MIRA INFORM REPORT

Report Date :

07.12.2012

IDENTIFICATION DETAILS

Name :	NELCO LIMITED
Registered Office :	MIDC, Plot No. EL 6, TTC Industrial Area, Electronics Zone, Mahape, Navi Mumbai – 400710, Maharashtra
Country :	India
Financials (as on) :	30.09.2011
Date of Incorporation :	31.08.1940
Com. Reg. No.:	11-003164
Capital Investment / Paid-up Capital :	Rs. 228.175 Millions
CIN No.: [Company Identification No.]	L32200MH1940PLC003164
TAN No.: [Tax Deduction & Collection Account No.]	MUMN09602F / MUMN13038E
PAN No.: [Permanent Account No.]	AAACTI983C
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer, trader and seller of consumer electronic products, sale of business systems and office products.
No. of Employees :	295 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (50)

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

Maximum Credit Limit :	USD 1020000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a part of Tata Group. It is established company having good track record. Performance capacity of the company seems to be high. But there appears slight loss in the current year recorded by the company. However, general financial position of the company is good and it receive good support from its group company. Trade relations are reported to be fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered 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.

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	Long term loan : (CRISIL) A
Rating Explanation	Having adequate degree of safety regarding timely servicing of financial obligation. It carry low credit risk.
Date	July 2012

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

INFORMATION DENIED

MANAGEMENT NON CO-OPERATIVE

LOCATIONS

Registered Office/ Factory :	MIDC, Plot No. EL 6, TTC Industrial Area, Electronics Zone, Mahape, Navi Mumbai – 400710, Maharashtra, India
Tel. No.:	91-22-27681880 / 67399100 / 55918728
Fax No.:	91-22-27686797 / 67399561 / 55918787
E-mail:	services@nelco.com services@nelcoin.com v.rajgopalan@nelcoin.com girish.kirkinde@nelcoin.com
Website:	www.nelcoin.com
SALES OFFICE:
Bangalore Unit :	3^rd Floor, No. 15/17/19, Sri Laxmi Complex, St. Saint Mark’s Road, Bangalore – 560001, Karnataka, India
Tel. No.:	91-80-51121840 / 25550170
Fax No.:	91-80-51121842 / 25550173
Secunderabad Unit	Plot No. 65, Paigah Colony, Behind Anand Theatre, Off Sardar Patel Road, Secunderabad – 500003, Andhra Pradesh, India
Tel. No.:	91-40-27903824
Fax No.:	91-40-27903272
Kolkata Unit :	Trust House, 1^st Floor, 32-A, Chittaranjan Avenue, Kolkata – 700012, West Bengal, India
Tel. No.:	91-33-22121904 / 22121905
Fax No.:	91-33-22121520
Chennai Unit:	Flat No. 1-D, 1st Floor, New No. 75 and 77 (Old No. 41 and 41A) K. G. Marina Bay, Santhome High Road, Santhome, Chennai – 600004, Tamilnadu, India
Jamshedpur Unit :	Kasi Kunj, Road No. 2, Contractor’s Area, Bistipur, Jamshedpur – 831001, Jharkhand, India
Tel. No.:	91-657-227766 / 227767
Fax No.:	91-657-227765
Delhi Unit:	702/ 703, Vikram Towers, 16 Rajindra Place, New Delhi - 110008, India
Tel. No.:	91-11-55402165 / 68
Fax No.:	91-11-25863878

DIRECTORS

AS ON 30.09.2011

Name :	Mr. R N Tata
Designation :	Chairman Emeritus
Name :	Mr. P R Menon
Designation :	Director
Date of Birth/Age :	23.01.1946
Qualification :	Chemical Engineer, IIT, Kharagpur
Name :	Mr. R R Bhinge
Designation :	Director
Date of Birth/Age :	29.05.1952
Qualification :	B. Tech. Hons. (Electrical) from IIT, Mumbai. Post Graduation in Business Administration from IIM, Ahmedabad.
Name :	Mr. V K Deshpande
Designation :	Director
Name :	Mr. P K Ghose
Designation :	Director
Name :	Mr. S Ramakrishnan
Designation :	Director
Name :	Mr. S. K. Gupta
Designation :	Director
Date of Birth/Age :	09.09.1942
Qualification :	B.Sc. B.E.(Electrical)
Name :	Mr. B. Gopal
Designation :	Director (w.e.f. 14th November, 2011)
Date of Birth/Age :	25.07.1953
Qualification :	B. Tech. (Electronics) from IIT, Madras
Name :	K. A. Mahashur
Designation :	Executive Director

KEY EXECUTIVES

Name :	Mr. Girish V. Kirkinde
Designation :	Company Secretary
Name :	P. J. Nath
Designation :	Chief Executive Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2012

