MIRA INFORM REPORT

Report Date :

05.03.2012

IDENTIFICATION DETAILS

Name :	FRONTLINE CORPORATION LIMITED

Registered Office :	4, B.B.D. Bag (East), Stephen House, Room No.-5, 1^st Floor, Kolkata-700001, West Bengal

Country :	India

Financials (as on) :	31.03.2011

Date of Incorporation :	04.12.1989

Com. Reg. No.:	21-099645

Capital Investment/ Paid-up Capital:	Rs.50.000 Millions

CIN No.: [Company Identification No.]	L63090WB1989PLC099645

TAN No.: [Tax Deduction & Collection Account No.]	CALF00786C

PAN No.: [Permanent Account No.]	AAACF2403M

Legal Form :	A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.

Line of Business :	The Company has identified fine segments viz “Transportation, Trading, Manufacturing of Refractory bricks, Renting of Immovable Properties and Wind Power Generation.

No. of Employees:	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (41)

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

Maximum Credit Limit :	USD 634000

Status :	Satisfactory

Payment Behaviour :	Slow but Correct

Litigation :	--

Comments :	Subject is an established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. The company can be considered for small to mediocre business dealings at usual trade terms and conditions. Note: The company is listed but it is suspended from trading due to penal reasons.

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 – September 30, 2011

Country Name

Previous Rating

(30.06.2011)

Current Rating

(30.09.2011)

India

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

LOCATIONS

Registered Office :	4, B.B.D. Bag (East), Stephen House, Room No.-5, 1^st Floor, Kolkata-700001, West Bengal, India
Tel. No.:	Not Available
Fax No.:	Not Available
E-Mail :	frontlinecorp@eth.net

Corporate Office :	4^th Floor, Shalin Building, Near Nehru Bridge Corner, Ashram Road, Ahmedabad-380009, Gujarat, India
Tel. No.:	91-79-26578201/ 26578863 / 26579750
Fax No.:	91-79-26578863 / 26576619

DIRECTORS

(As on 30.09.2011)

Name :	Mr. Ram Prasad Agarwal
Designation :	Director

Name :	Mr. Narayan Prasad Agarwal
Designation :	Director

Name :	Mr. Saurabh Jhunjhunwala
Designation :	Director

Name :	Mr. Bharat Arora
Designation :	Independent Director

Name :	Mr. Virendra Sharma
Designation :	Independent Director

Name :	Mr. Jiw Raj Khaitan
Designation :	Additional Director

Name :	Mr. Sital Kumar Banerjee
Designation :	Additional Director

Name :	Mr. Pawan Kumar Agarwal
Designation :	Managing Director

KEY EXECUTIVES

Name :	Mr. S.K. Verma
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 31.12.2011)

Names of Shareholders	No. of Shares	Percentage
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	3,496,668	69.93
Bodies Corporate	49,300	0.99
Sub Total	3,545,968	70.92
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	3,545,968	70.92
(B) Public Shareholding
(1) Institutions
(2) Non-Institutions
Bodies Corporate	337,671	6.75
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	560,188	11.20
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	555,138	11.10
Any Others (Specify)	1,035	0.02
Non Resident Indians	1,035	0.02
Sub Total	1,454,032	29.08
Total Public shareholding (B)	1,454,032	29.08
Total (A)+(B)	5,000,000	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	5,000,000	-

BUSINESS DETAILS

Line of Business :

The Company has identified fine segments viz “Transportation, Trading, Manufacturing of Refractory bricks, Renting of Immovable Properties and Wind Power Generation.

Products :

ITC CODES	PRODUCT DESCRIPTION
--	Transportation Services
--	Trading in Auto Components
--	Wind Energy Generation

PRODUCTION STATUS

(As on 31.03.2011)

Particulars	Unit	Licensed Capacity *	Installed Capacity	Actual Production

Refractory Bricks	M.T.	N.A.	4800.00	3322.22

* Licensed capacity is Not Applicable and Installed capacity is as certified by the Management and being a technical matter, accepted by the Auditor as correct.

