MIRA INFORM REPORT

Report Date :

27.11.2012

IDENTIFICATION DETAILS

Name :	TD POWER SYSTEMS LIMITED
Registered Office :	No. 27, 28 and 29, KIADB Industrial Area, Dabaspet, Nelamangala Taluk, Bangalore – 562 111, Karnataka
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	16.04.1999
Com. Reg. No.:	08-025071
Capital Investment / Paid-up Capital :	Rs.332.376 Millions
CIN No.: [Company Identification No.]	L31103KA1999PTC025071
Legal Form :	A Public Limited Liability company. The company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer of A.C. Generators.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

A (57)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 17000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is well established company having fine track. Financial position of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal 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 – June 30, 2012

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

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

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	4/5
Rating Explanation	Means fundamentals of the company appears to be strong.
Date	August 2011

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office/ Plant/ Head Office :	No. 27, 28 and 29, KIADB Industrial Area, Dabaspet, Nelamangala Taluk, Bangalore – 562 111, Karnataka, India
Tel. No.:	91-80-22995700 / 66337700 / 27734432
Fax No.:	91-80-22995718
E-Mail :	tdps@tdps.co.in srivatsa.n@tdps.co.in prabhakar@tdps.co.in
Website :	www.tdps.co.in
Japan Branch Office :	Towa Building, 4th Floor, 3-3 Kitashinagawa, 3 Chome, Shinagawa-ku. Tokyo-140-0001, Japan
Tel. No.:	81-3-5783-5380
Fax No.:	81-3-5783-5381
City Office :	“RMJ Mandoth Towers” #37, 7th Cross, Vasanthnagar, Bangalore – 560052, Karnataka, India
Tel. No.:	91-80-22017800
Fax No.:	91-80-22017850

DIRECTORS

As on: 31.03.2012

Name :	Mr. Mohib N Khericha
Designation :	Chairman
Address :	711 – Mahakant, Opposite Hospital Ashram Road, Ahmedabad – 380006, Gujarat, India
Date of Birth/Age :	04.08.1952
Date of Appointment :	22.02.2000
Name :	Mr. Hithoshi Matsuo
Designation :	Managing Director
Address :	5-1-20-306, Miniamidai, Sagamihara City, Kanagawa – Ken, Japan
Date of Birth/Age :	04.02.2004
Qualification :	M.E.
Date of Appointment :	01.07.2002
Name :	Mr. Nikhil Kumar
Designation :	Joint Managing Director
Address :	21, 17^th Cross Malleswaram, Bangalore – 560055, Karnataka, India
Date of Birth/Age :	17.08.1967
Qualification :	B.E.
Date of Appointment :	01.10.2001
Name :	Mr. Tadao Kuwashima
Designation :	Director
Address :	G 12/1, Platinum City CMT1 HMT Main Road, Yeswanthpur Peenya Bangalore – 560058, Karnataka, India
Date of Birth/Age :	21.05.1947
Qualification :	B.E.
Date of Appointment :	01.02.2002
Name :	Mr. Salil Baldev Taneja
Designation :	Director
Name :	Mrs. Nandita Lakshmanan
Designation :	Director
Name :	Dr. Arjun Kalyanpur
Designation :	Director
Name :	Mr. Nitin Bagamane
Designation :	Director

KEY EXECUTIVES

Name :	Mr. N. Srivatsa
Designation :	Company Secretary
Name :	Mr. K. G. Prabhakar
Designation :	Chief Financial Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 30.09.2012

Category of Shareholder	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	6985524	21.02
Bodies Corporate	6026433	18.13
Any Others (Specify)	4553175	13.70
Any Other	4553175	13.70
Sub Total	17565132	52.85
(2) Foreign
Individuals (Non-Residents Individuals / Foreign Individuals)	4235254	12.74
Sub Total	4235254	12.74
Total shareholding of Promoter and Promoter Group (A)	21800386	65.59
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	1477131	4.44
Financial Institutions / Banks	7835	0.02
Foreign Institutional Investors	5326169	16.02
Sub Total	6811135	20.49
(2) Non-Institutions
Bodies Corporate	1539533	4.63
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	206750	0.62
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	1301516	3.92
Any Others (Specify)	1578268	4.75
Clearing Members	28074	0.08
Non Resident Indians	2268	0.01
Foreign Nationals	671656	2.02
Foreign Corporate Bodies	876270	2.64
Sub Total	4626067	13.92
Total Public shareholding (B)	11437202	34.41
Total (A)+(B)	33237588	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0.00
(1) Promoter and Promoter Group	0	0.00
(2) Public	0	0.00
Sub Total	0	0.00
Total (A)+(B)+(C)	33237588	0.00

BUSINESS DETAILS

Line of Business :

Manufacturer of A.C. Generators.