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Bodies Corporate	11432590	50.10
Sub Total	11432590	50.10
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	11432590	50.10
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	10850	0.05
Financial Institutions / Banks	20390	0.09
Central Government / State Government(s)	82160	0.36
Foreign Institutional Investors	870010	3.81
Sub Total	983410	4.31
(2) Non-Institutions
Bodies Corporate	1506666	6.60
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	7696378	33.73
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	1198756	5.25
Any Others (Specify)	600	0.00
Trusts	600	0.00
Sub Total	10402400	45.59
Total Public shareholding (B)	11385810	49.90
Total (A)+(B)	22818400	100.00
© Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	22818400	0.00

Shareholding of securities (including shares, warrants, convertible securities) of persons belonging to the category Promoter and Promoter Group

Sl. No.	Name of Shareholders	No. of Shares	As a % of
1	Tata Power Company Limited	1,10,99,630	48.64
2	Tata Sons Limited	2,150	0.01
3	Tata Hydro Electric Power Supply Company Limited	1,050	0.00
4	Tata Investment Corporation Limited	350	0.00
5	Titan Industries Limited	1,000	0.00
6	Aftaab Investment Company Limited	3,28,410	1.44
	Total	1,14,32,590	50.10

Shareholding of securities (including shares, warrants, convertible securities) of persons belonging to the category Public and holding more than 1% of the total number of shares

Sl. No.	Name of Shareholders	No. of Shares	As a % of
1	Schlumberger Limited	866460	3.80
	Total	866460	3.80

BUSINESS DETAILS

Line of Business :

Manufacturer, trader and seller of consumer electronic products, sale of business systems and office products. 

Products :

Item Code No.	Product Description
853710	Solid State Variable Speed Drives
851730	Electronic Switching / Data Communication
847110	High Speed Data Acquisition System

PRODUCTION STATUS (AS ON 30.09.2011)

Particulars	Unit	Installed Capacity	Actual Production
Variable Speed Drives	Nos	2500	15
Power Converters	Nos	24	--
Auxiliary Converters	Nos	50	17
Control Electronics	Nos	60	--
Converters Assemblies and Equipments	Nos	--	8
Supervisory Control and Data Acquisition Systems - Assemblies and Equipment	Nos	700	--
UGS / GPS - Assemblies and Equipments	Nos	1025	299
Automatic Whether Station (AWS)	Nos	--	2
Fencing Equipments and Networking	Nos	--	7
CCTV Systems	Nos	--	27

Notes:

The installed capacity has been certified by management, which the auditors have relied on without verification as this is a technical matter. Further Item no 8, 9, and 10 are made to order assemblies of various sizes and installed capacity is not ascertainable.

GENERAL INFORMATION

No. of Employees :

295 (Approximately)

Bankers :

Ø Bank of India

Ø Allahabad Bank

Ø Union Bank of India

Ø Calyon Bank

Ø Axis Bank Limited

Facilities :

Secured Loans	30.09.2011	30.09.2010
	(Rs. In Millions)
Cash Credit with Banks	1.898	0.000
Term Loans from The Zoroastrian Co-op. Bank Limited	17.694	30.479
Total	19.592	30.479
In respect of the above term loans, Rs. 9.938 Millions (Previous Year Rs.14.194 Millions) is due and repayable within a year. NOTES : a) Cash Credit with Banks are secured by hypothecation of all tangible moveable assets, including stocks of raw materials, finished goods, goods-in-process, book-debts, monies receivable and a second charge on the fixed assets of the company. b) Term Loans from The Zoroastrian Co-operative Bank Limited are secured by pari-passu first charge both on the present and future fixed assets, (all tangible moveable machinery and plant) of the company.
Unsecured Loans	30.09.2011	30.09.2010
	(Rs. In Millions)
Deferred Sales Tax Liability (Under the SICOM Incentive Scheme) (repayable within one year Rs 4.673 Millions (Previous Year Rs. 5.567 Millions)	20.188	25.755
Short Term Loans
- From Banks	250.000	350.000
- Inter Corporate Deposit (Others)	242.500	322.500
Total	512.688	698.255

Banking Relations :	--
Solicitors :	Ø Mulla and Mulla and Craigie Ø Blunt and Caroe
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Address :	Mumbai, Maharashtra, India
Holding company :	The Tata Power Company Limited
Subsidiary :	Tatanet Services Limited
Associate :	Nelito Systems Limited

CAPITAL STRUCTURE

AS ON 30.09.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
25,000,000	Equity Shares	Rs. 10/- each	Rs. 250.000 Millions
2,500,000	Redeemable Preference Shares	Rs. 100/- each	Rs. 250.000 Millions
	Total		Rs. 500.000 Millions

