MIRA INFORM REPORT

Report Date :

27.09.2012

IDENTIFICATION DETAILS

Name :	TECHNOFAB ENGINEERING LIMITED
Registered Office :	507, Eros Apartment, 56 Nehru Place, New Delhi-110019, Delhi
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	20.07.1971
Com. Reg. No.:	55-5712
Capital Investment / Paid-up Capital :	Rs.104.900 Millions
CIN No.: [Company Identification No.]	U74210DL1971PLC005712
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Company is Engaged in the Business of Providing Engineering Procurement and Construction Services, Executing a Wide Range of Balance-of-plant and Electro-mechanical Projects on a Complete Turnkey Basis.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (58)

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

Maximum Credit Limit :	USD 6923464
Status :	Good
Payment Behaviour :	Regular
Litigation :	Exist
Comments :	Subject is a well established company having good track. The company has recorded a better growth in its revenue earned and profits during 2012. Financial position of the company appears to be good. 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 – 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	CRISIL
Rating	A (Long Term)
Rating Explanation	Adequate degree of safety and low credit risk
Rating	A2+ (Short term)
Rating Explanation	Strong degree of safety and low credit risk
Date	18.04.2012

RBI DEFAILTERS’ LIST STATUS

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

EPF (Employee Provident Fund) DEFAILTERS’ 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 :	507, Eros Apartment, 56 Nehru Place, New Delhi-110019, Delhi, India
Tel. No.:	91-11-26415961
Fax No.:	91-11-26221521
E-Mail :	info@technofabengineering.com ipo@technofabengineering.com
Website :	http://www.technofabengineering.com
Corporate Office :	Plot 5, Sector 27-C, Mathura Road, Faridabad-121003, Haryana, India
Tel. No.:	91-129-2270202
Fax No.:	91-129-2270201
Overseas Office :	Located at: Ghana Ethiopia Kenya

DIRECTORS

AS ON 31.03.2012

Name :	Mr. Avinash Chander Gupta
Designation :	Chairman and Managing Director
Address :	S-481, GK-II, New Delhi-110048, Delhi, India
Date of Birth/Age :	26.10.1940
Date of Appointment :	06.10.2002
Name :	Mr. Arjun Gupta
Designation :	Whole Time Director
Address :	S-481, GK-II, New Delhi-110048, Delhi, India
Date of Birth/Age :	07.08.1970
Date of Appointment :	30.09.2004
Name :	Mr. Nakul Gupta
Designation :	Whole Time Director
Address :	S-481, GK-II, New Delhi-110048, Delhi, India
Date of Birth/Age :	30.08.1971
Date of Appointment :	01.12.1999
Name :	Mr. Pawan Chopra
Designation :	Director
Address :	C-1/39, Pandara Park, New Delhi-110003, Delhi, India
Date of Birth/Age :	22.05.1944
Date of Appointment :	08.06.2009
Name :	Mr. Viresh Shankar Mathur
Designation :	Director
Address :	B-70, Sector-14, Noida-201301, Uttar Pradesh, India
Date of Birth/Age :	09.03.1946
Date of Appointment :	08.06.2009
Name :	Mr. Arun Mitter
Designation :	Director
Address :	C-29, May Fair Garden, New Delhi-110016, Maharashtra, India
Date of Birth/Age :	27.11.1962
Date of Appointment :	08.06.2009

KEY EXECUTIVES

Name :	Mrs. Jyoti Singh
Designation :	Secretary and Compliance Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.06.2012

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of promoters and Promoter Group
1. Indian
Individuals / Hindu Undivided Family	4313893	41.12
Bodies Corporate	265941	2.54
(B) Public Shareholding
1. Institutions
Insurance Companies	337475	3.22
Foreign Institutional Investors	1341929	12.79
2. Non Institutions
Bodies Corporate	2600390	24.79
Individual
Individual shareholders holding nominal share capital up to Rs.1 Lakh	939052	8.95
Individual shareholders holding nominal share capital in excess of Rs.1 Lakh	612369	5.84
Any other [specify]
Clearing Members	35707	0.34
NRI	42489	0.41
Trusts	755	0.01
Total	10490000	100.00

BUSINESS DETAILS

Line of Business :

Company is Engaged in the Business of Providing Engineering Procurement and Construction Services, Executing a Wide Range of Balance-of-plant and Electro-mechanical Projects on a Complete Turnkey Basis.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Not Available

Facilities :

Secured Loan	31.03.2012 Rs. In Millions	31.03.2011 Rs. In Millions
From Banks Equipment Loans* Working Capital**	0.191 435.131	0.908 142.640
From Other Parties Equipment Loans*	7.671	14.876
Total	442.993	158.424