Products :

• Steam Turbine
• Horizontal Hydro
• Vertical Hydro
• Diesel Engine
• Wind Turbine
• Gas Engine
• Gas Turbine
• High Tension Motors

ITC Code No.	Product Description
3601	A C Generators

PRODUCTION STATUS (As on 31.03.2011)

Particulars	Unit	Installed Capacity	Actual Production
Generators	Nos	360	341
Motors	Nos	60	1

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· Bank of Baroda, Corporate Financial Services Branch, No.72, 1st Floor, Nitesh Lexington, Avenue, Brigade Road, Bangalore – 560025, Karnataka, India

· Bank of Baroda, Corporate Banking Branch, No. 26, Richmond Road, Bangalore – 560025, Karnataka, India

· ICICI Bank

· ABN Amro Bank

Facilities :

(Rs. In Millions)

Secured Loan

As on

31.03.2012

As on

31.03.2011

Term Loans - from Banks

0.197

238.993

Loans repayable on demand

from banks

296.297

283.784

from others

46.336

0.000

Total

342.830

522.777

ADDITIONAL INFORMATION

	31.03.2012	31.03.2011
Details of security for secured loans
Term Loans from Bank of Baroda Balance of Term Loan from Bank of Baroda as on 31st March, secured by the First charge on Land, Building, Specific Plant and Machinery, Furniture and Office Equipment, First Charge on all Current Assets of the company and Personal Guarantee of two Directors – Mr. Nikhil Kumar and Mr. Hitoshi Matsuo (since waived)	0.000	314.255
Vehicle Loans from ICICI Bank Secured by specific charge on Motor Vehicles Terms of repayment of term loans and others Vehicle loans repayable in 35 Equated Monthly Installments with an interest rate of 7.75% (fixed)	3.876	7.635
Balance of Working Capital Loan from Bank of Baroda as on 31st March – Secured by Hypothecation of Raw Materials, Goods-in-process, Finished Goods and Book Debts and a charge on Fixed assets of the company and secured by Personal Guarantee of two Directors - Mr. Nikhil Kumar and Mr. Hitoshi Matsuo (since waived)	296.297	283.784
From Bank of Tokyo Mitsubishi UFJ Limited, Tokyo, Japan secured by goods pending shipment.	46.336	0.000
Loans repayable on demand - from banks Terms of repayment of unsecured loans From banks – repayable on demand and carries an Interest at 2% over base rate (floating) From others – Interest at 3.10% p.a.	296.297	283.784

Unsecured Loan

As on

31.03.2012

As on

31.03.2011

Loans repayable on demand

from banks

0.000

250.000

Total

0.000

250.000

Banking Relations :	--
Auditors :
Name :	B.K. Ramadhyani and Company Chartered Accountants
Address :	4 – B, Chitrapura Bhavan, No. 68, 8^th Main, 15^th Cross, Malleswaran, Bangalore – 560 055, Karnataka, India
Subsidiary :	DF Power Systems Private Limited

CAPITAL STRUCTURE

As on: 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
35000000	Equity Shares	Rs.10/- each	Rs.350.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
33237588	Equity Shares	Rs.10/- each	Rs.332.376 Millions

Note:

1. The Company has only one class of equity shares having par value of Rs.10/- each. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.

During the period ended 31 March 2012, the amount of per share dividend recognised as distribution to equity share holders is Rs. 2/- (31 March 2011 Rs.2/-)

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

2. Particulars of equity shareholders holding more than 5% of the total paid up equity share capital

	As at 31.03.2012
	Percentage	No. of shares
Saphire Finman Services Private Limited	18.13	6026433
Nikhil Kumar	15.46	5138664
Hitoshi Matsuo	12.74	4235254
Sofia M Khericha	6.27	2084100
Mohib N Khericha	5.56	1846860
Foziya Akil Contractor	4.02	1334823

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		332.376	243.704	63.436
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		3999.471	1531.436	1177.513
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		4331.847	1775.140	1240.949
LOAN FUNDS
1] Secured Loans		342.830	522.777	682.193
2] Unsecured Loans		0.000	250.000	0.000
TOTAL BORROWING		342.830	772.777	682.193
DEFERRED TAX LIABILITIES		87.759	72.912	0.000
TOTAL		4762.436	2620.829	1923.142
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1302.342	1119.749	1097.043
Capital work-in-progress		126.422	20.436	0.000
INVESTMENT		204.125	204.125	33.050
DEFERREX TAX ASSETS		0.000	0.000	(70.190)
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	829.533	777.166	373.312
	Sundry Debtors	1431.452	1194.725	1131.868
	Cash & Bank Balances	2025.586	909.508	677.632
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	919.891	376.222	369.080
Total Current Assets		5206.462	3257.621	2551.892
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	929.961	896.520	815.652
	Other Current Liabilities	1013.237	974.868	799.808
	Provisions	133.717	109.714	73.193
Total Current Liabilities		2076.915	1981.102	1688.653
Net Current Assets		3129.547	1276.519	863.239
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		4762.436	2620.829	1923.142