Issued :

No. of Shares	Type	Value	Amount
22,496,370	Equity Shares of Rs.10/- each fully paid-up for payment in cash (including 939 Equity Shares pending allotment)	Rs.10/- each	Rs. 224.964 Millions
5,370	Equity Shares of Rs.10/- each issued as fully paid-up otherwise than in cash pursuant to contracts dated 23rd October, 1940	Rs.10/- each	Rs. 0.054 Million
316,660	Equity Shares of Rs.10/- each issued to shareholders of the erstwhile General Radio and Appliances Limited in terms of the Scheme of Amalgamation	Rs.10/- each	Rs. 3.167 Millions
	Total		Rs. 228.185 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
22,495,431	Equity Shares of Rs.10/- each fully paid-up for payment in cash	Rs.10/- each	Rs. 224.954 Millions
5,370	Equity Shares of Rs.10/- each issued as fully paid-up otherwise than in cash pursuant to contracts dated 23rd October, 1940	Rs.10/- each	Rs. 0.054 Million
316,660	Equity Shares of Rs.10/- each issued to Shareholders of the erstwhile General Radio and Appliances Limited in terms of the Scheme of Amalgamation	Rs.10/- each	Rs. 3.167 Millions
	Total		Rs. 228.175 Millions

Note:

Of the above

a) 11,099,630 (Previous Year 11,099,630) Equity Shares are held by The Tata Power Company Limited, the Holding Company.

b) 328,410 (Previous Year 328,460) Equity Shares are held by the Aftaab Investments Company Limited - Subsidiary of The Tata Power Company Limited, the Holding Company.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		30.09.2011	30.09.2010	30.09.2009
SHAREHOLDERS FUNDS
1] Share Capital		228.175	228.175	228.175
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		28.659	194.023	33.216
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		256.834	422.198	261.391
LOAN FUNDS
1] Secured Loans		19.592	30.479	208.348
2] Unsecured Loans		512.688	698.255	754.529
TOTAL BORROWING		532.280	728.734	962.877
DEFERRED TAX LIABILITIES		0.000	0.000	3.260
TOTAL		789.114	1150.932	1227.528
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		261.515	208.752	218.382
Capital work-in-progress		1.471	2.550	3.635
INVESTMENT		19.825	19.825	19.825
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	189.627	139.841	304.533
	Sundry Debtors	754.634	1108.620	1512.110
	Cash & Bank Balances	49.988	51.917	155.798
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	354.630	335.081	318.509
Total Current Assets		1348.879	1635.459	2290.950
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	471.587	295.872	880.980
	Other Current Liabilities	220.705	269.312	300.617
	Provisions	150.284	150.470	134.242
Total Current Liabilities		842.576	715.654	1315.839
Net Current Assets		506.303	919.805	975.111
MISCELLANEOUS EXPENSES		0.000	0.000	10.575
TOTAL		789.114	1150.932	1227.528

PROFIT & LOSS ACCOUNT

	PARTICULARS		30.09.2011	30.09.2010	30.09.2009
	SALES
		Income	1112.779	1394.554	3404.475
		Other Income	21.874	33.678	57.979
		TOTAL	1134.653	1428.232	3462.454
Less	EXPENSES
		Raw Materials, Finished and Semi-Finished Products	586.205	705.084	2196.711
		Personnel	227.218	270.462	377.132
		Operating and Other Expenses	412.514	517.114	594.962
		TOTAL	1225.937	1492.660	3168.805
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		(91.284)	(64.428)	293.649
Less	FINANCIAL EXPENSES		64.815	127.256	182.528
	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION		(156.099)	(191.684)	111.121
Less/ Add	DEPRECIATION/ AMORTISATION		47.653	43.696	83.345
	PROFIT/ (LOSS) BEFORE EXCEPTIONAL ITEMS AND TAXATION		(203.752)	(235.380)	27.776
Less/ Add	EXCEPTIONAL ITEMS		28.333	519.672	103.653
	PROFIT/ (LOSS) BEFORE TAX		(175.419)	284.292	131.429
Less	TAX		(10.055)	70.270	98.630
	PROFIT/ (LOSS) AFTER TAX		(165.364)	214.022	32.799
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		169.023	33.216	16.434
Less	APPROPRIATIONS
		Transfer to General Reserve	0.000	25.000	0.000
		Proposed Dividend	0.000	45.635	13.690
		Tax on Proposed Dividend	0.000	7.580	2.327
	BALANCE CARRIED TO THE B/S		3.659	169.023	33.216
	EARNINGS IN FOREIGN CURRENCY
		Engineering / Software Services	4.891	4.553	16.322
		Exports of goods calculated on FOB basis	30.169	28.434	39.760
	TOTAL EARNINGS		35.060	32.987	56.082
	IMPORTS
		Raw Materials and Component	27.713	191.901	612.990
		Finished Goods	208.554	194.765	992.703
		Capital Goods	0.000	3.421	9.216
	TOTAL IMPORTS		236.267	390.087	1614.909
	Earnings/ (Loss) Per Share (Rs.)		(7.25)	9.38	1.44

