MIRA INFORM REPORT

Report Date :

07.08.2014

IDENTIFICATION DETAILS

Name :	WEG INDUSTRIES (INDIA) PRIVATE LIMITED
Registered Office :	No. 38, Ground Floor, 1^st Main Road, Lower Palace, Orchards, Bangalore – 560 003, Karnataka
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	10.04.2008
Com. Reg. No.:	08-046020
Capital Investment / Paid-up Capital :	Rs.15.500 Millions
CIN No.: [Company Identification No.]	U31909KA2008PTC046020
TAN No.: [Tax Deduction & Collection Account No.]	BLRW00832G
PAN No.: [Permanent Account No.]	AAACN7745D
Legal Form :	Private Limited Liability Company
Line of Business :	Manufacture, export, import of rotating electrical machinery, mechanical machinery and related devices.
No. of Employees :	500 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (32)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 12000000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track record. Company has incurred loss from its operation in the year 2013. However, trade relations are fair. Business is active. Payment terms are slow but correct. The company can be considered for business dealing with some caution.

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 1, 2014

Country Name	Previous Rating (31.03.2014)	Current Rating (01.06.2014)
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

N E W S

As per the latest IMF study, the total weigh of emerging markets in the GDP of the world on a purchasing power parity basis has seen a sizeable shift. It highlights how as against 51 % in 2005, the emerging economies now account for close to 56 % of the global purchasing power GDP as per the latest survey. And with the emerging economies growing at a faster rate than their developed counterparts, there are every possibility that the their share goes up further in the coming years.  China may surpass the US over the next few years.

Politics and economics are very intricately connected. They tend to influence each other in ways that could be very complex and far-reaching. The prospects of the India’s economy have been seriously compromised due to political corruption. High inflation, poor standard of living are to a great extent a result of rampant corruption in the country. China on the other hand, seems to be facing diametrically opposite challenge. American hedge fund manager Jim Chanos has been keenly following the political and economic development in the dragon economy and has figured out something that is quite worrying. He is of the view that the Chinese economy could be heading toward trouble on account of new Chinese President Xi Jingping’s very aggressive anti-corruption drive. Chanos believes tat many things such as apartment sales, luxury products, etc. were largely bought with dirty money. And it is now beginning to impact consumption. This may indeed be bad news for an economy that is struggling to transition from an investment-driven export-oriented economy to a domestic consumption-driven economy.

A study published by Firstpost has revealed that asset classes like real estate and equities were the biggest beneficiaries of the liberalization policies.  A firm called Ciane Analytics studied returns from assets including equities, gold, fixed deposits, G-Secs and real estate since 1991. Real estate outperformed every other asset classes during the 23-year period with an annualized return of 20 % ! Equities came in second with annualized return of 15.5 % ! However, while these returns may seem mouthwatering, the fact is that the return from equities adjusted for inflation came down to just 7.1 %.

Some brief news are as under

. R-Power to buy Jaypee’s hydro assets

. Investors await justice in NSEL case

. India seeks MFN status from Pakistan ahead of meeting

. Ukrain’s clashes with rebels hinder MH17 crash investigation

. India exploring merger of state-owned hydro PSUs

..Higher costs weigh down profit growth to slowest in 9 quarters

..Wal-Mart to expand wholesale business in India

. GMR group moves to strengthen balance sheet

. Central Bank to sell 4 % stake to Life Insurance Corporation

. Tata Chemicals plans to raise up to Rs 10000 mn.

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 31-03-2014.

INFORMATION PARTED BY (GENERAL DETAILS)

Name :	Mr. Anthony
Designation :	Senior Finance Analyst
Contact No.:	91-4344-301511
Date :	06.08.2014

LOCATIONS

Registered Office :	No. 38, Ground Floor, 1^st Main Road, Lower Palace, Orchards, Bangalore – 560 003, Karnataka, India
Tel. No.:	91-80-41282007/41282006/41282005
Fax No.:	91-80-23367624
E-Mail :	chatto@weg.net info-in@weg.net anthony@weg.net
Website :	www.weg.net
Head Office / Factory:	Plot No E-20, Moranapalli Village, SIPCOT Phase II, Expansion II, Hosur – 635109, Tamilnadu, India
Tel No.:	91-4344-301577