GENERAL INFORMATION

Customers :

Haldia Petrochemical Limited
Gujarat Heavy Chemicals Limited
Birla Copper
L&T Cement Limited
Shree Digvijay Cement Limited
Hindustan Lever Limited (STTP)
Indo Gulf Fertilizers and Chemical Corporation
Shaw Wallace Limited
Hindustan Coco Cola
Bevarages private Limited

No. of Employees :

Not Available

Bankers :

Axis Bank
Bank of Baroda
Dena Bank
HDFC Bank Limited
ICICI Bank Limited
State Bank of India
Punjab National Bank
Punjab and Sindh Bank
The Jammu and Kashmir Bank Limited

Facilities :

Secured Loans	31.03.2011 Rs. in Millions	31.03.2010 Rs. in Millions
Term Loans from Banks	238.584	253.452
Term Loans- Others	46.370	78.486
Working Capital Facilities	134.991	234.793
Total	419.945	566.731
Note: Term Loans from Bank are secured by mortgage of some of the building of the company and hypothecation of movable assets and some of the vehicles of the company. Term Loans- others are secured by the hypothecation of specified vehicles Financed by the lenders to the company and also by personal guarantee of some of the Directors of the company. Working Capital Facilities are secured by hypothecation of inventories and book debts, as well as mortgage of some of the property of the company, The bank is also holding personal guarantee of some of the Directors of the company.
Unsecured Loans	31.03.2011 Rs. in Millions	31.03.2010 Rs. in Millions
From Body Corporate	24.384	22.430
From Directors	0.275	0.275
Security Deposit and Trade Advances	10.617	64.618
Total	35.276	87.323

Banking Relations :	--

Statutory Auditors :
Name :	Paresh Thothawala and Company Chartered Accountants
Address :	Ahmedabad

Branch Auditors :
Name :	VPC and Associates Chartered Accountants
Address :	Kolkata

Associates :	Fair deal Supplies Limited Falgun Export Private Limited Centre for Advanced studies in Engineering Fair Chemical and Marketing Prima Financial Services Ltd. Fair deal (partnership firm) Frontline Industries Limited Jhunjhunwala Charitable Trust Scientific Weigh Bridge and Auto parts (partnership firm) Shiv Shakti Steel Private Limited

CAPITAL STRUCTURE

(As on 31.03.2011)

Authorised Capital :

No. of Shares	Type	Value	Amount

6000000	Equity Shares	Rs. 10/- each	Rs. 60.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

5000000	Equity Shares (Including 563700 Fully Paid up Equity Shares of Rs. 10/- each issued as Bonus Shares by way of capitalization of Accumulated Profits)	Rs. 10/- each	Rs. 50.000 Millions
Less:	Calls in Arrear		Rs. 0.225 Million
	Total		Rs. 49.775 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		49.775	49.775	49.775
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		108.643	89.686	74.200
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		158.418	139.461	123.975
LOAN FUNDS
1] Secured Loans		419.945	566.731	270.860
2] Unsecured Loans		35.276	87.323	198.317
TOTAL BORROWING		455.221	654.054	469.177
DEFERRED TAX LIABILITIES		28.520	34.893	20.898

TOTAL		642.159	828.408	614.050

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		324.653	392.304	417.802
Capital work-in-progress		1.599	1.021	0.876

INVESTMENT		94.417	94.518	94.638
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	128.134	62.379	42.691
	Sundry Debtors	190.985	123.451	76.858
	Cash & Bank Balances	28.450	15.862	15.976
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	176.910	357.569	66.154
Total Current Assets		524.479	559.261	201.679
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	247.828	177.129	60.729
	Other Current Liabilities	41.307	25.9130	39.724
	Provisions	13.854	15.654	0.492
Total Current Liabilities		302.989	218.696	100.945
Net Current Assets		221.490	340.565	100.734