QUARTERLY RESULTS

PARTICULARS	31.12.2011	31.03.2012	30.06.2012	30.09.2012
	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Sales Turnover	261.300	482.600	355.600	291.600
Total Expenditure	244.100	442.400	334.600	269.660
PBIDT (Excl OI)	17.200	40.200	21.000	21.940
Other Income	15.000	0.600	0.400	10.660
Operating Profit	32.200	40.800	21.400	32.600
Interest	16.300	20.700	24.300	25.700
Exceptional Items	0.000	0.000	26.800	0.000
PBDT	15.900	20.100	23.900	6.900
Depreciation	14.100	13.900	13.800	14.000
Profit Before Tax	1.800	6.200	10.100	(7.100)
Tax	0.000	0.000	0.000	0.000
Provisions and Contingencies	0.000	0.000	0.000	0.000
Reported PAT	1.800	6.200	10.100	(7.100)
Extraordinary Items	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000
Net Profit	1.800	6.200	10.100	(7.100)

KEY RATIOS

PARTICULARS		30.09.2011	30.09.2010	30.09.2009
PAT / Total Income	(%)	(14.57)	14.99	0.95
Net Profit Margin (PBT/Sales)	(%)	(15.76)	20.39	3.86
Return on Total Assets (PBT/Total Assets}	(%)	(10.89)	15.42	5.24
Return on Investment (ROI) (PBT/Networth)		(0.68)	0.67	0.50
Debt Equity Ratio (Total Liability/Networth)		5.35	3.44	8.72
Current Ratio (Current Asset/Current Liability)		1.60	2.29	1.74

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS:

Particulars	30.09.2011	30.09.2010	30.09.2009
	(Rs. In Millions)
Sundry Creditors (other than micro and small enterprises)	471.587	295.872	880.980

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	Yes
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	No
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

MANAGEMENT DISCUSSION AND ANALYSIS

STRATEGIC ELECTRONICS (SE) DIVISION

The Strategic Electronics business of the Company (SE) has been active in providing integrated security and surveillance solutions in the defense sector, Government bodies (e.g. Indian Railways) and other Industries. It also provides solutions in the field of meteorology and has prestigious contracts from important organizations like Indian Air Force (AIF) and Indian Meteorology Department (IMD).

During the period, the Company bagged prestigious contracts from two Zonal Railways to provide integrated security and surveillance solutions for 17 railway stations and has also been shortlisted in few more Zonal Railways where it stands a good chance for bagging similar orders. The Company continues to fulfill the needs of the defense sector in providing innovative solutions.

The Company is successfully working with the EPC contractors for addressing the requirements of industries in Oil and Gas, Petrochemicals, Power and Steel sectors. During the year the Company bagged orders from EPC contractors such as Danieli Automation, Invensys Process Systems and BHEL.

To be successful in this business, the company has positioned itself as a system integrator. It has built strong relationships with a large number of OEMs and has built the necessary competencies for integrating the different technologies to create the end to end solutions.

The Company expects the integrated security and surveillance solutions business to grow significantly in the coming years based on the market trend. In order to have a better penetration in the market, the company has increased its sales force and started focusing in the major market segments of Defense and Borders, Mass Transportation, Oil and Gas, Airports, Seaports, Government departments, Manufacturing and Commercial, Realty and Hospitality.

In the area of meteorology the company believes that the market will grow many folds in the coming years due to the growing focus on weather management, disaster management, crop advisory services, etc. The company also feels that it will be able to leverage its early mover advantage in this business and expects to make Meteorology a major line of business in the coming years.

FINANCIAL HIGHLIGHTS

During the period, automation and control system achieved revenue of Rs. 422.503 Millions as against Rs.595.291 Millions in the previous year with an operating loss of Rs. 167.418 Millions as against operating loss of Rs.155.914 Millions in the previous year.

INDUSTRY STRUCTURE AND DEVELOPMENT

The demand for security and surveillance solutions is growing many folds in the country due to need for providing robust security for human lives and physical assets in strategic installations. The growing incidences of terrorist attacks have further increased the threat perception, which in turn has enhanced the need for such technology solutions. The Govt. has also given directives for protecting specific strategic installations in various sectors, which again requires the need for sophisticated security and surveillance solutions. A number of large public sector undertakings in sectors like Oil and Gas, Petrochemicals, etc. have also started building sophisticated security and surveillance systems for protecting their critical installations. The security and surveillance solutions are being embraced by almost all segments at various levels depending on their specific need.