Banking Relations :	--
Auditors :
Name :	Rajesh Suresh Jain and Associates Chartered Accountant
Address :	E-3/38, Sector-7, Rohini, New Delhi - 110085, Delhi, India
Tel. No.:	91-11-65819990
Mobile No.:	91-9811020899
Wholly Owned Subsidiaries:	(a) Rivu Infrastructural Developers Private Limited (b) Woodlands Instruments Private Limited (c) Arihant Flour Mills Private Limited
Enterprises under Common Control / enterprises where persons described in “A” above is able to exercise significant influence:	(a) Techfab International Private Limited (b) Techfab Systems Private Limited (c) Bakool Venture Private Limited

CAPITAL STRUCTURE

AS ON 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
15000000	Equity Share	Rs.10/- each	Rs.150.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
10490000	Equity Share	Rs.10/- each	Rs.104.900 Millions

Note :

(i) Reconcilation of the number of shares outstanding at the beginning and at the end of the reporting period.

FINANCIAL DATA

[all figures are in Euro]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		104.900	104.900	75.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1625.966	1308.678	424.771
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1730.866	1413.578	499.771
LOAN FUNDS
1] Secured Loans		442.993	158.424	151.735
2] Unsecured Loans		0.000	0.000	42.348
TOTAL BORROWING		442.993	158.424	194.083
DEFERRED TAX LIABILITIES		7.239	4.974	1.751
TOTAL		2181.098	1576.976	695.605
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		169.624	113.343	54.812
Capital work-in-progress		3.790	0.000	0.000
NON CURRENT INVESTMENT		101.345	30.145	0.000
INVESTMENT		377.416	348.091	3.501
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	115.106	133.000	34.502
	Sundry Debtors	1558.321	1292.401	563.557
	Cash & Bank Balances	679.136	719.935	110.202
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	478.012	334.997	412.263
Total Current Assets		2830.575	2480.333	1120.524
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	851.039	926.344	222.387
	Other Current Liabilities	267.236	322.836	144.172
	Provisions	183.377	145.756	116.673
Total Current Liabilities		1301.652	1394.936	483.232
Net Current Assets		1528.923	1085.397	637.292
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		2181.098	1576.976	695.605

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	3773.316	2900.786	2003.702
		Other Income	43.332	13.131	1.119
		TOTAL (A)	3816.648	2913.917	2004.821
Less	EXPENSES
		Cost of Materials Consumed	2702.405	2189.161	0.000
		Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	18.574	(115.893)	0.000
		Expenditure on Contracts	221.360	153.530	1540.325
		Employee Benefit Expense	236.666	167.013	0.000
		Others	85.762	89.797	126.823
		TOTAL (B)	3264.767	2483.608	1667.148
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		551.881	430.309	337.673
Less	FINANCIAL EXPENSES (D)		37.125	33.385	31.663
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		514.756	396.924	30.601
Less/ Add	DEPRECIATION/ AMORTISATION (F)		21.149	11.580	13.529
	PROFIT BEFORE TAX (E-F) (G)		493.607	385.344	292.481
Less	TAX (I)		151.935	125.092	101.580
	PROFIT AFTER TAX (G-I) (J)		341.672	260.252	190.901
	Earnings Per Share		32.57	26.98	25.45

QUARTERLY RESULTS

PARTICULARS	30.06.2012
Type	1^st Quarter
Sales Turnover	723.70
Total Expenditure	625.67
PBIDT (Excl OI)	98.03
Other Income	4.62
Operating Profit	102.65
Interest	10.76
Exceptional Items	--
PBDT	91.89
Depreciation	5.40
Profit Before Tax	86.48
Tax	28.39
Reported PAT	58.09
Extraordinary Items	--
Prior Period Expenses	--
Other Adjustments	--
Net Profit	58.09

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	8.95	8.93	9.52
Net Profit Margin (PBT/Sales)	(%)	13.08	13.28	14.59
Return on Total Assets (PBT/Total Assets}	(%)	16.45	14.86	24.88
Return on Investment (ROI) (PBT/Networth)		0.29	0.27	0.59
Debt Equity Ratio (Total Liability/Networth)		1.01	1.10	1.36
Current Ratio (Current Asset/Current Liability)		2.17	1.78	2.32

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	No
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	No
24]	Banking facility details	Yes
25]	Conduct of the banking account	----------------------
26]	Buyer visit details	No
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

CONTINGENT LIABILITY

a. Claims against the Company not acknowledged as debt (net) amount to Rs.1.491 Millions (Previous year Rs.1.491 Millions).

