MIRA INFORM REPORT

Report Date :

27.12.2012

IDENTIFICATION DETAILS

Name :	SOVEREIGN TECH ENGINEERING SERVICES PRIVATE LIMITED
Registered Office :	14, Mahinder Chambers, Waman Tukaram Patil Marg, Chembur, Mumbai -400071, Maharashtra
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	08.04.1986
Com. Reg. No.:	11-039496
Capital Investment / Paid-up Capital :	Rs.9.606 Millions
CIN No.: [Company Identification No.]	U24230MH1986PTC039496
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacturer and Exporter of Coolant Filtration Systems.
No. of Employees :	60 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (44)

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

Maximum Credit Limit :	USD 280000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having a satisfactory track record. Trade relations are reported as decent. Business is active. Payment terms are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions. Note: R.N. Tushar, Senior Manager (Bank of India) has reported that the subject maintains proper and satisfactory banking relation.

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	SE2B
Rating Explanation	High performance capability and moderate financial strength.
Date	16.08.2012

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 PARTED BY

Name :	Ms. Sindhu
Designation :	Account Executive
Contact No.:	91-22-67973259
Date :	26.12.2012

LOCATIONS

Registered Office :	14, Mahinder Chambers, Waman Tukaram Patil Marg, Chembur, Mumbai -400071, Maharashtra, India
Tel. No.:	91-22-67973259/ 260
Fax No.:	91-22-67987499
E-Mail :	ashishshah@sovereigntech.in marketing@sovereigntechindia.com
Website :	www.sovereigntech.in
Area :	2000 Sq. ft
Location :	Owned
Factory 1 :	A-515, TTC Industrial Area, MIDC, Mahape, Navi Mumbai, Maharashtra, India
Tel. No.:	91-22-56147556/ 57
Area :	9000 sq ft
Location :	Owned

DIRECTORS

As on: 28.09.2012

Name :	Mr. Sarvanand Madhukar Bhujle
Designation :	Managing Director
Address :	3^rd Floor, 14, Avanti Co-Operative Housing Society, Deonar Baug, Off S. T. Road, Near Datta Guru Society, Deonar, Mumbai - 400088, Maharashtra, India
Date of Birth/Age :	07.03.1955
Date of Appointment :	28.09.2011
DIN No.:	00302577
Name :	Mr. Aditya Sarvanand Bhujle
Designation :	Director
Address :	14, Avanti Co-Operative Housing Society Limited, Deonar Baug, Deonar, Mumbai – 400088, Maharashtra, India
Date of Birth/Age :	16.03.1988
Date of Appointment :	17.03.2006
DIN No.:	00302636
Name :	Mr. Vimal Madhukar Bhujle
Designation :	Director
Address :	Usha Co-Operative Housing Society Limited, Opposite Portuguese Church, College Lane, Dadar (West), Mumbai - 400028, Maharashtra, India
Date of Birth/Age :	13.12.1923
Date of Appointment :	08.04.1986
DIN No.:	00575115
Name :	Mr. Anish Sarvanand Bhujle
Designation :	Director
Address :	14, Avanti Co-Operative Housing Society Limited, Deonar Baug, Mumbai – 400088, Maharashtra India
Date of Birth/Age :	13.10.1994
Date of Appointment :	15.12.2012
DIN No.:	06450263

KEY EXECUTIVES

Name :	Ms. Sindhu
Designation :	Account Executive

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 28.09.2012

Names of Shareholders	No. of Equity Shares
Vimal Madhukar Bhujle	191700
Sarvanand Madhukar Bhujle	768295
Aditya Sarvanand Bhujhe	5
Total	960000

Names of Shareholders	No. of Preference Shares
Vanita Sharma	1
Sarvanand Madhukar Bhujle	4
Sindhu Sasi	1
Total	6

Equity Share Break up (Percentage of Total Equity)

As on: 28.09.2012

Category	Percentage
Directors or relatives of directors	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Coolant Filtration Systems.

Products :

Products Description	Items Code No.
Filter Systems	84211999
Filter Paper	48232000
Lubricants	34029099

Exports :

Products :

· Coolant Filtration Systems

Countries :

· Germany

· Sri Lanka

Imports :

Products :

· Raw Material

Countries :

· Germany

· US

PRODUCTION STATUS (AS ON 31.03.2012)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Filter Media	Sq. Mtr.	NA	NA	267710
KBF	No.	NA	NA	198
Chip Blaster and Sovereign Kambo	No.	NA	NA	17
Chip Conveyors	No.	NA	NA	69
Lubricants	Kg	NA	NA	13088

Note:

Installed Capacity: The installed capacities are not precisely ascertainable, given the nature of operation, changes in product mix and utilisation of manufacturing facilities and hence, have not been disclosed.