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	6252.120	4878.802	4335.888
		Other Income	156.821	69.431	52.111
		TOTAL (A)	6408.941	4948.233	4387.999
Less	EXPENSES
		Cost of materials consumed	2757.803	2578.722
		Purchases for Project Business	1779.563	1146.909
		Changes in inventories of finished goods, work in progress and stock in trade	(27.628)	(304.823)
		Employee benefits expense	469.190	368.258
		Other expenses	536.089	386.619
		TOTAL (B)	5515.017	4175.685	3768.112
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		893.924	772.548	619.887
Less	FINANCIAL EXPENSES (D)		65.679	66.867	42.255
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		828.245	705.681	577.632
Less/ Add	DEPRECIATION/ AMORTISATION (F)		89.987	78.911	55.814
	PROFIT BEFORE TAX (E-F) (G)		738.258	626.770	521.818
Less	TAX (H)		240.077	210.367	190.588
	PROFIT AFTER TAX (G-H) (I)		498.181	416.403	330.230
	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1208.639	1042.976	786.026
	Capitalisation of Reserves During the year		0.000	162.469	0.000
	APPROPRIATIONS
		Transfer to General Reserve	NA	31.434	36.172
		Dividend	NA	56.836	37.108
	BALANCE CARRIED TO THE B/S		NA	1208.639	1042.976
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	1495.366	471.723	310.726
		Other Earnings	3.363	0. 270	0.530
	TOTAL EARNINGS		1498.729	1498.729	311.256
	IMPORTS
		Raw Materials	495.070	376.590	248.278
		Capital Goods	74.316	10.559	325.700
	TOTAL IMPORTS		569.386	387.149	573.978
	Earnings Per Share (Rs.)		16.94	37.55	52.06

QUARTERLY RESULTS

PARTICULARS	30.06.2012 Unaudited	30.09.2012 Unaudited
	1st Quarter	2nd Quarter
Net Sales	1082.150	971.680
Total Expenditure	925.080	854.600
PBIDT (Excl OI)	157.070	117.080
Other Income	103.050	58.090
Operating Profit	260.120	175.170
Interest	8.080	8.320
Exceptional Items	0.000	0.000
PBDT	252.040	166.850
Depreciation	25.950	28.480
Profit Before Tax	226.090	138.380
Tax	84.090	35.720
Provisions and contingencies	0.000	0.000
Profit After Tax	142.000	102.660
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	142.000	102.660

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	7.77	8.42	7.53
Net Profit Margin (PBT/Sales)	(%)	11.81	12.85	12.03
Return on Total Assets (PBT/Total Assets}	(%)	11.34	14.32	14.30
Return on Investment (ROI) (PBT/Networth)		0.17	0.53	0.42
Debt Equity Ratio (Total Liability/Networth)		0.56	1.55	1.91
Current Ratio (Current Asset/Current Liability)		2.51	1.64	1.51

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	No
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	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	No
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

OPERATIONS

The financial year 2011-12 witnessed challenging macro-economic conditions both in India and the world over. After having grown at the rate of 8.4 per cent in each of the two preceding years, India’s GDP is estimated to have grown by 6.9 per cent in the financial year 2011-12. With agriculture and services having performed well, India’s slowdown can be attributed almost entirely to weak industrial growth. The tightening of monetary policy in order to control inflation slowed investment and growth, particularly in the industrial sector. The global economy also witnessed lower to sluggish economic growth, accelerated by crisis in the Eurozone area and near-recessionary conditions prevailing in Europe; sluggish growth in many other industrialized countries, like the USA; stagnation in Japan; and hardening international prices of crude oil.

In the backdrop of negative macroeconomic environment including slowdown of the economy, liquidity contraction, rising interest rates and the resulting slowdown in investment, the company’s has performed well during the year 2011-12 drawing upon its strengths in technology, product suitable for diverse applications and a world class manufacturing facility capable of delivering a quality product meeting international standards.

The highlights of the Company’s performance for the year are as under:

· Revenue from operations increased by 28.15% to Rs.6252.120 Millions (Rs.4878.802 Millions)

· Exports increased by 217% to Rs.1495.366 Millions (Rs.471.723 Millions)

· Order inflow increased by 12.27% at Rs. 5220.312 Millions (Rs.4649.976 Millions)

· 308 (338) Generators of various ranges up to 52 MW were manufactured

· Profit before depreciation and tax increased by 17.37% to Rs.828.245 Millions (Rs.705.682 Millions)

· Profit after tax increased by 19.64% to Rs.498.181 Millions (Rs.416.463 Millions)

· Produced the largest vertical generator for a project in Turkey, 24 megawatt, 500 rpm (equal a 100 megawatt machine if compared say a steam turbine generator).

· Supplied the first prototype machine for the Gas Engine business

· Successful Initial public offering of equity shares to raise Capital aggregating to Rs.2270.000 Millions under unfavorable capital market conditions.

· License agreement with Siemens AG signed in March 2012 for know-how to manufacture in India, industrial, air-cooled, 2-pole AC generators in the range of 54MW to 200 MW.