DIRECTORS

As on 25.10.2013

Name :	Mr. Satyajit Chattopadhyay
Designation :	Managing director
Address :	No. 62/2-1, Embassy Heritage Flat – 183, 8^th Main, Malleswaram, Bangalore – 560003, Karnataka, India
Date of Birth/Age :	11.10.1946
Date of Appointment :	10.04.2008
DIN No.:	00057458
Name :	Mr. Sergio Luiz Silva Schwartz
Designation :	Director
Address :	Rua Epitacio Pessoa, 258 Jaragua Do Sul, 89251100
Date of Birth/Age :	21.11.1960
Date of Appointment :	10.04.2008
DIN No.:	00178216
Name :	Eduardo De Nobrega
Designation :	Director
Address :	R Adolfo Sacani, AP 803 Centro Jaragua DU 89253 – 075, Jaragua DU SUL 00036, Brazil
Date of Birth/Age :	26.05.1962
Date of Appointment :	11.07.2011
DIN No.:	03554003
Name :	Sinesio Tenfen
Designation :	Director
Address :	R Alberto Picolli, Agua Verde, 89254 – 460, Jaragua DO SUL 00046, Brazil
Date of Birth/Age :	09.10.1954
Date of Appointment :	11.07.2011
DIN No.:	03554007
Name :	Wilson Jose Watzko
Designation :	Director
Address :	RUA 22- Ney Franco 55, O Jaragua, SUL SC 8925050, Jaragua DO SUL 89256050, Brazil
Date of Birth/Age :	12.07.1958
Date of Appointment :	10.05.2013
DIN No.:	06497766

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 25.10.2013

Names of Shareholders	No. of Shares
Weg Iberia SL, Spain	1549981
Weg Equipamentos Eletricos SA, Brazil	3
Total	1549984

Equity Share Break up (Percentage of Total Equity)

As on 25.10.2013

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	100.00

BUSINESS DETAILS

Line of Business :	Manufacture, export, import of rotating electrical machinery, mechanical machinery and related devices.
Exports :
Products :	Finished Goods
Imports :
Products :	Raw Material
Countries :	Chain Germany
Terms :
Selling :	Cash and Credit, Cheque
Purchasing :	Cash and Credit, Cheque

GENERAL INFORMATION

No. of Employees :	500 (Approximately)
Bankers :	HSBC Bank, M G Road, Bangalore, Karnataka, India

Banking Relations :	--
Auditors :
Name :	S R Batliboi and Company Chartered Accountants
Address :	12th and 13th floor, "UB City" Canberra block, No. 24, Vittal mallya road, Bengaluru – 560001, Karnataka, India
PAN N Income-tax PAN of auditor or auditor's firm :	ACHFS9180N
Fellow Subsidiary company:	· WEG Equipmentos Electricos S.A · WEG Australia Pty Limited · W E G Electric Corporation · WEG Electric Motors UK Limited · Zest Electric Motors Pty Limited · WEG Germany Gmbh · WEG Italia S.R.L · WEG Mexico S.A. · W E G Scandinavia AB · W E G Euro-Industria Electrica S.A. · WEG Electric (India) Private Limited · WEG S A Brazil · WEG Singapore PTE Limited · WEG (Nantong) Electric Moter Manufacturing Company
Holding company:	· WEG Iberia S.L

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
1549984	Equity Shares	Rs.10/- each	Rs. 15.500 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	15.500	14.361	12.734
(b) Reserves & Surplus	3003.164	2956.233	2823.859
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	259.209	44.800
Total Shareholders’ Funds (1) + (2)	3018.664	3229.803	2881.393
(3) Non-Current Liabilities
(a) long-term borrowings	0.000	0.000	0.000
(b) Deferred tax liabilities (Net)	0.000	0.000	0.000
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	7.753	6.995	0.567
Total Non-current Liabilities (3)	7.753	6.995	0.567
(4) Current Liabilities
(a) Short term borrowings	514.598	263.310	106.910
(b) Trade payables	133.647	172.656	164.628
(c) Other current liabilities	170.345	32.178	4.730
(d) Short-term provisions	19.106	6.782	0.000
Total Current Liabilities (4)	837.696	474.926	276.268
TOTAL	3864.113	3711.724	3158.228
II.          ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	2467.261	2605.766	2619.592
(ii) Intangible Assets	4.926	2.851	1.449
(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	32.011
(d) Long-term Loan and Advances	128.876	225.892	235.223
(e) Other Non-current assets	0.000	0.000	0.000
Total Non-Current Assets	2601.063	2834.509	2888.275
(2) Current assets
(a) Current investments	0.000	0.000	0.000
(b) Inventories	794.603	586.157	40.256
(c) Trade receivables	253.752	195.181	113.608
(d) Cash and cash equivalents	1.467	0.801	3.047
(e) Short-term loans and advances	213.228	95.076	113.042
(f) Other current assets	0.000	0.000	0.000
Total Current Assets	1263.050	877.215	269.953
TOTAL	3864.113	3711.724	3158.228

