MIRA INFORM REPORT

Report Date :

18.10.2013

IDENTIFICATION DETAILS

Name :	KIRLOSKAR EBARA PUMPS LIMITED
Registered Office :	Pride Kumar Senate Building, Senapati Bapat Road, Pune-411016, Maharashtra
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	13.01.1988
Com. Reg. No.:	11-045865
Capital Investment / Paid-up Capital :	Rs. 5.000 Millions
CIN No.: [Company Identification No.]	U29120MH1988PLC045865
TAN No.: [Tax Deduction & Collection Account No.]	PNEK05175C
PAN No.: [Permanent Account No.]	AAACK7293A
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Manufacturer and Exporter of Industrial Pumps and Turbines
No. of Employees :	250 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

Ba (53)

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

Maximum Credit Limit :	USD 4200000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a joint venture between Kirloskar Brother Limited, India and Ebara Corporation Japan two renowned business houses. It is an established company having good track record. Company has incurred losses from its operation in 2013. However, net worth of the company appears to be good. Overall financial position of the company is decent. Trade relations are reported to be fair. Business is active. Payment terms are reported to be regular. The company can be considered 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.

INDIAN ECONOMIC OVERVIEW

We are living in a world where volatility and uncertainty have become the New Normal. We saw a change of government in countries like Tunisia, Egypt, Libya and Vietnam. Once powerful countries in Europe are now fighting for bankruptcy. We have taken growth in the developing part of the world for granted but economic growth in China and India has begun to slow. Companies that were synonymous with their product categories just a few years ago are now no longer in existence. Kodak, the inventor of the digital camera had to wind up its operations, HMV, the British entertainment retailing company and Borders, once the second largest bookstore have shut down due to their inability to evolve their business models with the changing time. Readers’ Digest, Thomson Register are no more !

There is another megatrend happening. The World order is changing as economic power shifts from West to East. According to McKinsey study, it took Britain more than 100 years to double its economic output per person during its industrial revolution and the US later took more than 50 years to do the same. More than a century later, China and India have doubled their GDP per capital in 12 and 18 years respectively. By 2020, emerging Asia will become the world’s largest consuming block, overtaking North America.

The years after the outbreak of the global financial crisis, the world economy continues to remain fragile. The Indian economy demonstrated remarkable resilience in the initial years of the contagion but finally lost ground last year. GDP growth slowed down. Currency has been weakening. There is a marked deceleration in agriculture, industry and services. Dampening sentiment led to a cut-back in investment as well as private consumption expenditure.  Inflation remained at high levels fuelled by the pressure from the food and fuel sectors. The large fiscal and current account deficit s continued to cause grave concern. It is imperative that India regains its growth trajectory of 8-9 % sooner than later. This is crucially important given the need to create gainful livelihood opportunities for the millions living in poverty as also the large contingent of young people joining the job market every year.

EXTERNAL AGENCY RATING

Rating Agency Name	CRISIL
Rating	A (Long Term Rating)
Rating Explanation	Adequate credit quality and average credit risk.
Date	11.12.2012

Rating Agency Name	CRISIL
Rating	A1 (Short Term Rating)
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	11.12.2012

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.

INFORMATION PARTED BY

Name :	Mr. Ajit
Designation :	Accounts Manager
Contact No.:	91-20-25600100
Date :	17.10.2013

LOCATIONS

Registered Office :	Pride Kumar Senate Building, Senapati Bapat Road, Pune-411016, Maharashtra, India
Tel. No.:	91-20-25600100
Fax No.:	91-20-25600351
E-Mail :	kepl@kirloskarebara.co.in ajit.sumant@kirloskarebara.co.in
Website :	http://www.kirloskarapps.kirloskar.com http://www.kirloskarebara.co.in
Location :	Owned
Factory :	Savantpur Vasahat, P.O. Kirloskarwadi, District Sangli-416308, Maharashtra, India
Tel. No.:	91-2346-222167/ 222371
Fax No.:	91-2346-222372

DIRECTORS

As on: 16.07.2012

Name :	Mr. Sanjay Chandrakant Kirloskar
Designation :	Director
Address :	33, Suyojana Co-operative Housing Society, Scheme No. 2, Koregaon Park, Pune-411001, Maharashtra, India
Date of Birth/Age :	22.03.1957
Date of Appointment :	24.08.2004
DIN No.:	00007885
PAN No.:	ABIPK5775F
Name :	Mr. Toichi Kingoro Meda
Designation :	Director
Address :	4-5-25, Kugahara, Ohta-KU, Tokyo, Japan
Date of Birth/Age :	24.12.1955
Date of Appointment :	19.07.2003
DIN No.:	01443689
Name :	Ms. Aseem Krishanmohan Srivastav
Designation :	Managing Director
Address :	IPF 16/2, Shalimar Township, a B Road, Indore-452010, Madhya Pradesh, India
Date of Birth/Age :	07.10.1967
Date of Appointment :	19.04.2012
DIN No.:	03178279
Name :	Mr. Atsuo Oi
Designation :	Director Apposited in Casual Vacancy
Address :	2-17-1-609, Tamagawa, Ota-Ku,Tokyo, Japan
Date of Birth/Age :	20.02.1957
Date of Appointment :	15.03.2012
DIN No.:	05224778