The security and surveillance solutions broadly include Access Control, Surveillance, Screening, Command and Control, Perimeter Security and Intrusion Detection. There are many different technologies available for each of these components offered by many OEMs. With the growing realization that the individual components have limited use unless the end to end system works as a whole and the fact that there are different manufacturers for various components, the users are increasingly preferring System Integrators to provide the integrated security and surveillance solutions.

The global warming and rapid change in weather pattern, the increasing emphasis of the Government on better preparedness for natural disaster, weather becoming a major input for the crop insurance segment, Ministry of Earth Sciences efforts to improve the weather forecasting are some of the major factors influencing the rapid growth of the Meteorology business.

OUTLOOK

The overall market for integrated security and surveillance solutions is growing very fast. There are a large number of projects in the Government sector at various stages. The Indian Railways which had a budget sanction for implementing security and surveillance solutions for phase-1 stations in all the 16 zonal rails, has taken decision for only 3 zonal railways so far. As such there is good scope for 13 more zonal railways to take decisions in the coming 1-2 years and with the initial success in 2 zonal railways, the company is well poised to get a fair share of this business.

There are other large security and surveillance projects in sectors like Oil and Gas, Airforce, Ministry of Defense, Naval Bases and Power Plants where the company is already in active discussion.

There are also large opportunities in build own and operate model like the City surveillance projects coming up, which would yield results in the coming years. The company is gearing up for addressing such requirements.

In the Meteorology business the company sees most of its immediate opportunities in Airports and Meteorology departments. It is already engaged in a large number of opportunities around setting up Air Weather Stations (AWS), Hydrometeorology projects, Tsunami warning projects, etc., which are at various stages. There are other niche areas like disaster management, water resource management and crop advisory solutions, where the company is working and hopes to take early mover advantage. Some of the State Governments have already floated tenders for Disaster Management Solutions and the company has participated in these.

Overall the opportunities are large and provide good scope for growth for the Company in the years to come.

TATANET NETWORK SYSTEMS (TATANET) DIVISION

Tatanet is a leading VSAT service provider in the country catering to a large segment of the market. It has a major presence in the BFSI, Education, Telecom and Oil & Gas sectors due to its innovative solutions. It offers various solutions on the VSAT network which enables internet access, bandwidth on demand, IP multicasting and digital streaming. The company has the satellite earth station at Mahape, Navi Mumbai and the same is augmented continuously to keep it current with the latest technology.

The company has built core competency of designing optimal solutions using the satellite communication infrastructure, which helps it in creating innovative solutions for the end customers.

Over the years, it has used its knowledge of satellite communication technologies and its project management skills to diversify in Satellite Communication projects (Satcom projects), which are turnkey projects involving setting up the complete infrastructure including the earth station and subsequent maintenance of the same. Such projects are normally executed for Government departments, Defense establishments and large Public Sector Undertakings in the Oil and Gas segment.

The Division also started offering Managed Services around Managed Data Center Hosting services, managed network services, Remote Infrastructure Monitoring services, Application Performance Monitoring to add on to its basic services offering of VSAT communication. It could leverage the knowledge acquired in running a large infrastructure including remote management of thousands of VSATs over the years and its customer relations.

Tatanet division is process and quality oriented and has already obtained ISO 20000 and 27001 certifications.

Tatanet is a very well established brand in the Enterprise market and is considered as an important part of the overall IT and Telcom eco-system in the country, known for its high quality of services.

FINANCIAL HIGHLIGHTS

During the period, Tatanet achieved revenue of Rs. 690.276 Millions as against Rs.799.263 Millions in the previous year with an operating profit of Rs. 116.154 Millions as against Rs.132.897 Millions in the previous year.

INDUSTRY STRUCTURE AND DEVELOPMENT

The major driver for VSAT growth in India has been the need for offering reliable connectivity solutions across the country and especially in the remote and rural areas. The major segments which have a need for such connectivity include banking, insurance companies and financial services companies, education, health care industry, oil and gas companies and eGovt. projects like CSC. The VSATs have been able to provide services even to some Telecom companies in the remote locations where it is difficult to have a reliable infrastructure of its own at a reasonable cost.

The VSAT provides near 100% implementation feasibility anywhere in the country, with much higher uptime as compared to terrestrial networks. Looking at the current telecommunication infrastructure in the country and its road map, the VSATs will continue to play a significant role for providing reliable communication services for the Enterprise, Govt. and Defense customers for years to come. The VSAT technology will co-exist with other Wide Area Networking technologies like MPLS VPN over terrestrial networks.