b. The Bank guarantees/letters of credit/Bill discounted given by the Banks for and on behalf of the Company outstanding at the end of the year amounted to Rs.2796.327 Millions (Previous year Rs.2675.500 Millions).

c. In respect of demand against Sales Tax amounting to Rs.1.355 Millions (Previous year Rs.1.355 Millions) raised by the authorities, appeals are pending before the authorities.

d. In respect of demand against Income Tax amounting to Rs.2.602 Millions (Previous year Rs. NIL) raised by the authorities for Assessment Year 2004-05, appeals are pending before the authorities. e. In respect of demand against Income Tax amounting to Rs.0.358 Million (Previous year Rs. NIL) raised by the authorities for Assessment Year 2005-06, appeals are pending before the authorities.

f. Capital commitment (Net of advances) Rs.20.410 Millions (Previous year Rs.13.500 Millions).

REVIEW OF OPERATIONS

Financial Highlights

The financial year 2011-12 has seen the Company build upon the momentum that it had created since 20052006. The company achieved a gross operating turnover of Rs.3773.32 Million for the year ended 31 st March, 2012 as against " 2900.78 Million for the previous financial year registering an incremental turnover of Rs. 832.53 Million and recording a growth rate of 28.7% over the previous year. The EBIDTAat" 551.88 Million increased by 22% in comparision to the previous year. This rate of gross profit compares well with those of peers in the sector in which the Company operates. The profit after tax in the period under review increased by 31 % to" 341.67 Million as compared to" 260.25 Million in the previous year.

The net worth of the Company, which has been steadily increasing, stands at over" 1730 million as on 31stMarch,2012.

Sectoral Overview

The Company's capabilities to undertake turnkey EPC Services has been deployed across diverse sectors. Whereas over 90% of the Company's business traditionally accrued from the Power Sector, in recent years the Company has been successful in diversifying across other sectors. As a result the relative contribution of various sectors has seen a continuous churning. Whereas in the previous year, the Industrial sector had the highest contribution to the turnover (49%), the thermal power sector has, during the year, regained its position as the highest contributor to the Company's turnover, with the sector contributing around 33% of the total turnover. This was followed by the Industrial and the Oil and Gas Sectors. The Water and Waste Water infrastructure/treatment sector contributed about the same as in the previous year and is expected to significantly increase its contribution during 2012-2013.

Major customers during the year included HINDALCO, Fuel Trade, Ghana, National Thermal Power Corporation, Lanco and Wonji Showa sugar factory in Ethiopia.

Geographical Spread

The Company has strongly strived to secure and execute business in overseas markets particularly in Africa. During the year the Company continued to execute business secured in Ethiopia, Kenya, Fiji and Ghana. The geographical spread was further increased to cover Malawi, Mozambique and Bangladesh. Around one third of the Company's revenue came from overseas assignments.

Overseas Branch Offices

The company continued to operate overseas branch offices in Fiji, Ethiopia and Kenya with the permission of RBI to cater to the needs of overseas projects.

Fresh Business Secured

The company continued to put great emphasis on securing new business from existing as well as new customers and new geographies. As a result of sustained marketing efforts the Company secured new business aggregating over" 7500 Million, of which a substantial portion was from overseas. The quantum of fresh business secured during the year represents a 65% increase over the previous year. The largest share of orders were received from the Water sector followed by the Thermal Powersector.

At present the Company has outstanding proposals worth over" 40 billion. Several involve integrated BoP scope (as distinct from smaller individual BoP packages) where individual order sizes are much larger. The single largest outstanding bid is of the order of" 5 billion.

ECONOMIC AND BUSINESS OUTLOOK

The previous year had seen a return of confidence as the effects of the international financial crisis began to wear out and global recovery commenced. This confidence has proved to be short lived. In the first half of the year itself, clear indications of growth slippages had become evident and, as the year progressed the outlook has turned distinctly gloomy. Not only has there been a continuous downwards trend in India's rate of economic growth, the short and medium term scenario in their country is not at all encouraging. Even though their countries developmental needs in the power, urban development and related infrastructure sectors, which directly concern them, are immense and there is no dearth of viable projects, several factors which are not in the control of project developers have resulted in many of these projects coming to a virtual standstill. The macro scenario is adversely impacted by many factors. The obvious contradiction between the requirements to control inflation on the one hand and loosening of monetary policy to spur resumption of a higher growth trajectory, is just one of the many significant issues that their country faces. The uncertainties on coal mining, increased difficulties in obtaining environmental clearances and land acquisition for power and industrial projects continues to have an adverse effect. Perhaps most importantly, the continuous high fiscal and balance of payments deficits have caused a severe denting of confidence apart from the steady erosion in the value of the rupee. A slowdown in enquiries and longer than normal gestation in converting enquiries to orders and orders to revenue is visible. While the Company's decent order book will hold them i n good stead, we cannot but help being concerned on the future .The Company's proven ability to target multiple sectors and geographies will hopefully help it tide overthese concerns.

