MIRA INFORM REPORT

Report Date :

21.12.2012

IDENTIFICATION DETAILS

Name :	HEAVY ENGINEERING CORPORATION LIMITED
Registered Office :	H.E.C. Administrative Building, Plant Plaza Road, Ranchi – 834004, Jharkhand, India
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	13.12.1958
Com. Reg. No.:	03-000630
Capital Investment / Paid-up Capital :	Rs. 6060.788 Millions
CIN No.: [Company Identification No.]	U27100JH1958GOI000630
TAN No.: [Tax Deduction & Collection Account No.]	RCHH00033F
PAN No.: [Permanent Account No.]	AAACH4534P
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer of Equipment and Machinery for Iron and Steel Industry.
No. of Employees :	3737 [Approximately]

RATING & COMMENTS

MIRA’s Rating :

B (36)

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

Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is a Union Government Company. It is an established company having a moderate track record. There appear huge accumulated losses recorded by the company. However, trade relations are reported to be fair. Business is active. Payments are reported to be slow but correct. 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 – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

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

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

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.

LOCATIONS

Registered Office :	H.E.C. Administrative Building, Plant Plaza Road, Ranchi – 834004, Jharkhand, India
Tel. No.:	91-651-2401571
Fax No.:	91-651-2401249
E-Mail :	sect@hecltd.com corpmktg@hecltd.com
Website :	http://www.hecltd.com
Branch Office :	E-84, Masjid Moth, Residential Scheme, Greater Kailash – III, New Delhi-110048, India
Tel. No.:	91-11-29220224
Fax No.:	91-11-29220225
E-Mail :	hecdelhi@hecltd.com
Branch Office :	77, Park Street, Kolkata-700016, India
Tel. No.:	91-33-22172397
Fax No.:	91-33-22291509
E-Mail :	heckolkata@hecltd.com

DIRECTORS

As on 30.09.2011

Name :

Mr. Ramaballava Misra

Designation :

Director

Address :

F/12, Sector III, Dhurwa, Ranchi – 834004, Jharkhand, India

Date of Birth/Age :

15.12.1954

Date of Appointment :

31.05.2012

Qualification :

CA,CS,CWA

DIN :

01223196

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U40101UR2001SGC025866	UJVN Limited	Whole-time director	21/11/2005	21/11/2005	15/05/2008	Active	NO
2	U27100JH1958GOI000630	HEAVY ENGINEERING CORPORATION LIMITED	Managing director	31/05/2012	16/05/2008	-	Active	NO

Name :

Mr. Harbhajan Singh

Designation :

Nominee director

Address :

6, Lokmanya Tilak Marg, Dalibagh, Lucknow, Uttar Pradesh, India

Date of Birth/Age :

23.11.1955

Date of Appointment :

12.01.2010

DIN :

02922092

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U74899DL1970PLC005301	HINDUSTAN PAPER CORPORATION LIMITED	Nominee director	06/01/2010	06/01/2010	04/05/2012	Active	NO
2	U74899DL1965PLC004322	CEMENT CORPORATION OF INDIA LIMITED	Nominee director	07/01/2010	07/01/2010	-	Active	NO
3	L63090WB1919GOI003229	ANDREW YULE & CO LTD	Nominee director	08/01/2010	08/01/2010	-	Active	NO
4	U27109DL1970GOI117585	ENGINEERING PROJECTS (INDIA) LIMITED	Nominee director	08/01/2010	08/01/2010	17/08/2011	Active	NO
5	L29230KA1953PLC000748	H.M.T. LIMITED	Director appointed in casual vacancy	11/01/2010	11/01/2010	-	Active	NO
6	U33309KA1974PLC002707	H.M.T. (INTERNATIONAL) LIMITED	Director	27/08/2010	11/01/2010	-	Active	NO
7	U02922KA1999GOI025572	HMT MACHINE TOOLS LIMITED	Director	07/09/2010	11/01/2010	24/09/2012	Active	NO
8	U27100JH1958GOI000630	HEAVY ENGINEERING CORPORATION LIMITED	Nominee director	12/01/2010	12/01/2010	-	Active	NO
9	U40102DL2008PTC177307	NTPC BHEL POWER PROJECTS PRIVATE LIMITED	Nominee director	27/09/2010	28/04/2010	-	Active	NO
10	L25111UP1972GOI003599	SCOOTERS INDIA LIMITED	Nominee director	13/09/2011	13/09/2011	-	Active	NO
11	L23209WB1921PLC004357	TIDE WATER OIL CO INDIA LTD	Director	31/10/2012	31/10/2012	-	Active	NO