MISCELLANEOUS EXPENSES		0.000	0.000	0.000

TOTAL		642.159	828.408	614.050

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Revenue from Operations	1014.903	931.969	645.749
		Other Income	73.245	36.366	20.297
		TOTAL (A)	1088.148	968.335	666.046

Less	EXPENSES
		Material Cost	562.124	406.586	185.688
		Operational Expenses	328.629	372.657	341.266
		Payment to and Provision for Employees	26.162	28.908	21.895
		Administrative and Other charges	35.462	33.775	21.744
		Increase / Decrease in Finished Goods	(0.752)	0.651	0.349
		TOTAL (B)	951.625	842.577	570.942

Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		136.523	125.758	95.104

Less	FINANCIAL EXPENSES (D)		76.534	44.612	33.580

	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		59.989	81.146	61.524

Less/ Add	DEPRECIATION/ AMORTISATION (F)		35.334	43.730	40.502

	PROFIT BEFORE TAX (E-F) (G)		24.655	37.416	21.022

Less	TAX (H)		5.698	21.930	7.918

	PROFIT AFTER TAX (G-H) (I)		18.957	15.486	13.104

Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		89.686	74.199	61.095

	BALANCE CARRIED TO THE B/S		108.643	89.685	74.199

	Earnings Per Share (Rs.)		3.81	3.11	2.63

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2011	30.09.2011
Type	1^st Quarter	2^nd Quarter
Net Sales	146.130	223.960
Total Expenditure	139.460	210.420
PBIDT (Excl OI)	7.170	13.540
Other Income	13540	15.370
Operating Profit	20.170	28.910
Interest	14.910	18.390
Exceptional Items	0.000	0.000
PBDT	5.800	10.520
Depreciation	6.300	6.400
Profit Before Tax	(0.490)	4.120
Tax	0.000	0.000
Provisions and contingencies	0.000	0.000
Profit After Tax	(0.490)	4.120
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	(0.020)
Other Adjustments	0.000	0.000
Net Profit	(0.490)	4.100

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	1.74	1.60	1.97

Net Profit Margin (PBT/Sales)	(%)	2.43	4.01	3.26

Return on Total Assets (PBT/Total Assets}	(%)	2.90	3.93	3.39

Return on Investment (ROI) (PBT/Networth)		0.16	0.27	0.17

Debt Equity Ratio (Total Liability/Networth)		4.79	6.26	4.60

Current Ratio (Current Asset/Current Liability)		1.73	2.56	1.99

LOCAL AGENCY FURTHER INFORMATION

OPERATIONAL / PERFORMANCE REVIEW

The company operates in five main business segments viz. Transportation, Trading, manufacturing, Generation of wind energy, and renting of immovable properties. The Transport Division comprises of income from Own Trucks and Logistic business is the 2nd largest in terms of sales revenue. This division accounts for 23.36% of the total turnover (including inter-segment) of the company for the year ended 31st March, 2011. Trading Division accounts for 63.42%, Manufacturing Division accounts for 4.34%, Generation of Wind Energy accounts for 1.19 % and others includes for 5.40 % of the total turnover of the company for the year ended 31st March, 2011. During the year the company has achieved operational income of Rs.1014.900 Millions as against Rs.932.000 Millions in the previous year. The company posted Profit before tax of Rs.24.000 Millions as against Rs.37.400 Millions in the previous year. The Company earned Profit after Tax of Rs.18.700 Millions as against Rs.15.500 Millions in the previous year after prior period adjustment of Rs.8.000 Millions in the current year. A balance of Rs.108.400 Millions.

SEGMENT INFORMATION

Segments information are given along with financial statements. The company has identified five segments viz "Transportation, Trading, Manufacturing of Refractory Bricks, Renting of immovable properties and Wind Power Generation". The major and material activities of the company are restricted to three geographical segments i.e. Kolkata, Ahmedabad and Bangalore.