The overseas markets continue to present a reasonably good promise and we have further increased their marketing efforts by going into new countries in Africa and closer home in Bangladesh. We are largely focused on developing countries where the basic demand on infrastructure and urban development remains very strong. To a great extent the projects the Company aims at, are not profit oriented or privately financed, being more likely to be the subject of developmental finance, whether governmental or from multilateral development banks/bodies, hence these are not so strongly impacted by market related issues.

Both domestically and in the overseas markets there are strong signs of increased competition which in turn has the potential of affecting margins.

While we are confident that the strategic initiatives undertaken by the Company will greatly help them cope with the present gloomy scene, the Company believes it will be realistic to prune growth expectations which may now be in the 20-25% range and to be ready to face a slight dip in margins due to pressures of competition in a slowing market.

STRATEGIC INITIATIVES

Being in the Service sector, the Company's success has been founded on Customer satisfaction. Achieving Customer Satisfaction through Excellence in Project Management has been and will continue to remain the cornerstone of the Company's business philosophy. In recent years this has been accompanied by a strong initiative to diversify the market, both in terms of newer sectors and newer geographies. Initiatives aimed at enhancing business and improving their internal environment and processes are an ongoing feature. Briefly these include:

Focus on Improving Efficiency

Since inception the company has largely adhered to the mantra “Keep it Simple”. Notwithstanding the inherent complexities of their business and the environment in which we operate, we continue to have faith in and abide by this mantra. It is important however to make full use of the opportunities available by advances in IT to efficiently cope with the growth pangs that are an integral accompaniment to the rapid increase in their business volume. To this end the Company has greatly enhanced its in house IT capability and is well on the way to set up and utilize ERP systems.

Focus on HR

During the year employee strength crossed the 350 mark. The biggest challenges the Company faces are on the manpower front, in terms of attracting, retaining and providing appropriate training to its employees. The Company has been able to strengthen the entire gamut of HR functions from recruitment through training, performance related rewards, employee welfare, and enhancing overall employee satisfaction.

The Company has always prided itself on its relatively high employee retention which in turn is largely on account of the informal, achievement oriented, merit and loyalty rewarding work atmosphere that the Company provides.

The Company continues to retain a lean, non hierarchical structure with an effective but simple, no frills office culture.

Marketing Initiatives

The Company's recent rapid growth has been built around its core competence of providing turnkey electro mechanical EPC services. All recent diversification has been achieved around this core competence and no unrelated diversification is planned unless there is a strong strategic fit. The Company is able to serve virtually all infrastructure and industrial sectors and it is no longer dependent on the thermal power sector as was the case a few years ago. Simultaneously the Company has targeted the overseas market and as the result of the success of these endeavours, the Company has been able to grow in a profitable manner. Not only does this protect the Company from slowdowns in any particular sector, it also results in the Company's revenue mix and major customers changing from yearto year.

The Company intends to continue with this market diversification strategy. In fact the recent deterioration in the overall economic scene has made it imperative for them to redouble their marketing efforts as the strike rate is expected to go down.

Simultaneously the Company has been gravitating toward higher value jobs which is essential to sustain growth. This has made pre qualification issues ever more important and the Company is addressing this issue through suitable tie ups and partnerships.

The Company has created new specialized groups to secure jobs in specialized sectors like Water and Waste Water treatment/infrastructure and Oil and Gas apart from the previously established group for Electrical Distribution and Rural Electrification.

As before, the Company continues to look at the consolidated Mechanical, Electrical and Public Health services (MEP) Sector which is expected to provide opportunities sometimes in the near future.

Quality Upgradation

The Company secured ISO 9001 accredition in 2007. This was a first milestone towards continuous quality enhancement. The company is totally committed to a continuous ongoing initiative in this direction. Internal audits are carried out regularly. Recently their external auditors have conducted a rigorous audit and recertified their ISO 9001 accredition.

MANAGEMENT DISCUSSION AND ANALYSIS

BUSINESSOVERVIEW

The Company, incorporated in the year 1971, provides EPC services on a complete turnkey basis across a number of industrial and infrastructure sectors. Over the years the Company has slowly and steadily forged ahead towards its vision of being a world class, globally versatile, medium sized EPC service provider, creating value for customers and stakeholders through excellence in Project Management.