KEY EXECUTIVES

Name :	Mr. Ajit
Designation :	Accounts Manager

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on: 16.07.2012

NOTE: SHAREHOLDING DETAILS FILE ATTACHED

Equity Share Break up (Percentage of Total Equity)

As on: 16.07.2012

Category	Percentage
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	45.00
Bodies corporate	46.73
Directors or relatives of Directors	5.20
Other top fifty shareholders	3.07
Total	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Exporter of Industrial Pumps and Turbines

Products :

Product Description	ITC Code
Single and Multistag Chemical and Process Pumps	84137091
Turbine for Marine Propulson	84061000

Exports :

Products :

Finished Goods

Countries :

· Germany

· Korea

· Hubly

Imports :

Products :

Raw Material

Countries :

· Japan

· Korea

Terms :

Selling :

Cash and Credit

Purchasing :

Cash and Credit

GENERAL INFORMATION

Suppliers :

· Enpro Industries Private Limited

Customers :

Wholesalers and Retailers

· HPCL

· BPCL

· IOCL

No. of Employees :

250 (Approximately)

Bankers :

· State Bank of India, Industrial Finance Branch, 2^nd Floor, Tara Chambers, Near Mariaai Police Chowky, Pune Mumbai Old Highway, Wakdewadi, Pune-411003, Maharashtra, India

· Yes Bank Limited, Nehru Centre, 9^th Floor, Discovery of India, Dr. A. B. Road, Worli, Mumbai-400018, Maharashtra, India

Facilities :

(Rs. In Millions)

Secured Loan	As on 31.03.2013	As on 31.03.2012
LONG TERM BORROWINGS
Deferred sales tax loan	9.603	12.493
SHORT TERM BORROWINGS
Term loans from banks	34.427	67.241
Working capital loans from banks	0.000	13.655
Total	44.030	93.389

Banking Relations :	--
Auditors :
Name :	S S P A and Associates Chartered Accountants
Address :	1st Floor, Arjun
PAN No.:	AABCM9351Q
Associate:	· Elliott Company · Ebara Engineering Singapore Pte. Limited · Elliott Ebara Singapore Pte. Limited · Kirloskar Corrocoat Private Limited · Kirloskar Brothers(Thailand) Limited · Ebara Pumps Malaysia SDN BHD. · SPP Pumps INC. · The Kolhapur Steel Limited
Other related Parties:	· Kirloskar Brothers Limited CIN No.: L29113PN1920PLC000670 · Ebara Corporation · Prakar Investments Private Limited CIN No.: U65993MH1992PTC064861 · Virtuso Investments Private Limited CIN No.: U65923PN1995PTC091943

CAPITAL STRUCTURE

As on: 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
2000000	Equity Shares	Rs.10/- each	Rs. 20.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
500000	Equity Shares	Rs.10/- each	Rs. 5.000 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	5.000	5.000	5.000
(b) Reserves & Surplus	1059.368	1114.200	1136.500
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	1064.368	1119.200	1141.500
(3) Non-Current Liabilities
(a) long-term borrowings	9.603	12.493	14.612
(b) Deferred tax liabilities (Net)	37.549	36.077	36.329
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	16.794	14.668	12.626
Total Non-current Liabilities (3)	63.946	63.238	63.567
(4) Current Liabilities
(a) Short term borrowings	34.427	80.896	118.792
(b) Trade payables	104.767	338.403	254.032
(c) Other current liabilities	69.223	145.271	138.354
(d) Short-term provisions	73.623	101.344	63.862
Total Current Liabilities (4)	282.040	665.914	575.040
TOTAL	1410.354	1848.352	1780.107
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	491.307	524.859	565.765
(ii) Intangible Assets	41.629	33.446	5.262
(iii) Capital work-in-progress	0.000	0.000	0.000
(iv) Intangible assets under development	0.000	0.000	0.000
(b) Non-current Investments	0.000	0.000	0.000
(c) Deferred tax assets (net)	0.000	0.000	0.000
(d) Long-term Loan and Advances	7.018	5.543	13.548
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	539.954	563.848	584.575
(2) Current assets
(a) Current investments	49.998	0.000	90.916
(b) Inventories	227.709	471.286	473.406
(c) Trade receivables	434.850	659.248	461.578
(d) Cash and cash equivalents	63.880	4.601	33.753
(e) Short-term loans and advances	93.961	149.319	135.593
(f) Other current assets	0.002	0.050	0.286
Total Current Assets	870.400	1284.504	1195.532
TOTAL	1410.354	1848.352	1780.107