TRANSPORTATION

The Company has two different kind of contracts viz, "Logistic Contracts and own trucks contract. Under the logistic contract, the Company enters into contract with its client for providing logistic support to various destinations by hiring trucks from the market and ensures transportation of goods to the designated destinations of its client. Under the contract for deployment of own trucks, the Company deploys its own trucks/ vehicles with its client round the clock. The Company expects 15-20% growth in both contracts.

During the year, the Company continued to get / renewed Transportation Contracts from valued customers to cater needs of its valued clients. The Revenue from Transport Operations decreased from Rs. 358.800 Millions in the previous year to Rs.254.300 Millions in the current year registering a decrease by 29.11% due to closure of one major Branch and increased cost of oil and spare parts. The Company has already restructured its transport activities for optimum utilization of its fleet of commercial vehicles and is hopeful to come out with robust results in the days to come.

Trading

BOSCH Division is acting as the Main Distributor for Auto Components manufactured by “BOSCH Limited.” for the Automotive Aftermarket and supplies such spares to Authorised Service Centers of Bosch as well as to retail outlets and neutral garages and workshops. BOSCH is the global leader in Automotive Components and “BOSCH” brand products come as OE fitments in all ranges of vehicles worldwide. With newer models of vehicles being introduced in the market every year, the business has very good potential in future. The Revenue from trading Operations of automotive parts of “BOSCH” increased to Rs. 164.600 Millions in comparison to Rs. 145.000 Millions in the previous year registering a increase 13.52%.

Mahindra and Mahindra Division is acting as the Super Distributor for Auto Components and Farm Equipment manufactured by “Mahindra and Mahindra Limited.,” for the Automotive Aftermarket. With newer models of vehicles being introduced in the market every year, the business has very good potential in future. The Revenue from trading Operations of automotive parts of “Mahindra and Mahindra Limited” increased to Rs. 130.600 Millions in comparison to Rs. 98.500 Millions in the previous year registering a higher increase of 32.60% mainly due to good potential in current scenario.

Iron and Steel Division:

The global iron ore market is hot. Everything good or bad about economic activities is visible here. On the one hand, there is strong recovery of demand with the global economic prospects back on track, statistically so till date, concerns nevertheless remain. On the other, speculators are back with panic driven Chinese steel industry rushing to build stock before they set the table for talks with the iron ore mining industry for the year’s contract.

The future of the global iron ore industry depends on China. Many believe the steel industry’s growth in China will slow down. At this stage, such a statement will be termed speculative only. The Chinese mills, however, may not

yield much ground. They will dig more into their own resources, import more from the spot market and thereby

reduce their dependence on contracted volumes, if the prices are not favorable. They have also invested heavily

overseas on iron ore assets and will bring in substantial quantities from there to meet some critical needs. The iron ore industry knows that pushing the Chinese mills to a tightrope will boomerang in the long term. More the Chinese mills are stressed, more assets will they acquire, which ultimately will reduce the dependence on the global iron ore cartel. China cannot be ignored by the iron ore miners after all they produce nearly half of world’s steel.

A question has always been in the forefront : should the global coal or iron ore contracts be floating types indexed

to steel prices, or a market based free float, or of a short duration, say, a month or a quarter? So far, the global

majors, tied to annual contracts, have not been able to capitalize on the higher spot prices running through the year on the average. It is not necessary that this will happen every year. Yet, an optimistic mining industry globally is pushing for this. This will effectively bring an end to the annual contracts.

The rise in global ocean freight has a very significant impact on the iron ore prices. A higher freight will effectively

reduce the contract levels set on fob basis. Any attempt to push the burden of rising ocean freight on to the buyer

will be resisted. And if iron ore shipping volumes drop, the dry bulk rates will also crash! One does not really know

who will bear the brunt of this. It depends on the strength of the market: who is weak and who is not on the

negotiating table.

India has taken a protectionist stance. The government needs revenue to support the routine development expenditure and also the stimulus measures. This also sends a signal to the local industry that rampant exports cannot be permitted forever when the local industry faces shortage. In addition, it has sent a strong signal that illegal mining has to stop. Many mines are currently under investigation with their mines lying closed. The local mining industry is lobbying hard to get out of the multiple crises.