GENERAL INFORMATION

Customers :

End Users

No. of Employees :

60 (Approximately)

Bankers :

Bank of India, 61-A, Gokhale Road (North), Dadar (West), Mumbai - 400028, Maharashtra, India

Tel. No.: 91-22-24221895

E-mail: hooper@bankofindia.co.in

Micr Code: 400013019

IFSC Code: BKID0000015

Website: http://.www.bankofindia.com

· HDFC Bank Limited

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2012	As on 31.03.2011
Term Loan – Guest House	8.655
Term Loan – Mahape New Factory	10.743
Vehicle Loan from Bank of India (Maruti Alto)	0.061
Term Loan from Chola Mandalam	1.440
Loan repayable on demand from Bank	35.689
Total	56.588	58.315
Unsecured Loan	As on 31.03.2012	As on 31.03.2011
Vimal M Bhujle	4.250
Sarvanand M Bhujle	7.547
Aditya S Bhujhe	2.255
Total	14.052	10.385

Banking Relations :	--
Auditors :
Name :	Gokhale and Sathe Chartered Accountants
Address :	302/303, Udyog Mandir No. 1 7-C Bhagoji Keer Marg, Mahim, Mumbai – 400016, Maharashtra, India
Tel No.:	91-22-43484242
Fax No.:	91-22-43484241/ 51
Email :	office@gokhalesathe.in
PAN No.:	AAAFG4990K

CAPITAL STRUCTURE

As on: 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
995000	Equity Shares	Rs. 10/- each	Rs. 9.950 Millions
50	8% Non Cumulative Redeemable Preference Share	Rs. 1000/-each	Rs. 0.050 Million
	Total		Rs.10.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
960000	Equity Shares	Rs. 10/- each	Rs. 9.600 Millions
6	8% Non Cumulative Redeemable Preference Share	Rs. 1000/-each	Rs. 0.006 Million
	Total		Rs.9.606 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		9.606	9.606	9.606
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		61.120	51.012	40.295
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		70.726	60.618	49.901
LOAN FUNDS
1] Secured Loans		56.588	58.315	57.957
2] Unsecured Loans		14.052	10.385	9.260
TOTAL BORROWING		70.640	68.700	67.217
DEFERRED TAX LIABILITIES		0.000	0.000	0.011
TOTAL		141.366	129.318	117.129
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		82.179	73.003	73.583
Capital work-in-progress		21.343	25.663	11.768
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		2.668	1.976	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	29.192	22.049	17.047
	Sundry Debtors	43.625	42.036	21.849
	Cash & Bank Balances	6.580	4.510	8.624
	Other Current Assets	0.000	0.091	0.072
	Loans & Advances	5.408	5.466	4.896
Total Current Assets		84.805	74.152	52.488
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	21.027	34.835	18.043
	Other Current Liabilities	23.636	1.727	1.543
	Provisions	4.966	8.914	1.124
Total Current Liabilities		49.629	45.476	20.710
Net Current Assets		35.176	28.676	31.778
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		141.366	129.318	117.129

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	150.000 (Approximately)
		Other Income	NA
		TOTAL (A)	NA	130.666	81.179
Less	EXPENSES
		Office Expenses
		Administrative Expenses
		Advertising Expenses
		TOTAL (B)	NA	97.206	62.099
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		33.890	33.460	19.080
Less	FINANCIAL EXPENSES (D)		9.470	8.380	7.710
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		24.420	25.080	11.370
Less/ Add	DEPRECIATION/ AMORTISATION (F)		6.750	6.180	6.110
	PROFIT BEFORE TAX (E-F) (G)		17.680	18.900	5.260
Less	TAX (H)		7.570	6.510	2.210
	PROFIT AFTER TAX (G-H) (I)		10.110	12.390	3.050
Add	PRIOR YEAR INCOME		0.000	0.000	0.210
Less	PRIOR YEAR TAX ADJUSTMENT		0.000	0.000	0.050
Less	PROPOSED DIVIDEND AND TAX		0.000	1.680	1.120
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		29.710	20.500	18.410
Less	APPROPRIATIONS
		Transfer to General Reserve	0.000	1.500	0.000
	BALANCE CARRIED TO THE B/S		39.820	29.710	20.500
	EARNINGS IN FOREIGN CURRENCY		4.262	4.510	2.140
	IMPORTS VALUE		30.539	24.970	13.698
	Earnings Per Share (Rs.)		11.69	12.91	3.18

