MIRA INFORM REPORT

Report Date :

05.05.2012

IDENTIFICATION DETAILS

Name :	MAHINDRA COMPOSITES LIMITED (w.e.f. 17.01.2007)
Formerly Known As :	SIRO PLAST LIMITED
Registered Office :	145, Mumbai-Pune Road, Pimpri, Pune-411018, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	18.08.1982
Com. Reg. No.:	028040
Paid-up Capital :	Rs. 43.900 Millions
CIN No.: [Company Identification No.]	L24117MH1982PTC028040
Legal Form :	Public Limited Liability Company Company’s shares are listed on the stock exchange.
Line of Business :	Manufacturer, Supplier and Exporter of Sheet Moulding Compound (SMC), Dough Moulding Compound (DMC), Distributor Box
No. of Employees :	120 (approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (46)

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

Maximum Credit Limit :	USD 658924
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail: infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
India	A1	A1

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

INFORMATION PARTED BY (GENERAL DETAILS)

Name :	Mr. Shailesh Pandhare
Designation :	Marketing Executive
Contact No.:	91-9011043253
Date :	20.04.2012

LOCATIONS

Registered Office/ Factory 1 :	145, Mumbai-Pune Road, Pimpri, Pune-411018, Maharashtra, India
Tel. No.:	91-20- 27425265 / 66 / 66300946
Mobile No.:	91-9011043253 (Mr. Shailesh Pandhare)
Fax No.:	91- 20-27425272
E-Mail :	iut@eth.net pandhareshailesh@mahindracomposites.com
Website :	www.mahindracomposites.com
Factory 2 :	Survey No. 178/0, Village Sale, Post : Vigawali, Mumbai – Goa Highway, Tal. Mangaon, District Raigad – 402104, Maharashtra, India
Tel. No.:	91-2140-263128/112
Fax No.:	91-2140-263145

DIRECTORS

As on 31.03.2011

Name :	Mr. Hemant Luthra
Designation :	Chariman
Name :	Mr. P N Vencatesan
Designation :	Director
Name :	Mr. R R Krishnan
Designation :	Director
Name :	Mr. C S Devale
Designation :	Director
Name :	Mr. M R Joshi
Designation :	Director

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.12.2011

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Bodies Corporate	1977203	44.79
(2) Foreign
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	2505	0.05
Financial Institutions / Banks	1600	0.04
(2) Non-Institutions
Bodies Corporate	187424	4.25
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	1654340	37.48
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	522945	11.85
Any Others (Specify)
Non Resident Indians	63	--
Total	4413924	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer, Supplier and Exporter of Sheet Moulding Compound (SMC), Dough Moulding Compound (DMC), Distributor Box
Products :	Sheet Moulding Compound Dough Moulding Compound Fibre Reinforced Plastic Distribution and Meter Box  Sheet Moulding Compound Dough Moulding Compound Fibre Reinforced Plastic Single Phase Distribution Box Single Phase Meter Box Three Phase Meter Box Three Phase Distribution Box, etc.
Exports :
Products :	Finished Goods
Countries :	Germany United Kingdom
Imports :
Products :	Raw Material
Countries :	China
Terms :
Selling :	L/C, Cash and Credit
Purchasing :	L/C, Cash and Credit

PRODUCTION STATUS AS ON 31.03.2011

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Sheet Moulding Compound	MT	1200	4000	1997
Dough Moulding Compound	MT	400	1000	1943
Moulded Components	MT/Nos	5000	3000	458025
Moulds	MT	NA	NA	11

NOTES:

1. Licenced capacity in respect of ‘Moulded Components’ is as disclosed in the prescribed memoranda filed with the Secretariat for Industrial Approvals (SIA), Department of Industrial Development, in terms of notification no.S.O.577(E) dated July 25, 1991.

2. Installed capacity is certified by management and not verified by the auditors as it is a technical matter.

3. Including production used for captive consumption.

4. Although the licenced and installed capacities in respect of ‘Moulded Components’ above are stated in tonnes, the actual production etc. has been stated in numbers as this is the form of measurement in which these are normally produced / sold. It has not been possible to indicate the licenced and installed capacities in numbers as the same will depend on product mix from year to year.

5. The actual production disclosed against moulds manufactured is the number of such moulds sold during the yearas the company considers a mould as ‘meant for sale’ only when it is actually sold. Actual production of moulds includes moulds produced by third parties on behalf of the company.