In the last five years the Company has been able to achieve an average compound annual growth in turnover of over 45%. This growth has been accompanied by a healthy growth in profit.

This impressive growth has been achieved by a well planned business strategy, at the heart of which has been the Company's successful endeavour to diversify its customer base beyond the traditional domestic thermal power sector market. The Company now serves multiple sectors and geographies. This diversity is clearly evidenced by the following table showing sector wise contribution to the overall revenue in the last 5 years, as a percentage of total revenue.

Segment	FY 2012	FY 2011	FY2010	FY2009	FY2008
Conventional	32.9	19.8	25	22	37
Power
Nuclear Power	4.1	9.9	27	18	0
Oil and Gas	22.5	3.7	1	13	55
Water and Waste Water Treatment	11.8	11.7	20	35	1
Industrial and Infrastructure Sectors	27.4	49.2	19	12	7
Electrical Distribution and Rural Electrification	1.3	5.6	8	0	0

Similarly their foreign turnover has been continuously varying as seen below

Year	%age revenue from overseas
2011-2012	34
2010-2011	21
2009-2010	10
2008-2009	39
2007-2008	55
2006-2007	0

This diversity and consequent growth has been achieved whilst remaining focussed on their core competence of turnkey project execution. The Company has neither pursued nor plans to pursue any unrelated diversification beyond its core competence, unless there are compelling attractions for the same

ORDERBOOK

The Company received fresh orders aggregating around Rs 7500.000 Millions during the course of the year of which over a third was from overseas. This has been the largest ever aggregate orders secured in a single year. The order book of the Company as on 31st march 2012 stands at around 95000 lakhs. The sectorwise break up is as follows:

No.
	Segment	% Contribution
1.	Conventional Power	38.6
2.	Nuclear Power	2.7
3.	Water and Waste Water Treatment	28.4
4.	Electrical Distribution and Rural Electrification	2.1
5.	Industrial and Infrastructure Sectors	16.0
6.	Oil and Gas	12.2

Over a third of the order book is on account of foreign orders.

BUSINESS ENVIRONMENT AND OUTLOOK

One year ago the Company was cautiously optimistic. The optimism came from the opportunities provided in the domestic market on account of economic growth in general and spending on infrastructure sectors relevant to them in particular. The caution arose due to the incomplete global recovery from the crisis of 2008 and the various early warnings visible from the dark clouds on the domestic economic scene.

Today the optimism has considerably dimmed as the dark clouds that were already visible a year ago have had a pronounced negative impact. Their country's over 8% rate of growth has turned into a mirage. The problems besetting virtually all the sectors where their customers operate; in particular the thermal and nuclear power sectors and the industrial sector are well known and don't need repetition here.

What is of prime importance to their stakeholders is how well we are able to cope with these adverse conditions. While we do hope and pray that these conditions are like a passing storm that will blow over, we cannot be dependent on just their prayers. It is in coping with these conditions that their mettle will be tested to the full. The various business and strategic initiatives we have taken in recent years and which are dwelt upon in the Directors Report will, we are confident, help them cope. The record orders secured last year when the adverse conditions had clearly manifested themselves is the result of their efforts over the last few years to diversify their market beyond the traditional domestic thermal powersector. Their ongoing initiatives, particularly in the areas of computerisation and HR are expected to help them remain lean and control costs

As was mentioned last year, the water sector has the greatest long term potential due to pressure on scarce resources which can only be overcome by heavy investments in treatment, recycling and water infrastructure. Though the water sector has provided them some good business during the year, we continue to face problems in the water and waste water treatment sector due to qualification issues. Their strategy of having tie ups yielded its first success when the Company secured a prestigious order for a Demineralised Water Plant of fairly large capacity. The sector as a whole however continues to face financial hurdles arising out of structural factors. In particular their county's inability to price water at economical levels restricts project opportunities to industrial and JNURM funded projects at present.

Internationally, while we continue to see good opportunities particularly in Africa and South Asia, we see increased competitive pressures. We have developed a strong dedicated marketing team for International business, and have identified a few countries where we are focussing. Indian government's recent enhanced focus on Africa in terms of economic cooperation is an encouraging factor. Apart from Multilateral Agency funded projects we are identifying projects being funded by Indian government and Exim Bank for pursuing business opportunities. Their efforts have yielded satisfactory results during the year.

FIXED ASSETS

· Factory

· Plant and machinery

· Furniture and Fixtures

· Office Equipment

· Vehicles

· Computers

· Generator

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 tht 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.53.58
UK Pound	1	Rs.86.60
Euro	1	Rs.68.94

INFORMATION DETAILS

Report Prepared by :

SDA

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		58

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.