Name :

Mr. Kushal Saha

Designation :

Whole-time director

Address :

HIG (L) – 4/8, Birti Abasan M B RD, Nimta, Kolkata-700049, West Bengal, India

Date of Birth/Age :

14.11.1959

Date of Appointment :

20.06.2011

DIN No.:

03578228

KEY EXECUTIVES

Name :	Mr. Abhay Kumar Kanth
Designation :	Secretary
Address :	Near Tiny Tots (N) School, North Office Para, Doranda, Ranchi – 834002, Jharkhand, India
Date of Birth/Age :	05.06.1972
Date of Appointment :	17.11.2005
DIN :	AKUPK6534F

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2011

Names of Shareholders	No. of Shares
President of India	6060785
Gopikumar Pillai	1
P. DEB, Under Secretary To The Government of India	1
Harbhajan Singh, Joint Secretary, DHI, GOI	1
Total	6060788

Equity Share Break up (Percentage of Total Equity)

As on 30.09.2011

Category	Percentage
Government [Central and States]	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Equipment and Machinery for Iron and Steel Industry.

Products :

Item Code No.	Product Description
8426	Metallurgical Machinery and Equipment

PRODUCTION STATUS AS ON 31.03.2012

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Goods Manufactured :-
Foundry Forge Plant.	M.T.	33345	33345	1644
Grey Iron Castings	M.T.	40182	40182	4340
Steel Castings	M.T.	41463	41463	2052
Forging and Forged Rolls	M.T.	700	700	65
Non Ferrous Castings	M.T.	1110	1110	82
G.I. Moulds	M.T.	40000	40000	2933
Steel Ingots, Core and Synthetic Iron	M.T.	17740	17740	0
Rolls (G.I. and Steel)	M.T.	0	0	2434
Bye- Product-Coal Tar	M.T.	174540	174540	13550
Heavy MachineBuilding Plant	M.T.	80000	80000	9055
Metallurgical Machinery and Equipment Structurals	M.T.	25000	25000	0

GENERAL INFORMATION

No. of Employees :

3737 [Approximately]

Bankers :

State Bank of India, Commercial Branch Ranchi, Mecon Campus, P.O. Doranda, Ranchi - 834002, Jharkhand, India

Facilities :

Secured Loan	31.03.2011 (Rs. in Millions)	31.03.2010 (Rs. in Millions)
Working capital loans banks secured	896.567	1120.655
Total	896.567	1120.655

Banking Relations :
Auditors :
Name :	Anjali Jian and Associates Chartered Accountant
Address :	Jain Villa, Guru Nanak School, P P Compound, Ranchi – 834001, Jharkhand, India
Tel. No.:	91-651-2331044
Mobile No.:	91-9334701107
Fax No.:	91-651-2331844
PAN No.:	AAEFA9889R

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs.1000/-each	Rs.10000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
6060788	Equity Shares	Rs.1000/-each	Rs.6060.788 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

Particulars		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		6060.788	6060.788	4532.335
2] Share Application Money		0.001	0.001	1528.454
3] Reserves & Surplus		1229.511	1274.658	2111.827
4] (Accumulated Losses)		[9031.965]	[9413.363]	[10646.136]
NETWORTH		[1741.665]	[2077.916]	[2473.520]
LOAN FUNDS
1] Secured Loans		896.567	1120.655	5.483
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		896.567	1120.655	5.483
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		[845.098]	[957.261]	[2468.037]
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		570.036	582.390	608.635
Capital work-in-progress		253.737	249.477	215.161
INVESTMENT		0.036	0.036	0.036
DEFERREX TAX ASSETS			0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2345.537	1593.078	1230.562
	Sundry Debtors	5026.667	3349.714	2046.021
	Cash & Bank Balances	244.786	1769.872	553.123
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	291.450	212.326	151.236
Total Current Assets		7908.440	6924.990	3980.942
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1217.162	974.692	595.506
	Other Current Liabilities	6638.068	6245.688	5658.212
	Provisions	1752.672	1533.018	1065.522
Total Current Liabilities		9607.902	8753.398	7319.240
Net Current Assets		[1699.462]	[1828.408]	[3338.298]
MISCELLANEOUS EXPENSES		30.555	39.244	46.429
TOTAL		[845.098]	[957.261]	[2468.307]

