company of the said customer together with interest in that year. The lawyers of the company based on current assessment of the status reaffirmed their earlier view that it is difficult to estimate the potential liability which is further dependent on the party’s ability to substantiate all the losses that it alleges it has suffered . on that bases, the company is of the opinion that outflow of resources require to settle the obligation, if any, is not probable and no provision is considered necessary other than the prudent provision made in earlier years against the receivables from the said party.	Not ascertained	Not ascertained
Total	16.971	16.971

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 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. 49.37
UK Pound	1	Rs. 78.49
Euro	1	Rs. 67.59

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

490.850

378.512

309.304

257.892

181.306

125.387

27.029

37.653

615.733

6.051

5.083

4.015

312.480

219.908

159.343

1094.302

514.661

334.681

375.968

137.627

78.512

39.563

43.901

34.232

25.829

696.189

398.113

375.037

772.422

NA

NA

NA

10.28

1.57

Unit