MANUFACTURE OF NEW GENERATION GENERATORS

It is proposed to establish, in the vicinity of the existing manufacturing facility at Bangalore, a new facility for manufacture of new generation generators of 54 to 200 MW. This project is the outcome of a long-term license agreement with Siemens AG signed by the company in March 2012 under which, the company will receive from Siemens, the know-how for manufacture of industrial, air-cooled, 2-pole AC generators in the range of 54 to 200 MW (74 MVA to 250 MVA) in India and is entitled to receive technology updates for 20 years for this range of generators. This will equip the company to address a wider range of industrial demand for generators – between 1 MW to 200 MW by extending its strong position in focus markets and also help meet the requirement of its EPC business, which is currently reliant on imports.

Initially, in terms of the purchase frame agreement signed with Siemens, the company also has the option to purchase components from Siemens, Germany. This will enable the Company to commence commercial production of these larger capacity generators in 24 months.

The estimated cost of the project is Rs.1989.700 Millions towards land andbuilding, machinery and equipments, Licence and training fees and other assets. The pattern of financing will include a utilization from IPO proceeds of about Rs.820.000 Millions, from internal accruals of the fiscal 2011 to 2014 estimated at Rs.670.000 Millions and borrowings of about Rs.500.000 Millions as and when required.

The Company has been reviewing the deployment of the Net Issue Proceeds (NIP) in the objects of city office in Bangalore and working capital requirements and the possibilities of deploying the same along with the unutilsed NIP available under debt repayment and general corporate purposes in productive assets/objects, which may contribute to enhancing company’s earnings and translate into returns for the shareholders in the next 24–36 months and the Directors recommend that the said proceeds be utilized to partially fund the above project subject to approval of the shareholders. Attention of the shareholders is drawn to Item 7 of the Notice of the Annual general meeting in this regard.

MANAGEMENT DISCUSSION AND ANALYSIS

POWER SECTOR

India continues to be one of the world’s fastest growing energy markets and is expected to be the second-largest contributor to the increase in global energy demand by 2035, accounting for 18% of the rise in global energy consumption. Power continues to be one of the critical resources in order to sustain and further economic growth in India. Therefore, the Government of India announced capacity additions of around 40, 000 MW (40GW) and 66,000MW (66 GW) under the Tenth and Eleventh Plans, respectively. However, the Tenth Plan witnessed capacity additions of only 21,095MW and it is reported that under the eleventh plan the capacity addition is 53,922 MW as on 29.03.12. The growth in capacities has been insufficient to meet the increase in demand and as a result Demand supply gap between electricity generation and demand touched 8.2% in April 2012 according to the Central Electricity Authority (CEA). The total demand for electricity in India is expected to cross 950,000 MW (950.00GW) by 2030.

The Indian power sector comprises of three major segments namely Generation, Transmission, and Distribution. The Generation segment comprises of Central, State and Private Sectors. The total installed capacity of power generation across the three sectors is 2,01,637.03 MW [201.64 Giga watts (GW)] as on April 30, 2012. Thermal power plants constitute 66.14% of the installed capacity, hydroelectric about 19.33% and rest being a combination of wind, small hydro, biomass, waste-to-electricity (12.15%) and nuclear (2.38%).

The Government of India, as initiated policy initiatives to harness India’s potential in renewable energy by promoting clean and green power which will also help reduce dependence on thermal power from the current levels. In efforts towards augmenting power generation, a transformational policy initiative has been the Electricity Act 2003 which liberalized the frame work for generation, enabling the setting up of captive power plants (CPP) to supply power generated by them to the national grid. Manufacturing and process industries in India account for close to half of India’s total power consumption. Due to the lack of reliable power supply from the grid it has become imperative for industries to set up power plants for captive consumption. The other factor prompting industries to set up own generation units are the lower cost of generation as compared to cost of power from the grid. The CPP’s supply surplus power to the grid and to merchant power traders which affords an opportunity to augment their revenues. Industries such as steel, aluminum, copper, cement, engineering, sugar, chemicals, which are power intensive, contribute significantly to the total CPP installed capacity.

COMPANY’S BUSINESS

The company is one of the leading manufacturers of AC Generators with the capability to manufacture generators with output capacities ranging from 1MW – 52MW for prime movers such as steam turbines, gas turbines, hydro turbines, wind turbines, diesel and gas engines. The Company has a diverse product range which includes, steam turbine generators, horizontal hydro generators, vertical hydro generators, diesel engine generators, wind turbine generators, gas engine generators, gas turbine generators, high voltage motors and generators for Geo Thermal and Solar thermal applications. They focus on manufacturing engineered-to-order generators for their customers who are based across the world. From the inception of their Company and as of March 31, 2012, they have manufactured a total of 1,759 generators with an aggregate output capacity of 14,750 MW, of which 274 generators have been supplied to customers across 38 countries.

The company’s customer base primarily comprises companies operating in the industrial sector and includes cement, steel, paper, chemical, metals, sugar co-generation, bio-mass power plants, hydro-electric power plants and Independent Power Plant companies. This diversified product offering has enabled the company to develop a broad customer base across a range of industries and reduced dependence on any particular industry or market segment while giving a competitive advantage in catering to all the major verticals of the power generation industry. They cater to both conventional and renewable fuel based power plants. Conventional power plants consist of steam/gas turbine power plants and diesel gas engine power plants and renewable fuel based power plants include wind, hydro, bio-mass, solar thermal and geothermal power plants. A majority of future power plants will be based on conventional fuels and their Company has the entire range of generators to cater to this sector. With their technological relationships with the leading power equipment manufacturers we also have the ability to design and manufacture a complete range of generators required to cater to the renewable fuel based segment of the power generation market.