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	6408.995	4965.603	4173.874
		Other Income	376.869	440.394	129.340
		TOTAL (A)	6785.864	5405.997	4303.214
Less	EXPENSES
		Consumption materials changes inventories	3125.116	1909.345	3866.998
		Manufacturing service costs	1178.352	1087.320
		Employee related expenses	1512.551	1492.600
		Administrative selling other expenses	543.643	572.809
		Research development expenditure	0.204	0.085
		TOTAL (B)	6359.866	5062.159	3866.998
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		425.998	343.838	436.216
Less	FINANCIAL EXPENSES (D)		9.237	4.719	204.111
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		416.761	339.119	232.105
Less/ Add	DEPRECIATION/ AMORTISATION (F)		40.597	38.078	36.318
	Prior period items before tax		5.234	141.660	[8.482]
	PROFIT BEFORE TAX (E-F) (G)		381.398	442.701	187.305
Less	TAX (H)		0.000	0.000	3.597
	PROFIT AFTER TAX (G-H) (I)		381.398	442.701	183.708
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		NA	NA	[10829.844]
	BALANCE CARRIED TO THE B/S		NA	NA	[10646.136]
	IMPORTS
		Raw Materials, Spare Parts, Components	485.485	37.039	NA
		Capital Goods	0.996	22.521	NA
	TOTAL IMPORTS		486.481	59.560	NA
	Earnings Per Share (Rs.)		62.93	73.04	40.53

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	5.62	8.19	4.35
Net Profit Margin (PBT/Sales)	(%)	5.95	8.92	4.49
Return on Total Assets (PBT/Total Assets}	(%)	4.50	5.90	4.08
Return on Investment (ROI) (PBT/Networth)		[0.22]	[0.21]	[0.07]
Debt Equity Ratio (Total Liability/Networth)		[6.03]	[4.75]	[2.96]
Current Ratio (Current Asset/Current Liability)		0.82	0.79	0.54

LOCAL AGENCY FURTHER INFORMATION

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	No
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	No

PERFORMANCE HIGHLIGHTS

The company has shown a sustained growth in all the areas in the concluded financial year. The gross turnover has gone up by 29% over that of the last financial year. The gross turnover during the year has been Rs.681.21 crore against Rs.5285.300 millions during the previous year. Production during the year has increased by 30% to Rs.7005.500 millions from Rs. 5377.200 millions during previous year.

CONTINGENT LIABILITIES:

a) Estimated amount of contracts, remaining to be executed on capital account and not provided for is Rs.1.685 Millions (Previous year Rs.1.934 Millions).

b) Unexpired Letter of Credit Rs.252.206 Millions (Previous year Rs.121.684 Millions)

c) Unexpired Bank Guarantee Rs.1127.894 Millions (Previous year Rs.1111.464 Millions)

d) Delayed payment surcharge on Energy charges Rs.6959.283 Millions (Previous Year Rs.6959.283 Millions)

e) Water Charges Rs.145.136 Millions (Previous year Rs.121.386 Millions)

f) Damages towards PF duesRs.950.154 Millions (Previous year Rs.950.154 Millions)

g) Others including Legal Cases Rs.110.582 Millions and Commercial Taxes Rs.272.390 Millions, total amounting to Rs.382.972 Millions (Previous year Rs. 382.021 Millions)

FIXED ASSETS :

• Land
• Building
• Plant and Machinery
• Furniture and Fixtures
• Electrical Installations
• Roads and Bridges
• Railway Lines and sidings
• Water Works and Sewerage
• Vehicles and Locomotives
• Construction and Other Equipment

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.54.84
UK Pound	1	Rs.89.11
Euro	1	Rs.72.47

INFORMATION DETAILS

Report Prepared by :

MRI

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	4
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	4
--CREDIT LINES	1~10	4
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		36

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.