“India’s Iron Ore: Following the Global Meltdown” report discusses the current iron ore business in India, prospects for the future and unfolds the opportunities to provide strategic guidance to investors and all others related to iron ore business in India.

Export of Iron Ores

During the year the Company exported 68,200 MT amounting to US D 84,30,041.65/-( INR 38,59,18,465.39) to China and Singapore as against 22,800 MT amount to US D 27,90,185.55 (INR 12,71,20,854) in the previous year, despite ups and down in International market . The Company look forward to continue export iron ores in the current year.

Bricks Division

The Company has facilities to manufacture Refractories Bricks of various sizes and qualities to cater the need of Steel Plants and Glass Plants.

The company’s manufacturing facility is located in Kadi, Gujarat. The plant is modern and is supported by a team of qualified professionals. The plant’s existing Installed Capacity is 4,800 Metric tons per annum. The company produces complete range of Refractories including:

Fireclay in Medium and High heat duty in all Shapes and sizes with Alumina contents from 30 to 45%
High Grog and High Alumina Refractories with Alumina contents from 45% to 99% for various applications

in Steel plants, Cement kilns, Glass furnaces, Sponge Iron, Aluminum, Non-Ferrous and Petrochemical

Industries.

Sillimanite and Andalusite bricks and blocks for Glass plants.
Basic bricks including Magnesite, Magnesia Carbon, Magnesite Chrome, Chrome Magnesite, Alumina

Chrome, Alumina Magnesia Carbon, Direct bonded Mag chrome etc

mortars for Power Plants and Chemical Industry
Insulation bricks in conventional and special light weight bricks
Various grades of mortars, ramming masses, gunning mixes and full range of Castables

Within a short span of its commencement of manufacturing of Refractories Bricks, The Division has long list of satisfied customers. The Revenue from Operations of the division increased to Rs. 47.400 Millions in comparison to Rs. 54.700 Millions in the previous year registering a slight decrease 12.80%. During the year the Company has not exported bricks.

Wind Energy Generation:

The company has been promoting Green Power through Wind Energy. We totally have commissioned capacity of 2.365 MW. The company has successfully registered the project under VCS. Second issuance is in process.

We continue to face the problem of realization of funds from the government and also the Load Shedding. Besides the late arrival of monsoon and the non availability of grid has affected the PLF. All the power generated is being sold to the Government and hence we need to wait for the payment which is getting delayed. This is having serious repercussions on the payments to be made for various term loans.

The Revenue from Operations of the division increased to Rs. 11.700 Millions in comparison to Rs. 12.200 Millions in the previous year registering a decrease of 4.10% due to unfavourable weather condition during peak seasons.

Renting of immovable properties

The Company is in the process of making investments in plots of various sizes at the competitive prices and is in the process of developing the plots. The income from Leave and Licence Agreement with TCS Limited., is giving a steady source of income.

The Revenue from Operations of the division increased to Rs. 24.900 Millions in comparison to Rs. 24.800 in the previous year registering a increase of 0.40%.

Management Discussion and Analysis Report

Transportation and Logistics industry:

The ability to move goods safely, quickly and cost-efficiently to markets is important for international trade, national distributive trades, and economic development.

The rapid increase in global trade up to the onset of the financial and economic crisis may explain the relatively fast growth of freight transport. In contrast, strains on transport infrastructure (congestion and delays), coupled with constraints over technical standards and governance issues may slow down developments within the freight transport sector. Transport in the Republic of India is an important part of the nation's economy. Since the economic liberalization of the 1990s, development of infrastructure within the country has progressed at a rapid pace, and today there is a wide variety of modes of transport by land, water and air. However, India's relatively low GDP has meant that access to these modes of transport has not been uniform.

India's rail network is the longest and fourth most heavily used system in the world, transporting over 6 billion passengers and over 350 million tons of freight annually.