GENERAL INFORMATION

Customers :

• OEM’s
• End users

No. of Employees :

120 (approximately)

Bankers :

• HDFC Bank Limited
• Citi Bank

Facilities:

SECURED LOAN	Rs. In Millions 31.03.2011	Rs. In Millions 31.03.2010
From Banks:
Loan secured by hypothecation of vehicles purchased out of the said loan	2.682	2.182
Loan secured by hypothecation of equipments purchased out of the said loan	10.205	1.075
Working capital demand loan, cash credit and post shipment export credit (secured by hypothecation of movable assets including stocks and book debts)	46.248	52.150
From other than Banks:
Loan secured by hypothecation of vehicles purchased out of the said loan	0.150	0.261
TOTAL	59.285	55.668

Banking Relations :	-
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountant
Address :	Mumbai, Maharashtra, India

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

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

Issued :

No. of Shares	Type	Value	Amount
4405059	Equity Shares	Rs. 10/- each	Rs. 44.050 Millions

Subscribed :

No. of Shares	Type	Value	Amount
4404009	Equity Shares	Rs. 10/- each	Rs. 44.040 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		44.040	43.882	43.900
2] Employee Stock Options Outstanding		1.110	1.346	0.000
3] Reserves & Surplus		119.581	104.657	89.200
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		164.731	149.885	133.100
LOAN FUNDS
1] Secured Loans		59.285	55.668	50.500
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		59.285	55.668	50.500
DEFERRED TAX LIABILITIES		2.700	2.000	7.600
TOTAL		226.716	207.553	191.200
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		92.065	77.441	76.100
Capital work-in-progress		3.458	4.772	3.700
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	3.400
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	40.150	41.736	34.800
	Sundry Debtors	149.885	132.191	121.600
	Cash & Bank Balances	6.762	8.915	9.200
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	25.464	18.521	21.200
Total Current Assets		222.261	201.363	186.800
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	66.291	51.408	0.000
	Current Liabilities	7.983	6.802	6.600
	Provisions	16.794	17.814	12.800
Total Current Liabilities		91.068	76.024	78.800
Net Current Assets		131.193	125.340	108.000
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		226.716	207.553	191.200

PROFIT & LOSS ACCOUNT

	PARTICULARS			31.03.2011	31.03.2010	31.03.2009
	SALES
		Income		521.790	459.966	427.100
		Other Income		7.726	2.625	10.300
		TOTAL (A)		529.516	462.591	437.400
Less	EXPENSES
		Raw materials		351.768	309.710	291.500
		Power and Fuel Cost		0.000	0.000	8.200
		Employee Cost		0.000	0.000	31.900
		Other manufacturing expenses		78.457	59.680	11.500
		Selling and Administration Expenses		46.238	39.020	23.300
		Miscellaneous Expenses		0.000	0.000	14.100
		Increase/Decrease in Stock		(1.482)	(5.400)	(2.800)
		TOTAL (B)		474.981	403.010	377.700
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)			54.535	59.581	59.700
Less	FINANCIAL EXPENSES (D)			6.379	7.216	5.700
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)			48.156	52.365	54.000
Less/ Add	DEPRECIATION/ AMORTISATION (F)			10.668	13.685	8.600
	PROFIT BEFORE TAX (E-F) (G)			37.488	38.680	45.400
Less	TAX (I)			13.152	12.929	16.600
	PROFIT AFTER TAX (G-I) (J)			24.336	25.751	28.800
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD			82.512	68.690	52.700
Less	APPROPRIATIONS
			Proposed dividend	8.808	8.776
			Tax on proposed dividend	1.429	1.492	12.500
			Transfer to general reserve	1.825	1.931
	BALANCE CARRIED TO THE B/S			94.786	82.512	69.000
	Earnings Per Share (Rs.)			5.53	5.51	6.22

QUARTERLY RESULTS

PARTICULARS	30.06.2011	30.09.2011	31.12.2011	31.03.2012
Type	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Sales Turnover	134.000	147.100	135.500	150.600
Total Expenditure	124.600	133.800	127.600	138.200
PBIDT (Excl OI)	9.400	13.300	7.900	12.400
Other Income	0.000	0.000	0.000	0.000
Operating Profit	9.400	13.300	7.900	12.400
Interest	1.600	2.100	2.400	2.400
Exceptional Items	0.000	0.000	0.000	(21.400)
PBDT	7.600	11.200	5.500	(11.400)
Depreciation	2.600	3.000	3.500	5.100
Profit Before Tax	4.700	8.200	2.000	(16.500)
Tax	1.800	2.500	0.600	2.600
Reported PAT	2.900	5.700	1.400	(19.100)
Extraordinary Items	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000
Net Profit	2.900	5.700	1.400	(19.100)

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	4.59	5.57	6.58
Net Profit Margin (PBT/Sales)	(%)	7.18	8.41	10.63
Return on Total Assets (PBT/Total Assets}	(%)	11.93	13.87	17.29
Return on Investment (ROI) (PBT/Networth)		0.23	0.26	0.10
Debt Equity Ratio (Total Liability/Networth)		0.92	0.89	0.97
Current Ratio (Current Asset/Current Liability)		2.44	2.62	2.37

LOCAL AGENCY FURTHER INFORMATION

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

OPERATIONS:

The Company this year had a modest growth of 14%. This is lower than envisaged at the beginning of the year, mainly due to consolidation of infrastructure by net service providers which led to fall in off take of DG sets. You are aware that Company had successfully developed a NVH product for DG sets.

The Compound business grew marginally by 7%. The Component business showed significant growth of 30% improving the utilisation of resources at both Mangaon and Pune. This demand was driven by the surge in sales of automotive components and that of Electra (which included the beginning of export).