PROFIT & LOSS ACCOUNT

	PARTICULARS	31.03.2013	31.03.2012	31.03.2011
	SALES
	Income	1240.101	640.244	127.506
	Other Income
	TOTAL	1240.101	640.244	127.506
Less	EXPENSES
	Cost of Materials Consumed
	Purchases of Stock-in-Trade
	Changes in inventories of finished goods, work-in-progress and Stock-in-Trade	1289.949	683.619	175.018
	Employees benefits expense
	Other expenses
	TOTAL	1289.949	683.619	175.018
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION	(49.848)	(43.375)	(47.512)
Less/ Add	DEPRECIATION/ AMORTISATION	161.288	123.238	22.521
	PROFIT/ (LOSS) BEFORE TAX	(211.136)	(166.613)	(70.033)
Less	TAX	0.000	69.436	(32.011)
	PROFIT/ (LOSS) AFTER TAX	(211.136)	(236.049)	(38.022)
	EARNINGS IN FOREIGN CURRENCY
	F.O.B. Value of Exports	NA	410.853	0.000
	Service Income	NA	2.286	0.000
	TOTAL EARNINGS	NA	413.139	0.000
	IMPORTS
	Raw Materials	NA	201.752	39.834
	Capital Goods	NA	7.707	776.151
	TOTAL IMPORTS	NA	209.459	815.985
	Earnings / (Loss) Per Share (Rs.)	(136.22)	NA	NA

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	(17.03)	(36.87)	(29.82)
Net Profit Margin (PBT/Sales)	(%)	(17.03)	(26.02)	(54.93)
Return on Total Assets (PBT/Total Assets}	(%)	(5.46)	(4.49)	(2.24)
Return on Investment (ROI) (PBT/Networth)		(0.07)	(0.05)	(0.02)
Debt Equity Ratio (Total Debt /Networth)		0.17	0.08	0.04
Current Ratio (Current Asset/Current Liability)		1.51	1.85	0.98

FINANCIAL ANALYSIS

[all figures are in Rupees Millions]

DEBT EQUITY RATIO

Particular	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Share Capital	12.734	14.361	15.500
Reserves & Surplus	2823.859	2956.233	3003.164
Share Application money pending allotment	0.000	259.209	44.800
Net worth	2836.593	3229.803	3063.464
long-term borrowings	0.000	0.000	0.000
Short term borrowings	106.910	263.310	514.598
Total borrowings	106.910	263.310	514.598
Debt/Equity ratio	0.038	0.082	0.168

YEAR-ON-YEAR GROWTH

Year on Year Growth	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	127.506	640.244	1240.101
		402.129	93.692

NET PROFIT MARGIN

Net Profit Margin	31.03.2011	31.03.2012	31.03.2013
	(Rs. In Millions)	(Rs. In Millions)	(Rs. In Millions)
Sales	127.506	640.244	1240.101
Profit	(38.022)	(236.049)	(211.136)
	(29.82%)	(36.87%)	(17.03%)

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	Yes
9]	Name of person contacted	Yes
10]	Designation of contact person	Yes
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	--
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	Yes
20]	Export / Import details (if applicable)	Yes
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
23]	Banking Details	Yes
24]	Banking facility details	No
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	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	No

INDEX OF CHARGES: NO CHARGES EXIST FOR COMPANY

BUSINESS:

The company is engaged in the manufacture of motors during the current financial year and wherever opportunities are available it will undertake manufacture of other rotating electrical machinery of different types, models, designs, mechanical machinery, equipment, devices and tools, electric, electronic and electro-mechanical machinery, equipment and integrated systems, components and devices, machinery and equipment for the conservation, production, generation, transmission and distribution of electric power, electromechanical and electronic components to control, command, protect and signal electric circuits and wiring for the purpose of extending timely after sales service and technical support services to store components and parts of various types of motors and generators.

CORPORATE INFORMATION

Subject was incorporated on April 10, 2008. The Company is in the business of manufacture, export, import of rotating electrical machinery, mechanical machinery and related devices. The Company commenced commercial production from January 2011.

UNSECURED LOAN

PARTICULARS	31.03.2013 (Rs. in Millions)	31.03.2012 (Rs. in Millions)
Short-term borrowings
Working capital loans from banks	514.598	263.310
Total	514.598	263.310

FIXED ASSETS

Tangible assets

· Land

· Buildings

· Plant and equipment

· Furniture and fixtures

· Vehicles

· Office equipment

· Computer equipments

Intangible assets

· Computer software

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.60.34
UK Pound	1	Rs.103.44
Euro	1	Rs.81.96

INFORMATION DETAILS

Information Gathered by :	HTL
Analysis Done by :	SUM
Report Prepared by :	KVT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	4
--CREDIT LINES	1~10	4
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--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		32

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.