Despite ongoing improvements in the sector, several aspects of the transport sector are still riddled with problems due to outdated infrastructure, lack of investment, corruption and a burgeoning population. The demand for transport infrastructure and services has been rising by around 10% a year with the current infrastructure being unable to meet these growing demands. According to recent estimates by Goldman Sachs, India will need to spend US$1.7 trillion on infrastructure projects over the next decade to boost economic growth, of which US$500 billion is budgeted to be spent during the Eleventh Five-Year Plan.

Industry characteristics

The Indian logistics sector is fragmented. Two-thirds of the total trucks are owned and operated by transporters with fleets smaller than five trucks. The result is intense competition, low freight rates and thin profitability. The logistics cost in India is still high compared with developed markets owing to a non-conducive policy environment, extensive industry fragmentation and infrastructure inadequacy The sector employs (directly and indirectly) about 40 million people. The sector is seeing increased productivity through growing investments in GPS tracking, radio frequency identification, online analytics and new supply chain tools. The entry of global logistics players in India is helping local companies benchmark with global standards.

Road transportation: Railways has remained a dominant mode of transport in India over the past few decades, but recently roadways have gained a significant share (more than 60% - inland transportation), while railways has lost its market share due to following reasons:

Industry overview

Over the last two decades, economic globalisation, trade liberalisation and competition have enhanced transportation needs to the point that now competent logistics management activities relating to the procurement, transport, transhipment and storage of goods is not just an economic support, but also recognised as an economy driver.

The Company has two different kind of contracts viz, “Logistic Contracts and own trucks contract. Under the logistic contract, the Company enters into contract with its client for providing logistic support to various destinations by hiring trucks from the market and ensures transportation of goods to the designated destinations of its client. Under the contract for deployment of own trucks, the Company deploys its own trucks/ vehicles with its client round the clock. The Company expects 15-20% growth in both contracts.

During the year, the Company continued to get / renewed transportation Contracts from valued customers to

cater needs of its valued clients. The Revenue from Transport Operations decreased from Rs. 35.88 Millions in the previous year to Rs.25.43 Millions in the current year registering a decrease by 29.11%. due to closure of one major Branch and increased cost of oil and spare parts. The Company has already restructured its transport activities for optimum utilization of its fleet of commercial vehicles and is hopeful to come out with satisfactory results in the days to come.

Trading Division:

The automotive aftermarket for parts in India is a large and growing market that spans manufacturers, distributors, retailers, service providers and garages. Currently worth INR 19,0000.00 Millions to INR 24,0000.00 Millions , the market has been growing at 11 per cent, and is estimated to reach INR 39,000 Millions to INR 44,0000.000 Millions by 2015. This growth will primarily be fuelled by the increasing number of vehicles on the road, as well as the aggressive expansion of independent and foreign players. While current margins for the industry remain attractive, players across the value chain may see margins reducing to the lower levels observed in developed economies. Therefore, to sustain profitability, it is imperative that players evaluate additional ways of capturing value, including expanding service networks, developing branded generic parts, forward integrating and building

scale. Looking ahead, revenue pools remain large across the value chain, hence if players are able to pursue appropriate strategies, significant profits can be made in this sector.

The Indian automotive aftermarket has been growing at a steady pace and is expected to expand rapidly over the next five years. The total size of this sector is currently estimated at USD 5 billion to USD 6 billion, while the global market is worth USD 490 billion to USD 540 billion.

The Indian market is valued at INR 19,0000.00 Millions to INR 24,0000.00 Millions, of which roughly 30 per cent comprises spurious parts. Commercial vehicles (CV), include multi-axle vehicles, light commercial vehicles (LCVs), buses and trailers account for roughly 22 per cent of this market (INR 4,5000.00 Millions to INR 5,5000.00 Millions), with Maharashtra, Tamil Nadu, Gujarat and Kerala accounting for over 40 per cent. The car market is estimated at INR 6,0000.00 Millions to INR 7,0000.00 Millions (34 per cent of the market) with Maharashtra, Andhra Pradesh, Delhi and Tamil Nadu cumulatively accounting for about 40 per cent of the share The two wheeler market is the largest at INR 10,000 Millions to INR 11,0000.00 Millions, or 44 per cent of the market, and Tamil Nadu, Maharashtra, Gujarat and Uttar Pradesh constitute close to 45 per cent of the market. This market is also expected to grow the fastest, given the strong growth in new sales (more than 15 per cent per year) and the large volume of two-wheelers entering the vintage for aftermarket parts (2 to 12 years).