Apart from the ability to cater to the need for reliable connectivity in the remotest corner in the country both on land and sea, the VSAT technology also has some unique advantages, which helps in catering to needs for any multicast application such as synchronous distance learning, digital signage/cinema, etc. Any thin route application is commercially better suited to run over VSAT, and which makes VSATs the preferred connectivity medium for applications such as ATM, broking segment and kiosks. The above will ensure a steady growth for the

VSAT industry in India for the years to come.

There are two satellite frequency bands available for the VSAT industry – Extended C (Ex-C) and Ku band. For critical interactive applications like stock broking and commodity trading, etc. the Ex-C band is preferred as it is immune to impact due to rain. The Ku band has the advantage that the initial investment for setting up the network is low and is therefore preferred for applications like ATMs and e-Governance projects. The Company continues to invest in both the technologies and is therefore able to cater to a wide market.

OUTLOOK

The VSAT market in India is expected to grow in the range of 18% – 20% during 2011-12 as per the internal estimates. The installed base of VSATs in the country was 145,689 as on June 30th, 2011 according to the TRAI data. This throws up ample opportunities for the company to significantly increase its base in the coming years and thereby gain additional market share. The company will continue to focus on BFSI, Energy, Telecom service providers and Education which have been its strength area. Apart from these the company is also looking into the large mid-market segment which is growing at a fast pace now.

Other focus area and growth segment for VSAT will be the internet application and some of the upcoming projects such as internet over VSAT from Universal Service Obligation Funding (USOF), which will offer a growth potential in thousands of villages in the country.

The market is opening up other avenues for growth in the adjacent space for VSAT service providers, as the customers prefer to bring more services under one umbrella contract. The company extended its state-of-the-art Network Operating Center (NOC), which was used for monitoring and managing the VSAT networks, to monitoring the customer’s other devices on its network. There is also a trend evolving in the market for integrating the monitoring of security and surveillance devices on the VSAT network for a number of segments. The company is well poised in providing these solutions due to its extensive play in the integrated security and surveillance solutions domain.

The company is also revamping its Managed Services portfolio to include both IT and Security and Surveillance solutions to create a unique position for itself in the market.

AUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30^TH SEPTEMBER, 2012

(Rs. in Millions)

Particular	3 months period ended 30.09.2012 (Unaudited)	Preceding 3 Months ended 30.06.2012 (Unaudited)	12 Months ended 30.09.2012 (Audited)
Income from Operations
Sales / Income from Operations	292.300	369.600	1421.000
Less : Excise Duty	2.400	14.000	31.900
Net Sales/Income from Operations	289.900	355.600	1389.100
Other Operating Income	1.700	0.000	2.000
Total Income from operations (net)	291.600	355.600	1391.100
Expenses
(a) Cost of material consumed	17.800	88.100	191.800
(b) Purchase of stock- in-trade	95.700	126.000	156.400
(c) Changes in Inventories of finished goods, work-in-progress and stock-in-trade	19.400	(18.700)	(5.000)
(d) Employee benefit expenses	54.200	57.600	218.300
(e) Depreciation and amortization expenses	14.000	13.800	55.800
(f) Provision for foreseeable losses	(1.900)	0.000	1.500
(g) Other Expenses	84.300	81.600	327.000
Total Expenses	283.500	348.400	1345.300
Profit from Operations before Other Income, Finance costs and Exceptional item	8.100	7.200	45.800
Other Income	10.500	0.400	26.400
Profit/ Loss from Ordinary Activities before Finance costs and Exceptional item	18.600	7.600	72.200
Finance costs	25.700	24.300	88.100
Profit/ Loss from Ordinary Activities after Finance costs but Exceptional item	(7.100)	(16.700)	(15.900)
Exceptional item	0.000	26.800	26.800
Profit/ Loss from Ordinary Activities before tax	(7.100)	10.100	10.900
Tax Expenses
- Current Tax	0.000	0.000	0.000
- Deferred Tax Liability/ Assets	0.000	0.000	0.000
- Short/ Excess Provisions for Current Tax of earlier years	0.000	0.000	0.000
Net Profit/ Loss from Ordinary Activities after tax	(7.100)	10.100	10.900
Extraordinary Items	0.000	0.000	0.000
Net Profit for the period	(7.100)	10.100	10.900
Paid- up Equity Share Capital (Face value of the share – Rs. 10)	228.200	228.200	228.200
Reserves excluding revaluation reserves as per balance sheet of Previous Accounting Year	--	--	26.300
Earnings per share (after and before extraordinary items) (of Rs. 10/- each) (not annualized) - Basic	(0.31)	0.44	0.48
- Diluted
Final Dividend - Proposed			0.5
Rate per share in Rs (FY12 - face value Rs 10/- ) (FY 11 - Face value Rs 10/-)			114
PARTICULARS OF SHAREHOLDING
1. Public shareholding
Number of Shares	11385810	11385810	11385810
Percentage of Shareholding	49.90	49.90	49.90
2. Promoters and promoter group shareholding
a) Pledged/Encumbered
- Number of Shares
- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)
- Percentage of Shares (as a % of the Total Share Capital of the Company)
Non - encumbered
- Number of Shares	11432590	11432590	11432590
- Percentage of Shares (as a % of the total shareholding of promoter and promoter group)	100	100	100
- Percentage of Shares (as a % of the total share capital of the company)	50.10	50.10	50.10

