MIRA INFORM REPORT

Report Date :

11.07.2012

IDENTIFICATION DETAILS

Name :	ESSAR ENGINEERING SERVICES LIMITED (w.e.f. 07.01.2008)
Formerly Known as:	AEGIS ESO SERVICES LIMITED
Registered Office :	Essar House, 11, K K Marg, Mahalxmi, Mumbai-400034, Maharashtra
Country :	India
Financials (as on) :	31.03.2009
Date of Incorporation :	12.07.2007
Com. Reg. No.:	11-172280
Capital Investment / Paid-up Capital :	Rs. 0.500 Million
CIN No.: [Company Identification No.]	U74200MH2007PLC172280
TAN No.: [Tax Deduction & Collection Account No.]	MUMA31189E
PAN No.: [Permanent Account No.]	AAGCA4675A
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Subject offers detailed design and construction management services for up gradation, expansion and/or grass root based projects for Oil and Gas, Petrochemicals, Power and Steel.
No. of Employees:	Not divulged by the management.

RATING & COMMENTS

MIRA’s Rating :

Ca (12)

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate
Payment Behaviour :	Unknown
Litigation :	Clear
Comments :	Subject is a subsidiary of Aegis Limited. It is an established company having moderate track. The management of the company has failed to tile its financials with the government departments after 2009. The management has denied to disclose any details of the subject. Payments terms are not known. Initially, the company can be considered for business dealings only on a safe and secured 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.

INFORMATION DECLINED BY

Name :	Mr. Richard Sandana
Designation :	Accounts Manager
Contact No.:	91-22-61215100
Date :	10.07.2012

LOCATIONS

Registered Office :	Essar House, 11, K K Marg, Mahalxmi, Mumbai-400034, Maharashtra, India
Tel. No.:	91-22-66601100
Fax No.:	91-22-23544490
E-Mail :	ydipti@essar.com jains@essar.com
Website :	http://www.eesl.essar.com
Branch office :	27^th KM, Surat-Hazira Road, Santhisthi Building, Hazira, Taluka Choryasi, Surat-394270, Gujarat, India
Tel. No.:	91-261-6682400
Fax No.:	91-261-6682796
Branches :	Also Located at: · Mumbai · Hazira · Bangalore · Kolkata · Chennai

DIRECTORS

AS ON 30.09.2009

Name :	Mr. Aparup Sengupta
Designation :	Director
Address :	104/105, 2B Garden Enclave, Piorkhan Road No. 2, Thane (West), Mumbai-400601, Maharashtra, India
Date of Birth/Age :	20.08.1964
Date of Appointment :	12.07.2007
Name :	Mr. Vishnoo Narayan Paradkar
Designation :	Additional Director
Address :	Pankar Khan Abdul Gafar Khan Road, Worli Sea Face, Mumbai-400025, Maharashtra, India
Date of Birth/Age :	06.10.1948
Date of Appointment :	21.12.2007
Name :	Mr. Nandakumar Venkataraman
Designation :	Director
Address :	D 3/8, Nanda Niketan Essar Township, Opposite Power Gate, Hazira, Surat-394270, Gujarat, India
Date of Birth/Age :	06.05.1949
Date of Appointment :	21.12.2007
Name :	Mr. Sandip Sen
Designation :	Director
Address :	701, Bhima Worli Sagar, CHS Sir Pochkhanwala Road, Worli, Mumbai – 400018, Mumbai – 400018, Maharashtra, India
Date of Birth/Age :	04.10.1966
Date of Appointment :	29.04.2009

KEY EXECUTIVES

Name :	Mr. Richard Sandana
Designation :	Accounts Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2009

Names of Shareholders	No. of Shares
Aegis BPO Limited, Mumbai	1749940
Aegis BPO Services Limited Jointly with Mr. Girish Sathe	10
Aegis BPO Services Limited Jointly with Mr. S Shankarnarayanan	10
Aegis BPO Services Limited jointly with Mr. Madan Mundra	10
Aegis BPO Services Limited jointly with Mr. R Vijay	10
Aegis BPO Services Limited jointly with Ms. Harshada Pathak	10
Aegis BPO Services Limited jointly with Mr. Atul Bhagwat	10
Total	1750000

Equity Share Breakup (Percentage of Total Equity)

AS ON 30.09.2009

Category	Percentage of Holding
Bodies corporate (not mentioned above)	100.00

BUSINESS DETAILS

Line of Business :

Subject offers detailed design and construction management services for up gradation, expansion and/or grass root based projects for Oil and Gas, Petrochemicals, Power and Steel.

Products :

Product Description	ITC code
Engineering Services	8711

GENERAL INFORMATION

No of Employees :

Not divulged by the management.