BOSCH Division is acting as the Main Distributor for Auto Comp onents manufactured by "BOSCH Limited." for the Automotive Aftermarket and supplies such spares to Authorised Service Centers of Bosch as well as to retail outlets and neutral garages and workshops. BOSCH is the global leader in Automotive Components and "BOSCH" brand products come as OE fitments in all ranges of vehicles worldwide. With newer models of vehicles being introduced in the market every year, the business has very good potential in future. The Revenue from trading Operations of automotive parts of “BOSCH” increased to Rs. 164.60 Millions in comparison to Rs. 145.00 Millions in the previous year registering a increase 13.52%.

Refractories Division

The Indian Refractory Industry is more than a century old. With the passage of time it has made considerable improvements both in terms of volume of production and quality of products. The strengths of the Indian Refractory Industry are its assets like –

• Availability of many raw materials in the country itself.

• Availability of skilled and qualified manpower at a cheap rate.

• Presence of a continuously increasing, big market within the country itself.

These resources have been fully exploited by the refractory manufacturers to derive maximum benefits from them. According to a recent data at present, the Refractory Industry in India has an installed capacity of 1.7 million metric tons per annum from about 90 refractory units out of which 30 large and medium and 60 small scale units with a capital investment of about Rs.8000.00 Millions and providing direct employment to more than 30000 people engaged in manufacturing various grades of Refractories as per international standards and qualities. The annual production from these units has been in the range of 0.70 million tons, which implies capacity utilization of less than 50% of the installed capacity. This figure reflects that the trend of refractory production in India is almost comparable with the world trend where total installed capacity of about 2000 companies is roughly 40 million tons and the production is about 20 million tons which is almost 50% of capacity utilization.

Wind Energy Generation

The development of wind power in India began in the 1990s, and has significantly increased in the last few years. Although a relative newcomer to the wind industry compared with Denmark or the US, India has the fifth largest installed wind power capacity in the world. In 2009-10 India's growth rate was highest among the other top four countries.

As of 31 March 2011 the installed capacity of wind power in India was 4550 MW, mainly spread across Tamil Nadu (6007MW), Maharashtra (2310.70MW), Gujarat (2175.60 MW) , Karnataka (1730.10MW), Rajasthan (1524.70 MW), Madhya Pradesh (275.50MW), Andhra Pradesh (200.20MW), Kerala (32.8 MW), Orissa (2MW), West Bengal (1.1 MW) and other states (3.20 MW) It is estimated that 6,000 MW of additional wind power capacity will be installed in India by 2012. Wind power accounts for 6% of India's total installed power capacity, and it generates 1.6% of the country's power. India's wind atlas is available. The worldwide installed capacity of wind power reached 197 GW by the end of 2010. China (44,733 MW), US (40,180 MW), Germany (27,215 MW) and Spain (20,676 MW) are ahead of India in fifth position. The short gestation periods for installing wind turbines, and the increasing reliability and performance of wind energy machines has made wind power a favored choice for capacity addition in India.

Initial cost for wind turbines is greater than that of conventional fossil fuel generators per MW installed. Noise is produced by the rotor blades. This is not normally an issue in the locations chosen for most wind farms and research by Salford University shows that noise complaints for wind farms in the UK are almost non-existent.

The Ministry of New and Renewable Energy (MNRE) has fixed a target of 10,500 MW between 2007–12, but an additional generation capacity of only about 6,000 MW might be available for commercial use by 2012.