The company has a world class manufacturing facility consisting of two manufacturing units located in Dabaspet, Industrial Area on the outskirts of Bangalore. The manufacturing facilities are equipped with advanced machinery and equipment and are ISO 9001:2008 compliant. Their Company is ISO 9001-2008 certified and ISO 14001/OHSAS 18001:2007 certified by TUV SUD Management Services GmBH, Munich.

The company has developed a reliable and quality based subcontracting and vendor network supplement its operations. The company’s strong project management abilities enable it to control costs and achieve efficient operations. The company is committed to provide high quality products that meet the expectations of both Indian and international customers.

The company’s in-house design and development team focuses on absorption of technology available from their technology partners and evolving optimal solutions to meet the varied needs of the customers. Over the years, the company honed the capability to design products to meet exacting performance standards.

In addition to manufacturing AC Generators their Company also executes Turbine Generator island projects for steam turbine power plants with output capacity up to 52 MW using a Japanese turbine combined with their generator. The scope of work of the TG island projects consists of design services, procurement and supply of equipment, assembly, installation and commissioning.

Their Subsidiary, DF Power Systems Private Limited, is in the business of Engineering, Procurement and Construction, executing Boiler-Turbine Generator island projects and the balance of plant portion for steam turbine power plants with output capacity from 52 MW up to 150 MW. The scope of work for the EPC Business comprises of design services, procurement and supply of equipments, assembly and installation and commissioning (excluding civil works).

OUTLOOK

From nearly double-digit growth before the global recession India’s economic growth shows signs of a slump to less than 7%. Core sector growth reflects sluggishness. Sliding Rupee, high interest costs, low corporate investments, stubbornly high inflation and high fiscal and trade deficits have been the feature currently in this fiscal which has forced a dismal growth forecast for the fiscal 2013 going forward. Measures are needed by the government to kick-start the investment cycle growth. There is no visibility of a sustained Global recovery and Eurozone crisis continues to rage affecting India’s economic growth.

A failing economy, low industrial growth, unfavourable investment climate have resulted in the company’s order book reflecting a significant deficit as compared to Fiscal 2012. There is a general weakness across all industries and there is no sector that’s providing support for order booking reflecting a great deal of uncertainty in the market for capital expenditure and capital goods. However, the company has undertaken a slew of measures including cost reduction to weather the unfavourable economic and market conditions. The company is in advanced stages in various development processes it has undertaken in Fiscal 2012. The first prototype Gas Engine machine has been supplied to a multinational group and will be tested shortly. The wind generator also will be delivered to multinational group in the next two months. Following the delivery of the prototype generators, there will be an evaluation process and after which it is expected that bulk orders will be received from these multinational groups for execution either in Q3 or Q4 of this financial year. Also, in the last quarter the company has produced the largest vertical generator (24 megawatt, 500 rpm) for a German hydro company, for a project in Turkey. The Company is developing a new series of generators once again for reducing costs in both gas turbine and steam turbine generators and continues to develop new products across all its customer bases. The company will continue investments as planned for generators below 15 megawatt out of the proceeds of the initial public offer. It is also proposed to commence investments for manufacture of 2 pole generators- larger generators between 59 megawatt and 200 megawatt the 2 pole generators. By ensuring timely investments in enhancing both its product offerings and manufacturing facilities, the company will be well prepared to harness the emerging opportunities in the power sector in India and globally.

Similarly in the projects business the company has concluded a number of orders against which advance payments are awaited. In the EPC business too the company has booked some orders against which advances are awaited. In both the project business and the EPC business, the customers from whom orders have been received have a strong financial standing and they are hopeful that they will be able to achieve financial closure of the projects and release advances to the company. The company is focused on increasing the order booking execution for the current fiscal. Given the above initiatives, the company is hopeful of sustaining the operating performance this fiscal, as in the fiscal 2012.

ECONOMIC FACTORS

Economic buoyancy, investment climate, interest rate regime, global economic and market conditions drive growth and performance of the industrial sector which forms the company’s customer base. A difficult business environment for Industry directly affects investment climate and may affect the demand for the company’s products which are capital goods.

TECHNOLOGY AND PRODUCT CONCENTRATION

The company’s future success will depend in part on its ability to respond to technological advances and emerging power generation industry standards and practices on a cost-effective and timely basis. In the past the company has relied upon, and in the future will continue to rely upon, the provision of technology from certain technology providers with whom agreements have been executed for licensing certain key technologies and intellectual property which are utilized to manufacture some of the company’s products. If any of these agreements are terminated or if ability to use such technology is restricted, the company may not be able to manufacture some of its products.