	Particulars	3 months period ended 30.09.2012
B	Investor complaints
	Pending at the beginning of the quarter	Nil
	Received during the quarter	Nil
	Disposed of during the quarter	Nil
	Remaining unresolved at the end of the quarter	Nil

AUDITED STANDALONE STATEMENT OF ASSETS AND LIABILITIES

(Rs. in Millions)

Particulars		30.09.2011
A. EQUITY AND LIABILITIES
1. Shareholders Funds
a] Share Capital		228.200
b] Reserves and Surplus		26.300
Sub-total – Shareholders’ funds		254.600
2. Non-current Liabilities
a] Long term Borrowings		12.100
b] Deferred Tax Liabilities		0.000
c] Other long-term liabilities		32.100
d] Long term provisions		57.800
Sub-total - Non-current Liabilities		102.000
3. Current Liabilities
a] Short term Borrowings		800.300
b] Trade Payables		418.200
c] Other Current Liabilities		73.700
d] Short Term Provision		59.100
Sub-total - Current Liabilities		1351.400
TOTAL - EQUITY AND LIABILITIES		1707.900
B ASSETS
1. Non-current assets
a] Fixed assets		239.900
b] Non-current investment		19.800
c] long Term loans and Advances		270.900
Sub-total – Non- current assets		530.600
2. CURRENT ASSETS
	Inventories	209.700
	Trade Receivables	727.400
	Cash & Bank Balances	29.100
	Short Term loans and advances	99.300
	Other Current Assets	111.800
Sub-total – Current Assets		1177.300
TOTAL - ASSETS		1707.900

SEGMENT – WISE REVENUE, RESULTS AND CAPITAL EMPLOYED

(Rs. In Millions)

Particulars	3 months period ended 30.09.2012 (Unaudited)	Preceding 3 Months ended 30.06.2012 (Unaudited)	12 Months ended 30.09.2012 (Audited)
1. Segment Revenue
a. Automation & Control	98.900	179.800	570.000
b. Network Systems	193.400	189.800	851.000
Less : Excise Duty	2.400	14.000	31.900
Total	289.900	355.600	1389.100
Less: Inter – segment revenue	--	--	--
Total income from operations (net)	289.900	355.600	1389.100
2. Segment Results
a. Automation & Control	(6.300)	(16.700)	(30.400)
b. Network Systems	53.900	55.200	215.200
c. Property Development	--	--	--
Total	47.600	38.500	184.800
Less: Finance Costs	23.700	22.400	79.700
Other un-allocable expenditure net off un-allocable other operating income	31.000	6.000	94.200
Total Profit Before Tax	(7.100)	10.100	10.900
3. Capital Employed
(Segment Assets – Segment Liabilities)
a. Automation & Control	451.700	466.900	451.700
b. Network Systems	571.100	563.900	571.100
Total	1022.800	1030.800	1022.800

NOTES:

1. Due to the nature of project business, financial performance is not uniform across the quarters. Hence, financial results for the quarter are not representative of the annual results.

2 In the year ended September 30, 2010 the Company had transferred Traction Electronics, Supervisory Control and Data Acquisition (SCADA) and Industrial Drives businesses (sub-divisions of Automation and Control Segment) to Crompton Greaves Limited ( CGL) as a ""going concern"" on a slump sale basis. However, at the request of CGL, the Company continued with certain operations of the transferred businesses till 30th June 2011.Consequently Sales/Income from Operations, Consumption of Raw Materials, Purchase of Traded Goods and Other Expenditure in respect of these contracts for the year ended 30th September, 2011 have been included under the respective head in the above results"

Particulars	12 Months period ended 30.09.2012	12 Months period ended 30.09.2011
Sales/Income from Operations	--	193.200
Consumption of Raw materials	--	123.400
Purchase of Traded Goods	--	58.400
Other Expenditure	--	9.900

3 The Company entered into a final settlement agreement with CGL considering all claims and differences that CGL had on account of all the associated risks and liabilities of the transferred Businesses under the Original Agreement and the effects of these were given to in the financial statement for the year ended September 30, 2011. Further, during the year the Company has received Rs. 26.800 Millions on account of recovery of the liquidated damages in respect of these businesses.