The company has been promoting Green Power through Wind Energy. We totally have commissioned capacity of 2.365 MW.

The company has successfully registered the VER project with APX Registry. The company has also sold the first VERs to First Climate, Germany. Next issuance is being planned in the next financial year i.e., 2011-2012 to get some volume.

Monsoon was not good but due to the north east monsoon and some extended monsoon would give some better generation. Wind Energy division had streamlined the process and had made efforts to put the machines running so that they have better Plant Load Factor (PLF).

We continue to face the problem of realization of funds from the government. All the power generated is being sold to the Government and hence we need to wait for the payment which is getting delayed. This is having serious repercussions on the payments to be made for various term loans.

Discussion on Financial performance

Transportation

During the year, the Company continued to get / renewed transportation Contracts from valued customers to cater

needs of its valued clients. The Revenue from Transport Operations decreased from Rs. 358.800 Millions in the previous year to Rs 254.300 Millions in the current year registering a decrease by 29.11%. due to closure of one major Branch and increased cost of oil and spare parts. The Company has already restructured its transport activities for optimum utilization of its fleet of commercial vehicles and is hopeful to come out with satisfactory results in the days to come.

Trading

BOSCH Division is acting as the Main Distributor for Auto Components manufactured by "BOSCH Limited." for the Automotive Aftermarket and supplies such spares to Authorised Service Centers of Bosch as well as to retail outlets and neutral garages and workshops. BOSCH is the global leader in Automotive Components and "BOSCH" brand products come as OE fitments in all ranges of vehicles worldwide. With newer models of vehicles being introduced in the market every year, the business has very good potential in future. The Revenue from trading Operations of automotive parts of “BOSCH” increased to Rs. 164.600 Millions in comparison to Rs. 145.000 Millions in the previous year registering a increase 13.52%.

Mahindra and Mahindra Division is acting as the Super Distributor for Auto Components and Farm Equipment manufactured by “Mahindra and Mahindra Limited.,” for the Automotive Aftermarket. With newer models of vehicles being introduced in the market every year, the business has very good potential in future. The Revenue from trading Operations of automotive parts of “Mahindra and Mahindra Limited” increased to Rs. 130.600 Millions in comparison to Rs. 98.500 Millions in the previous year registering a higher increase of 32.60% mainly due to good potential in current scenario.

Bricks Division

Export of Iron Ores

Wind Energy Generation

Renting of immovable properties

The Revenue from Operations of the division increased to Rs. 24.900 Millions in comparison to Rs. 24.800 millions in the previous year registering a increase of 0.40%.

CONTINGENT LIABILITIES NOT PROVIDED FOR :

Particulars	31.03.2011	31.03.2010
	(Rs. In Millions)
Bank Guarantees Issued	103.000	6.050
Claims against the company not acknowledged as debts (Including MACT claims aggregating to Rs.34.900 Millions for which the company holds adequate insurance)	40.152	40.152
Disputed Direct and Indirect taxes for which appeals are pending at different forums	5.116	8.748
Suit filed by the New India Insurance Company Limited to recover amount under the Carriers Act	21.288	21.288
LC discounted with bank (Sino Steel Holding Private Limited)	--	125.194
Advance on purchase of Land	2.200	1.038
Service Tax on rental Income	2.635	2.204
Total	174.890	204.673

Fixed Assets:

· Software

· Land

· Building

· Plant and Machinery and Equipments

· Furniture and Fixture

· Vehicles

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No 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.49.15
UK Pound	1	Rs.78.25
Euro	1	Rs.65.57

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--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	YES
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		41

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.

MIRA INFORM REPORT

128.134

62.379

190.985

123.451

28.450

15.862

0.000

0.000

176.910

357.569

524.479

559.261

247.828

177.129

41.307

25.9130

13.854

15.654

302.989

218.696

221.490

340.565

1.74

1.60

2.43

4.01

2.90

3.93

0.16

0.27

4.79

6.26

1.73

2.56

Unit