Historically the sale of steam turbine generators contributed 84% of their stand-alone net sales. Any radical change in the technology for steam turbine generators or the development of steam turbine generators that prove superior in quality or effectiveness to their generator could result in loss market share for the company’s steam turbine generators.

DELAYS IN CONTRACT EXECUTION UNDER POWER PROJECT BUSINESS

In the event of delays in completion of a power plant project within the specified timeframe, customers are typically entitled to receive liquidated damages for the delay from the company, to the extent of “limit of liability” for the delay in project completion, as mutually agreed by the company and the customer. In the contract customers may collect this payment from the company by direct payment or through deduction from the company’s receivables or invoke the bank guarantees provided by the company in connection with the performance of the project or retain security deposits as compensation for such damages. As the company continues to undertake power plant projects increasing the business volume, the company continues to face this risk.

PERFORMANCE

FINANCIAL REVIEW

The financial statements have been prepared in accordance with the requirements of the Companies Act, 1956 and Generally Accepted Accounting Principles (GAAP). There are no material departures in adoption of the prescribed accounting standards. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities as the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The estimates and judgments relating to the financial statements have been made on a reasonable basis, so that the financial statements reflect the form and substance of transactions in a true and fair manner, and reasonably represent the Company’s state of affairs and profit for the year.

CONTINGENT LIABILITIES

(Rs. In Millions)

Particular	31.03.2012	31.03.2011
Claims against the Company not acknowledged as debts	19.711	0.000
Guarantees	647.282	871.839
Letters of credit	173.803	183.208

Note:

The management believes, based on internal assessment and / or legal advice, that the probability of an ultimate adverse decision and outflow of resources of the Company is not probable and accordingly, no provision for the same is considered necessary.

FIXED ASSETS

· Free Hold Land

· Lease Hold Land

· Buildings

· Plant and Machinery

· Office Equipments

· Furniture and Fixtures

· Computers

· Communication Equipments

· Motor Vehicles

STATEMENT OF STANDALONE UNAUDITED RESULTS FOR THE QUARTER AND 6 MONTHS ENDED SEPTEMBER 30, 2012

Sl. No.	PARTICULARS	Standalone
		Quarter ended		Half Year ended
		30.09.2012	30.06.2012	30.09.2012
		(REVIEWED) (Rs.)	(REVIEWED) (Rs.)	(REVIEWED) (Rs.)
1.	Income from Operations
	Net Sales	971.683	1082.148	2053.831
	Other Operating Income	-	-	-
	Total income from operations (net)	971.683	1082.148	2053.831
2.	Expenses
	a. Cost of materials consumed	343.331	598.295	941.626
	b. Purchases for project business	273.127	86.868	359.995
	c. Changes in inventories of finished goods, work-in-progress	61.575	12.000	73.575
	d. Employee benefits expense	89.557	121.982	211.539
	e. Depreciation and amortisation expense	28.480	25.954	54.434
	f. Other expenses: (Any item exceeding 10% of the total expenses relating to continuing operations to be shown separately)	87.004	105.937	192.941
	Total expenses	883.074	951.036	1834.110
3.	Profit / (Loss) from operations before other Income, finance costs and exceptional items (1-2)	88.609	131.112	219.721
4.	Other Income	58.094	103.047	161.141
5.	Profit / (Loss) from ordinary activities before finance costs and exceptional items (3+/-4)	1467.03	234.159	380.862
6.	Finance costs	8.319	8.075	16.394
7.	Profit / (Loss) from ordinary activities after finance costs but before exceptional Items (5+/-6)	138.384	226.084	364.468
8.	Exceptional items	-	-	-
9.	Profit / (Loss) from ordinary activities before tax (7+/-8)	138.384	226.084	364.468
10.	Tax expense	35.721	84.086	119.807
11.	Net Profit / Loss from ordinary activities after tax (9+/-10)	102.663	141.998	244.661
12.	Extraordinary Items (Net of tax expense Rs. in Million)	-	-	-
13.	Net Profit / (Loss) for the period (11+/-12)	102.663	141.998	244.661
14.	Share of Profit / (Loss) of associates*	-	-	-
15.	Minority interest*	-	-	-
16.	Net Profit / (Loss) after taxes, minority interest and share of profit / (loss) of associates (13+/-14+/-15)*	102.663	141.998	244.661
17.	Paid-up Equity Share Capital (Face value of Rs.10/- per share)	332.376	332.376	332.376
18.	Reserves excluding Revaluation Reserves as per balance sheet of previous accounting year	-	-	-
19.i	Earnings Per Share (before extraordinary items) (of Rs /- each) (not annualised):	-	-	-
	a) Basic	3.09	4.27	7.36
	b) Diluted	3.09	4.27	7.36
19.ii	Earnings Per Share (after extraordinary items) (of Rs /- each) (not annualised):	-	-	-
	a) Basic	3.09	4.27	7.36
	b) Diluted	3.09	4.27	7.36
	* Applicable in the case of consolidated results.
A
1.	Public shareholding
	- Number of Shares	11437202	11437202	11437202
	- Percentage of Shareholding	34.41	34.41	34.41
2.	Promoters and Promoter Group shareholding a) Pledged / Encumbered
	- Number of Shares	Nil	Nil	Nil
	- Percentage of shares (as a % of the total shareholding of Promoter
	and Promoter Group)	Nil	Nil	Nil
	- Percentage of shares (as a % of the total share capital of the Company)	Nil	Nil	Nil
	b) Non-encumbered
	- Number of Shares	21800386	21800386	21800386
	- Percentage of shares (as a % of the total shareholding of Promoter
	and Promoter Group)	100	100	100
	- Percentage of shares (as a % of the total share capital of the Company)	65.59	65.59	65.59