4 Consequent to the reasons stated in note No 1 and 2 the figures for the current period are not comparable with that of corresponding quarter of previous year.

5 Other expenditure includes gain of Rs.0.163 Million for the quarter ended 30th September, 2012 and loss of Rs.12.976 Millions for the year ended 30th September, 2012 (loss of Rs.6.445 Millions for the quarter ended 30th June, 2012, loss of Rs. 15.100 Millions for the quarter ended 30th September, 2011 and loss of Rs. 14.500 Millions for the twelve months period ended 30th September, 2011) on account of foreign exchange fluctuations in respect of monetary items (viz foreign currency receivables and payables) in accordance with Accounting Standard 11.

6 The Board of Directors has, at its meeting held on November 22, 2012 recommended a dividend of Rs 0.5 per equity share of the face value Rs 10 each aggregating to Rs 11.400 Millions and the corporate tax on such dividend aggregates to Rs. 1.900 Millions, which is subject to approval of shareholders.

7 The tax year for the company being the year ending 31st March, the provision for taxation for the period is the aggregate of the provision made for the six months ended 31st March, 2012 and the provision based on the figures for the remaining six months up to 30th September, 2012. The tax liability for the period 1st April, 2012 to 31st March 2013 shall be determined accordingly.

8 Business Segments have been identified as reportable primary segments in accordance with Accounting Standard 17, taking into account the organisational structure as well as the differing of risks and return of these segments.

9 The figures for the quarter ended September 30, 2012 and September 30, 2011 are the balancing figures between audited figures in respect of the full financial years and the unaudited published year-to-date figures up to June 30, 2012 and June 30, 2011 respectively.

10 Figures for the previous periods are re-classified / re-arranged / re-grouped, wherever necessary, as per the format revised by SEBI in conformity with the amended Schedule VI to the Companies Act, 1956 and in order to make it comparable.

11 The above results were reviewed and recommended by the Audit Committee and were approved by the Board of Directors at its meeting held on 22nd November, 2012.

CONTINGENT LIABILITIES

(Rs. in Millions)

Particulars	30.09.2011	30.09.2010
a) Guarantees issued by the company on behalf of its subsidiary	140.000	110.000
b) Claims against the company not acknowledged as debt comprises of:
i) Excise duty, sales tax and service tax claims disputed by the company relating to issues of applicability and classification	41.629	251.542
ii) Other matters (excluding claims where amounts are not ascertainable)	4.506	4.506

FIXED ASSETS

Ø Land : Lease Hold

Ø Buildings

Ø Plant and Machinery

Ø Electric Installation

Ø Office Equipments, Furniture and Fixtures

Ø Vehicles

Ø Software Expenditure

Ø Technical Know-how Fees

WEBSITE DETAILS:

PROFILE:

Welcome to the new Nelco. Re-invigorated and rebranded the company that started in 1940 as a revolutionary electronics company (with many firsts to its name) has today reinvented itself from the ground up. They have aligned their businesses and set for ourselves new goals.

Nelco is today focused on helping its enterprise and government customers unlock potential by offering solutions in the areas of Integrated Security and Surveillance, VSAT connectivity (Tatanet VSAT), Managed Services, Satcom Projects and Meteorological Solutions. To address the needs of their customers across industry verticals, these solutions are backed by Nelco’s values and proven expertise in consulting, customization, system integration, end-to-end management, as well as robust infrastructure and processes.

They offer a range of innovative and customized solutions for businesses and government institutions under one roof. They are one of India’s leading VSAT providers and offer powerful and dependable network communications solutions. They are also the preferred partners for the Government, Defense and Enterprise sectors when it comes to security and surveillance in India. From keeping the borders safe to checking pilferage and sabotage at factories, their solutions have been deployed everywhere.

They also partner with enterprise and government customers in managing their communication, IT and security and surveillance networks. This frees up the resources of the organizations allowing them to focus on core areas. In addition, they offer end to end networking solutions (Satcom Projects) and maintenance of private hubs and hybrid networks for its customers, from government to corporates. Their innovative turnkey solutions in the meteorological space are meant to meet the entire gamut of requirement of their customers.

Nelco is a part of the US $ 83 Bn TATA Group, the tea to telecom behemoth. But bearing the TATA name comes with immense responsibility, which they are aware of. After all, the group is one of India’s most trusted names. It is therefore only imperative then that their values reflect those that millions have come to expect of any TATA company.

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. 54.47
UK Pound	1	Rs. 87.63
Euro	1	Rs. 71.12

INFORMATION DETAILS

Information Gathered by :	PJA
Report Prepared by :	BVA

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--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	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		50

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.