Bankers :

· Axis Bank Limited, Esquire Centre, , No.9, M G Road, Bangalore-560001, Karnataka, India

Facilities :

Unsecured Loans	31.03.2009 Rs. In Millions	31.03.2008 Rs. In Millions
Short term loan from others [Payable in one year Rs. Nil (Previous year Rs. 12.036 millions)]	0.000	12.036
Total	0.000	12.036

Banking Relations :	--
Auditors :
Name :	S R Batliboi and Company Chartered Accountant
Address :	Gold blue corporate tower B, Sector -42, Sector Road, Gurgaon – 122002, Haryana, India
Tel No.:	91-22-40356300
Fax No.:	91-22-40356400
Holding company :	Aegis Limited U99999MH1992PLC04767 [ Essar Infrastructure Holdings Mauritius (Holding of Aegis BPO Services Limited) Pacific Trade International Limited, Mauritius (Holding company of Essar Infrastructure Holding Limited)]
Associates/Subsidiaries :	· Essar Oil Limited · Essar Oil Vadinar Limited · Vadinar Oil Terminal Limited · Essar Power Gujarat Limited · Essar Power MP Limited · Vadinar Power Co Limited · Essar Bulk Terminal Salaya Limited · Essar Bulk Terminal Limited · Essar Steel Limited · Essar SEZ Hazira Limited · Hazira Plate Limited · Essar Steel Limited · Essar Steel Orissa Limited · Essar Project Management Consultants Limited · Hazira Pipe Milt Limited · Essar Steel Hazira Limited · Essar Steel Minnesota Limited · Essar Offshore Subsea Limited · Essar Steel Holdings Limited · Essar Heavy Engineering Services Limited · Algoma Steel Industries Limited · Asia Motor Works Limited · Essar Vietnam Steel Corporation Limited · Essar Constructions (India) Limited · Essar Oilfield Services Limited · Futura Travels Limited · Essar Information Technologies Limited · Essar Investment Limited · Essar House Services Limited

CAPITAL STRUCTURE

AS ON 31.03.2009

Authorised Capital :

No. of Shares	Type	Value	Amount
5000000	Equity Shares	Rs. 10/- each	Rs. 50.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value		Amount
1750000	Equity Shares (Entire share Capital is held by Aegis BPO Services Limited the holding company along with its nominees)	Rs. 10/- each	Rs.17.500 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		17.500	0.500
2] Share Application Money		0.000	17.000
3] Reserves & Surplus		545.220	79.181
4] (Accumulated Losses)		0.000	0.000
NETWORTH		562.720	96.681
LOAN FUNDS
1] Secured Loans		0.000	0.000
2] Unsecured Loans		0.000	12.036
TOTAL BORROWING		0.000	12.036
DEFERRED TAX LIABILITIES		0.000	0.000
TOTAL		562.720	108.717
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		87.979	0.065
Capital work-in-progress		0.000	0.000
INVESTMENT		0.000	0.000
DEFERREX TAX ASSETS		5.169	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	0.000	0.000
	Sundry Debtors	1203.716	846.412
	Cash & Bank Balances	253.333	50.823
	Other Current Assets	0.000	0.000
	Loans & Advances	481.478	104.755
Total Current Assets		1938.527	1001.990
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	704.399	326.802
	Other Current Liabilities	717.265	559.804
	Provisions	47.291	6.732
Total Current Liabilities		1468.955	893.338
Net Current Assets		469.572	108.652
MISCELLANEOUS EXPENSES		0.000	0.000
TOTAL		562.720	108.717

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2009	31.03.2008
	SALES
		Income from Services	3079.459	689.683
		Other Income	38.098	0.000
		TOTAL (A)	3117.557	689.683
Less	EXPENSES
		Direct Expenses	1381.686	385.399
		Personal Cost	636.504	131.491
		Operating and Other Expenses	311.134	50.711
		TOTAL (B)	2329.324	567.601
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		788.233	122.082
Less	FINANCIAL EXPENSES (D)		18.435	0.015
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		769.798	122.067
Less/ Add	DEPRECIATION/ AMORTISATION (F)		49.706	0.002
	PROFIT BEFORE TAX (E-F) (G)		720.092	122.065
Less	TAX (I)		254.052	42.885
	PROFIT AFTER TAX (G-I) (J)		466.040	79.180
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		79.180	0.000
	BALANCE CARRIED TO THE B/S		545.220	79.180
	Earnings Per Share (Rs.)		439.38	1583.61

KEY RATIOS

PARTICULARS		31.03.2009	31.03.2008
PAT / Total Income	(%)	14.95	11.48
Net Profit Margin (PBT/Sales)	(%)	23.38	17.70
Return on Total Assets (PBT/Total Assets}	(%)	35.53	12.18
Return on Investment (ROI) (PBT/Networth)		1.28	1.26
Debt Equity Ratio (Total Liability/Networth)		2.61	9.36
Current Ratio (Current Asset/Current Liability)		1.32	1.12

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS

(Rs. in millions)

Particular	31.03.2009	31.03.2008
Sundry Creditors
- Total outstanding dues to Micro and Small enterprises	0.000	0.000
- Total outstanding dues other than Micro and Small enterprises	704.399	326.802
Total	704.399	326.802

Nature of Operations:

Subject offers detailed design and construction management services for up gradation, expansion and/or grassroots based projects for Oil and Gas, Petrochemicals, Power and Steel sectors. Based on a systematic approach towards comprehensive engineering, Essar Engineering uses the best systems and practices which are ISO 9001:2000 certified.