B	INVESTOR COMPLAINTS	6 Months Ended (30.09.2012)
	Pending at the begining of the quarter	Nil
	Received during the quarter	Nil
	Disposed of during the quarter	Nil
	Remaining unresolved at the end of the quarter	Nil

Note:

1. The above Financial results were subjected to a limited review by the statutory auditors. There are no qualifications in the limited review report issued by the statutory auditors.

2. The said financial results have been reviewed by the Audit Committee and approved by the Board of Directors at its meeting held on November 07, 2012.

3. The consolidated financial statement for the Quarter and half year ended 30.09.2012 are prepared in accordance with AS 21 issued by the Institute of Chartered Accountant of India.

4. Previous years/periods figures have been re-grouped/rearranged in confirmity with revised schedule VI of the Companies Act 1956.

5. The remuneration payable to the Managing Director for the period April 1, 2012 to September 30, 2012 is subject to approval of the Central government for which an application has been made to the Central government. The remuneration payable to Director –Technical for the month September 2012 is subject to approval of the Central government.

6. Mr. Hitoshi Matsuo retired as the Managing Director of the company wef September 30, 2012 in terms of the, terms of appointment. However, he has been appointed as a whole time director wef October 1, 2012 based at Japan. Mr Nikhil Kumar Joint Managing director has been designated as Managing Director of the company wef October 1, 2012.

7. Statement of utilisation of IPO proceeds

(Rs. In Millions)

Sl. No.	Expenditure Items	IPO Proceeds (Total estimated cost) (Rs.)	Utilisation as of 30.09.2012 (Rs.)	Balance to be utilised (Rs.)	Transfer	Remarks
	Amount Received from IPO
1	Finance the expansion of our manufacturing plant in Dabaspet	1027.360	852.844	174.516	-
2	Construction of a project office in Bangalore City	289.090	-	**289.090	289.090	Transferred to object No. 06
3	Repayment of debt	328.070	***274.157	##53.913	53.913	Balance transferred to object No. 06
4	Funding working capital requirements of our Company	400.000	-	**400.000	400.000	Transferred to object No. 06
5	General corporate purposes	225.480	***139.082	##86.398	86.398	Balance transferred to object No. 06
	Transfer of IPO proceeds of above 4 objects to 6 below	(829.401)	-	(829.401)	829.401
6	Finance our manufacturing facility for 2 pole generators ranging from 54MW to 200MW	829.401	54.281	775.120	-

The balance in the IPO proceeds have been in the interim invested in term deposit with Nationalised Bank

Note 1 ** are the amounts completely unutilized as on June 30, 2012

Note 1 *** are the amounts utilized for stated objects as on June 30, 2012,

Note 1 ## are the amounts representing savings from stated objects transferred to 6 above vide note 2 below.

Note 2 In terms of the approval of the shareholders’ at the Annual general meeting held on July 12, 2012, the IPO proceeds relating to following objects of issue may be utilized for objects other than the said objects, including setting up of a new manufacturing facility for manufacture of advanced AC generators-2pole. The company has commenced deployment of the funds accordingly in setting up a manufacturing facility near the current facility and shall report utilization of funds thereof periodically.

UNAUDITED SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED

	PARTICULARS	Standalone
		Quarter ended		Half Year ended
		30.09.2012	30.06.2012	30.09.2012
		(REVIEWED) (Rs.)	(REVIEWED) (Rs.)	(REVIEWED) (Rs.)
1.	Segment Revenue
	a) Manufacturing	567.334	923.409	1490.743
	b) Project Business	449.338	412.766	862.104
	c) Engineering, Procurement and Construction (EPC)	-	-	-
	Total	1016.672	1336.175	2352.847
	Less: Inter Segment Revenue	44.988	254.027	299.016
	Less: Inter Company	-	-	-
	Net Sales / Income from Operations	971.683	1082.148	2053.831
2.	Segment Results (Profit) (+)/(Loss) (-) before tax
	and Interest from each segment
	a) Manufacturing	66.220	183.623	249.843
	a1) Less: Inter Company	6.550	-	-
	b) Project Business	69.590	57.104	126.695
	c) Engineering, Procurement and Construction (EPC)	-	-	-
	Total	129.261	240.727	376.538
	Less: (i) Interest	8.319	8.075	16.394
	(ii) Depreciation	28.480	25.954	544.34
	(iii) Un-allocable income net of un-allocable expenditure	(39.372)	(19.386)	(58.758)
	Total Profit Before Tax	138.384	226.084	364.469
3.	Capital Employed (Segment Assets - Segment Liabilities)
	a) Manufacturing	2580.590	2500.479	2580.590
	b) Project Business	256.317	358.084	256.317
	c) Engineering, Procurement and Construction (EPC)	-	-	-
	d) Un-allocable Segment	1739.600	1615.282	1739.600
	Total	4576.508	4473.845	4576.508

Note:- In Accordance with AS 17 - "Segment reporting". The Company on Standalone basis has two reportable segments i.e. Manufacturing and Projects business. However, the consolidated segment reporting contains one more reportable segment relating to the Engineering, Procurement and Construction (EPC) of power plants undertaken by our wholly owned subsidiary DF Power Systems Private Limited.