In spite of R and D efforts to develop cost effective formulations, the competitive environment and price pressure in the market place increased the material cost by 0.6%. EBIDTA was further strained by 1.2% due to expenses required, to improve the management bandwidth of the organization, to embrace growth in the future. The decrease in interest and depreciation contributed to reduce the difference in PAT over last year.

The Company is focused on new business development and is closing in on initiatives in various business segments. Share holders have sanctioned the project for manufacturing GRP pipes to be launched into production early next financial year.

This project will significantly impact the top and bottom line and give the Company the critical mass required to absorb more initiatives to drive the rapid growth of the organization.

The Company has upgraded its Quality and Sustainability Management Systems and is focused on process improvements to consolidate its position in the existing markets. To enable scalability the locations of Mangaon and Pune have improved connectivity round the clock for online use of ERP.

In January 2011, Mahindra and Mahindra launched a new brand identity spanning all industries, companies and geographies. The new brand positioning, expressed the word “RISE”, expresses a simple group core purpose: “They will challenge conventional thinking and innovatively use all their resources to drive positive change in the lives of their stakeholders and communities across the world, to enable them to Rise.”

They at Mahindra Composites also embarked on this journey with a grand ceremony at both their locations. Every body of them pledged to imbibe and propagate the cultural change with “RISE”. With focused initiatives at all levels and operation verticals Mahindra Composites family pledges to follow the three brand pillars of “RISE” – accepting no limits, alternative thinking and positive change. In coming years, they believe, Rise to yield strong business results by creating strong relationships and loyalty with customers, providing a clear guide for business

decisions and catalyzing ambitious and innovative internal growth.

MANAGEMENT DISCUSSION AND ANALYSIS – F11

F11 saw moderate growth in top line which came from the existing electrical and automotive business. The bottom line erosion is attributed to competitive price pressure in the markets of the existing business, non realisation of high margin new business and investments necessary to change the management bandwidth to enable growth in the future. The managements’ effort led to commitment to invest, by Mahindra and Mahindra. This project will double the top line in F13 and significantly improve the bottom line. The Company improved its score on Quality, Sustainability, Customer Appraisal and Employee Engagement.

INNOVATION AND TECHNOLOGY DEVELOPMENT:

The team of design and tooling engineers at the innovation centre has been engaged in developing new products and technologies. The team bagged two ICERP-JEC INNOVATION AWARDS this year at the bi-annual Indian Composite Industry symposium in Mumbai. The Seamless Carbon Fibre Wind Mill Blade bagged the innovation award in the Industrial and Chemical Category while the Battery Box for Electrical bagged the innovation award in the Transportation Category. The Seamless Wind Mill Blade made in Carbon Fibre has been successfully launched into production. This development has opened up new avenues in the Wind Energy Segment.

The exterior body panels developed by their engineers for Mahindra Defense were instrumental in establishing their credentials to attract new business for exterior body panels for the Mahindra Construction Equipment, Volvo and most recently for the Mahindra Navistar Automotive Ltd. Business with these customers will commence in F12.

The team has also developed low cost high quality injection molding DMC as a substitute for import to win market share from foreign manufacturers. This DMC is used for molding Head Lamps for Automotive applications. Efforts are on to develop low density compounds for the automotive industry.

Their engineers along with those of their reputed associates are engaged in R and D projects with leading OEMs in the electrical and automotive industry to develop state of the art technology. These efforts will bring in new business in the near future.

OPPORTUNITIES AND THREATS:

The Company continues to face the threat of lack of technological prowess, especially in the automotive field. Efforts are on to collaborate with foreign manufacturers to usher in state of the art technology for the light weighting initiative in the automotive industry. The available capacity on the 2000 T Press has helped to get the business for large parts from VOLVO.

The threat from new competitors in the SMC / DMC markets with the latest manufacturing know how continues and so their efforts to improve their manufacturing process. They have also invested in low cost automation to increase reliability and consistency in their supplies.

The leading electrical manufacturers have projected good sales of switch gear for circuit breakers in F12 and there is good opportunity for the compound business.

The growth of infrastructure projects like power distribution and water transportation provide an opportunity to increase their sales of ‘electra’ and invest in manufacturing pipes.

OUTLOOK F-12:

The Company has taken up an ambitious target of 25% growth.

Renewed buoyancy in electrical industry gives confidence of achieving the growth budgets in sales of compounds. The demand for components will also boost sales and utilization of press capacity. First quarter demand from all customers is already looking up and is strong. New products like exterior body panels and wind mill parts will also contribute to growth.

The export business which remained low last year is showing signs of recovery. Besides GE, the Company has also exported electra and sees more opportunity in this area in the years ahead. The export of composite junction boxes will see growth in export markets of Europe.

Rain water harvesting system is being rejuvenated to improve its benefit to the plant by reducing water costs at Mangaon plant.

This year will see intense project activity of construction of building and procurement, installation and commission of machinery to launch new product in the fluid transportation segment.

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.53.72
UK Pound	1	Rs.86.98
Euro	1	Rs.70.64

INFORMATION DETAILS

Information Gathered by :	PDT
Report Prepared by :	SDA

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--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	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		46

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.