Operations

During the period, the Company entered its second year of operations of providing high end back office engineering services to all the in-house projects of Essar Group of companies in the field of steel, power, hydrocarbon etc. The revenue has increased many folds due to new projects with Essar Steel (Orissa) Limited, Hazira Pipe Mill Limited, Hazira Plate Limited, De-bottlenecking services for Essar Steel Limited, Essar Steel Minnesota LLC, Essar Steel Algoma Inc. etc

The major hallmark of 2008-09 performance is the contract for engineering services from M/s. VALE (CVRD) for the Oman Project. Due to the high man-hour rate contracted for this project there has been substantial productivity improvement as well as earning for this contract. This can be considered as one of the main pillars for increased turnover as well as good profit for the company. In the power domain, the company signed two contracts with Essar Power Mahan project and Essar Power (Gujarat) Limited for carrying out engineering services for the Plants.

During the period the Company has achieved gross revenue of Rs 3420.000 Millions as against gross revenues of Rs.720.000 Millions and net profit of Rs.720.000 Millions as against 120.000 Millions as compare to last period.

Management's Discussion and Analysis

Engineering services represent one of the largest sections of the industrial world, with an estimated 750 billion $ worth of value addition per year. These services comprise a vast swathe of design and support services essential for the functioning of practically every industry, spread across the entire spectrum of engineering.

Jack Welch's 70:70:70 rule states that 70% of a company's business must be outsourced. Of this 70% must be off shore and further 70% of this must be off shored to India. Apart from the oft quoted labor arbitrage, India holds a significant advantage as compared to its peers. The abundant pool of engineers, cost driven manufacturing and designing capabilities, Government, focus on the outsourcing sector are some of the factors that make India an extremely attractive EPO destination.

India currently boasts of proven capabilities in the cradle-to-grave EPO lifecycle, running through the consecutive phases of Ideation, Design, Testing, Manufacturing, Production and Service. Standards play a large role in engineering work as much of engineering results in the design of products. Standards serve to facilitate the reproduction and ensure compatibility between products. Over the past years, the India EPO industry has come to enjoy significant standardization as well as economies of scale and scope.

The Union Minister of Commerce and Industry, Mr Kamal Nam, sard that India had the potential to attract 25 per cent of the $70 billion global engineering process outsourcing industry. He added that India is poised to become the hub of Engineering Process Outsourcing (EPO) with the size of the Indian EPO market expected to touch US $ 30 billion annually by year 2015. This is validated by the fact that the estimated demand for engineering process outsourcing to India has grown at over 30% to 35% in the last few years.

One area for concern however could be that exports, including, engineering exports from developing countries are likely to face increased non-tariff barriers, considering that average tariffs for industrial products in all countries is headed southwards. This process has already begun for engineering products and is likely to gain greater momentum as India's share in world exports increases in the coming years.

Bankers Charges Report as per Registry

Corporate identity number of the company	U74200MH2007PLC172280
Name of the company	ESSAR ENGINEERING SERVICES LIMITED
Address of the registered office or of the principal place of business in India of the company	Essar House, 11, K K Marg, Mahalxmi, Mumbai-400034, Maharashtra, India
This form is for	Creation of charge
Type of charge	Book Debts Movable Property Floating Charge
Particular of charge holder	AXIS BANK LIMITED
Nature of instrument creating charge	Deed of Hypothecation of Current Assets (Stock and Book debts)
Date of instrument Creating the charge	20/07/2010
Amount secured by the charge	Rs.500.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of Interest Base rate + 1.5% currently 9% p.a. payable at the end of every month. The interest rate is subject to reset after 6 months Terms of Repayment Bullet repayment at the end of the tenure Margin As per bank norms Extent and Operation of the charge The charge shall operate to the extent of the loan amount plus interest commission costs expenses and other charges thereon Others Short Term Loan Rs.500.000 Millions
Short particulars of the property charged	First pari passu charge on receivables of the company excluding receivables of Vale International, which are hypothecated to SBI for the specific Mobilisation Bank Guarantee limit of Rs.280.000 Millions Exclusive charge on the other current assets (excluding the receivables of the company)

Fixed Assets:

Computer Equipment

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	No
9) Name of person contacted	Yes
10) Designation of contact person	Yes
11) Turnover of firm for last two years	Yes
12) Profitability for last two 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	Yes

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 records 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.55.80
UK Pound	1	Rs.86.53
Euro	1	Rs.68.58

INFORMATION DETAILS

Information Gathered by :	SVA
Report Prepared by :	PRL

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	2
PAID-UP CAPITAL	1~10	2
OPERATING SCALE	1~10	1
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	2
--PROFITABILIRY	1~10	1
--LIQUIDITY	1~10	1
--LEVERAGE	1~10	1
--RESERVES	1~10	1
--CREDIT LINES	1~10	1
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--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		12

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.