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Income	1259.399	1892.492	1159.871
		Other Income	18.705	18.384	93.216
		TOTAL (A)	1278.104	1910.876	1253.087
Less	EXPENSES
		Cost of materials consumed	711.426	1378.519	662.757
		Purchases of stock-in-trade	0.000	0.434	31.263
		Changes in inventories of finished goods, work-in-progress and stock-in-trade	125.853	(57.610)	(82.991)
		Employee benefit expense	165.408	136.911	103.888
		Other expenses	248.389	360.595	239.021
		TOTAL (B)	1251.076	1818.849	953.938
Less	PROFIT/ (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		27.028	92.027	299.149
Less	FINANCIAL EXPENSES (D)		5.365	17.495	1.804
	PROFIT/ (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		21.663	74.532	297.345
Less/ Add	DEPRECIATION/ AMORTISATION (F)		71.188	64.028	39.441
	PROFIT/ (LOSS) BEFORE TAX (E-F) (G)		(49.525)	10.504	257.904
Less	TAX (H)		5.307	3.748	85.143
	PROFIT/ (LOSS) AFTER TAX (G-H) (I)		(54.832)	6.756	172.761
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		29.129	52.428	58.723
Less	APPROPRIATIONS
		Transfer to General Reserve	0.000	1.000	150.000
		Dividend	0.000	25.000	25.000
		Tax on Dividend	0.000	4.055	4.056
	BALANCE CARRIED TO THE B/S		(25.703)	29.129	52.428
	Earnings/ (Loss) Per Share (Rs.)		(110.00)	14.00	346.00

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	(4.29)	0.35	13.79
Net Profit Margin (PBT/Sales)	(%)	(3.93)	0.56	22.24
Return on Total Assets (PBT/Total Assets}	(%)	(3.51)	0.57	14.49
Return on Investment (ROI) (PBT/Networth)		(0.05)	0.01	0.23
Debt Equity Ratio (Total Debt /Networth)		0.04	0.08	0.12
Current Ratio (Current Asset/Current Liability)		3.09	1.93	2.08

LOCAL AGENCY FURTHER INFORMATION

DETAILS OF CURRENT MATURITIES OF LONG-TERM DEBT

(Rs. in Millions)

PARTICULARS	31.03.2013	31.03.2012	31.03.2011
Current maturities of long-term debt	2.891	2.118	1.500

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	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	Yes
18]	Major customers	Yes
19]	Payments terms	Yes
20]	Export / Import details (if applicable)	Yes
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
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

OPERATIONS:

During the year, the Company achieved a turnover of Rs. 1278.104 Millions as compared to Rs. 1910.876 Millions in the last financial year.

Company made a loss of Rs.49.525 Millions for the year under review, as against a profit of Rs. 10.504 Millions during the corresponding period of the previous year. This loss is mainly on account of decrease in sale and increase in operating expenses to support growth plans of the Company. Company has taken various measures to control materials and other costs and expects improved performance for the current financial year.

Future Plan of Action :

The basic approach will be to continue development in the existing products and to enlarge the present range of manufacture which includes Multistage Multicase Pumps (BB3 type), Turbogensets for co-gen applications and to minimize imports to reduce costs.

INDEX OF CHARGES

S. No.	Charge ID	Date of Charge Creation/Modification	Charge amount secured	Charge Holder	Address	Service Request Number (SRN)
1	10278511	15/03/2011	90,000,000.00	YES BANK LIMITED	NEHRU CENTRE, 9TH FLOOR, DISCOVERY OF INDIA, DR. A.B. ROAD, WORLI,, MUMBAI, Maharashtra - 400018, INDIA	B09918236
2	80001116	14/01/2013 *	900,000,000.00	State Bank of India Industrial Finance Branch	Tara Chambers,2nd floor,Near Mariaai Police Chowky, Old Pune Mumbai Highway, Wakdewadi, Pune, Maharashtra - 411003, INDIA	B67765024
3	80001117	05/02/2003	360,000,000.00	STATE BANK OF INDIA	COMMERCIAL BRANCH, TILAK ROAD, PUNE, Maharashtra - 400030, INDIA	-
4	80001120	05/02/2003	360,000,000.00	STATE BANK OF INDIA	COMMERCIAL BRANCH, TILAK ROAD, PUNE, Maharashtra - 400030, INDIA	-

* Date of charge modification

TRADE REFERENCES

· Enpro Industries Private Limited

· HPCL

· BPCL

· IOCL

FIXED ASSETS

· Land – freehold

· Building

· Plant and Machinery

· Computers

· Electrical Installation

· Patterns

· Furniture and Fittings

· Vehicles

· Computer Software

· Technical Know how

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 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 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.61.58
UK Pound	1	Rs.98.51
Euro	1	Rs.83.49

INFORMATION DETAILS

Information Gathered by :	PDT
Report Prepared by :	RAJ

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	6
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--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
DEFAULTER
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		53

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.