STANDALONE STATEMENT OF ASSETS AND LIABALITIES

		Standalone
	Particulars	30.09.2012
A	EQUITY AND LIABILITIES
	Shareholders' funds
1.	(a) Share Capital	332.376
	(b) Reserves and surplus	4244.132
	Sub-total-Shareholders' funds	4576.508
2.	Share application money pending allotment
3.	Minority interest
4.	* Non-current liabilities
	(a) Long-term borrowings	0.000
	(b) Deferred tax liabilities (net)	107.566
	(c) Other long-term liabilities	0.000
	(d) Long-term provisions	30.764
	Sub-total-Non-current liabilities	138.330
5.	Current liabilities
	(a) Short-term borrowings	286.836
	(b) Trade Payables	724.929
	(c) Other current liabilities	952.976
	(d) Short-term provisions	29.860
	Sub-total-Current liabilities	1994.601
	TOTAL-EQUITY AND LIABILITIES	6709.439
B	ASSETS
	Non-current assets
1.	(a) Fixed assets	1691.334
	(b) Goodwill on consolidation*	0.000
	(c) Non-current investments	204.125
	(d) Deferred tax assets (net)	0.000
	(e) Long-term loans and advances	426.926
	(f) Other non-current assets	0.000
	Sub-total-Non-current assets	2322.385
2	Current assets
	(a) Current investments	0.000
	(b) Inventories	735.670
	(c) Trade receivables	1071.533
	(d) Cash and cash equivalents	2057.718
	(e) Short-term loans and advances	504.133
	(f) Other current assets	0.000
	Sub-total-Current assets	4369.054
	TOTAL -ASSETS	6709.439
	* Applicable in the case of consolidated statement of assets and liabilities

AS PER WEBSITE DETAILS

COMPANY PROFILE

They are one of the leading manufacturers of AC Generators in the world with output capacity in the range of 1 MW to 200 MW for prime movers, such as steam turbines, hydro turbines, diesel engines, wind turbines, gas engines and gas turbines. They also manufacture special application generators, high voltage motors and generators for Geo Thermal and Solar thermal applications. In August 2001, they started manufacturing AC generators up to 30 MW under a license from Toyo Denki, a leading manufacturer of power and electric equipments located in Japan. Their Company currently owns the technology, which was licensed from Toyo Denki, and has further developed in-house capability to manufacture and supply generators up to 40 MW to cater to industry demands and has successfully manufactured and installed several generators in India and abroad. Further, in 2007 and in 2012, their Company entered into license agreements with Siemens to manufacture steam generators from 20 MW to 200 MW, which covers a wider range of products with different rotor designs. 

They focus on manufacturing custom-designed generators for their customers who are based across the world. Their wide portfolio of products gives them a competitive advantage, as they can cater to all the major verticals of the power generation industry. They cater to both conventional and renewable fuel based power plants. They believe that a majority of future power plants will be based on conventional fuels and their Company has the entire range of generators to cater to this sector. With their technological collaborations with the leading power equipment manufacturers they also have the ability to design and manufacture a complete range of generators required to cater to the renewable fuel based segment of the power generation market. Since inception till June 30 2012, they have manufactured 1,811 generators, including 291 generators exported to 40 countries, with aggregate output capacity of 15261 MW. 

In addition to manufacturing AC Generators their Company also executes Turbine Generator ("TG") island projects for steam turbine power plants with output capacity up to 52 MW using Shin Nippon turbines from Japan combined with their generator. The scope of work of the TG island projects consists of design services, procurement and supply of equipment, assembly, installation and commissioning. 

Their Subsidiary Company is in the business of Engineering, Procurement and Construction (EPC) of the boiler-turbine generator (BTG) island and the balance of plant (BOP) portion of steam turbine power plants with outputs from 52 MW up to 150 MW. The scope of work of their EPC Business comprises of design services, procurement and supply of equipments, assembly and installation and commissioning. 

Their Company is ISO 14001: 2004 issued by TUV SUD Management Services GmbH, Munich and Certificate of Compliance issued by CSA International to their Company in relation to component open type synchronous generators being eligible to bear the CSA mark with indicator. 

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 tha 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.55.69
UK Pound	1	Rs.89.20
Euro	1	Rs.72.10

INFORMATION DETAILS

Report Prepared by :

VRN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		57

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.