Expected Sales (2012-2013): Rs.200.000 Millions

The above information has been parted by Ms. Sindhu

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	NA	9.48	3.76
Return on Total Assets (PBT/Total Assets}	(%)	11.37	12.84	4.17
Return on Investment (ROI) (PBT/Networth)		0.25	0.31	0.11
Debt Equity Ratio (Total Liability/Networth)		1.70	1.88	0.44
Current Ratio (Current Asset/Current Liability)		1.71	1.63	2.43

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS:

(Rs. in Millions)

Particulars	31.03.2012	31.03.2011	31.03.2010
Sundry Creditors
Creditors due micro and small enterprises	0.000
Due to Others
For Goods and Services	14.297
For Expenses	6.730
Total	21.027	34.835	18.043

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	Yes
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	Yes
10]	Designation of contact person	Yes
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	Yes
15]	Capital in the business	Yes
16]	Details of sister concerns	No
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	Yes
20]	Export / Import details (if applicable)	Yes
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	Yes
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

PERFORMANCE OF THE COMPANY:

During the current year, the Company has accomplished highest sales ever of MINR 153.32 despite the marginally adverse market condition in the second half of the financial year. As a matter of fact, the sales growth for the first half of the financial year was +90% which was indeed encouraging. If the same trend was to continue then the sales performance would have been even better.

The Major contributing products during the year were Sovereign Kompact Band filter and Rhenus High Performance Coolant.

This was the first year that we introduced Chip Conveyors manufactured in Technical Collaboration with Jorgensen Inc USA, Total Sales of Chip Conveyors was at MINR 16.40. Introduction of Chip Conveyor has widened the Product Mix for the Company.

FORM 8:

Corporate identity number of the company	U24230MH1986PTC039496
Name of the company	SOVEREIGN TECH ENGINEERING SERVICES PRIVATE LIMITED
Address of the registered office or of the principal place of business in India of the company	14 Mahinder Chamberswaman Tukaram Patel Marg, Chembur, Mumbai – 400071, Maharashtra, India E-mail: marketing@sovereigntechindia.com
This form is for	Creation of charge
Type of charge	· Immovable Property · Any Interest in Immovable Property
Particular of charge holder	Bank of India, 61 - A, Gokhale Road North, Dadar West, Mumbai – 400028, Maharashtra, India E-mail: dadarw.mumbaisouth@bankofindia.co.in
Nature of instrument creating charge	Oral Assent in Respect of the Equitable Mortgage
Date of instrument Creating the charge	17.08.2011
Amount secured by the charge	Rs.31.400 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest: 3.75% over base rate (OBR) + 1% Tenor premium presently 15.50% p.a. with monthly rests. Terms of Repayment: 77 monthly installments thus: Feb. 2011 to Jan 2013 - 24 installments of Rs.0.150 Million, Feb. 2013 to Mar 2014 - 14 installments of Rs. 0.400 Million, April 2014 to Mar. 2016 - 24 installments of Rs.0.500 Million, April 2016 to December 16 - 9 installments of Rs.0.600 Million, Jan. 2017 to Jun. 2017 06 installments of Rs.0.800 Million i.e. in Rs Millions: 3.600 + 5.600 + 12.000 + 5.400 + 4.800 = Rs.31.400 Millions. Margin : 20% Extent and Operation of the charge : Charge of Equitable Mortgage by deposit of title deeds of immovable Property described in column no. 15 to secure Term Loan of Rs.31.400 Millions plus interests, costs, charges expenses etc. as principal security.
Short particulars of the property charged	Immovable properties at Plot No. A-515/1 TTC Industrial Area, MIDC, Mahape, Navi Mumbai with leasehold tenure and comprising land and buildings, other structures, fixtures and fittings, erected or to be erected or installed there on.

FIXED ASSETS:

· Leasehold Land

· Factory Building

· Guest House

· Machinery

· Electrical Fitting

· Tools and Equipments

· Office Equipments

· Air Conditioner

· Furniture and Fixtures

· Computers

· Motor Car

· Bicycle

· Computer Software

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.54.96
UK Pound	1	Rs.88.68
Euro	1	Rs.72.45

INFORMATION DETAILS

Information Gathered by :	SVA
Report Prepared by :	VRN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		44

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.