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GEI POWER LIMITED Ratings Assigned Facilities Amount (Rs. crore) Ratings Remarks Long-term Bank Facilities 45.

60 CARE A- (SO) [Single A Minus (Structured Obligation)] Assigned Short-term Bank Facilities 28.40 PR2+ (SO) [PR Two Plus (Structured Obligation)] Assigned Total Facilities @ 74.00 @ backed by the corporate guarantee extended by GEI Industrial Systems Ltd (GEI; rated CARE A- and PR2+ ). Rating Rationale The ratings take into account the unconditional and irrevocable corporate guaran tee extended for the bank facilities of GEI Power Ltd (GEIPL) by its holding company, GEI Industrial Systems Ltd (GEI; rated CARE A - and PR2+ ). The ratings of GEI take into account the company s established position in the air -cooled heat transfer business, its modest financial risk profile, reputed customer base and stable demand outlook for its end-user industry. The ratings are however, constrained by GEI s operations in a working capital intensive industry, limited p roduct diversification and project implementation and post-implementation risk undertaken in GEIPL. Improvement in GEI s financial risk profile, successful implementation of the ongoing project and the extent of GEI s financial support to its subsidiary are the key rating sensitivities. Background GEI Industrial Systems Ltd acquired a 100% stake in GEI Power Ltd (GEIPL; a star t-up company, holding only land at industrial area) in two tranches in March 2009 and August 2009 from its promoters, for a co nsideration of Rs.15 crore. The acquisition by GEI was aimed at increasing its manufacturing capacity at a new location (Mandid eep) with a larger plant area, since the expansion of the present manufacturing capacity of GEI (Govindpura) is constrain ed due to limited area. Operations GEIPL s operations are on the same lines as GEI, which manufactures air-cooled hea t exchangers and steam condensers, finding application mainly in oil and gas production, gas processing, oil and gas transp ort, petroleum refining, petrochemical, power generation and cement manufacturing, among others. As a part of the long-term strategy, GEI plans to shift its products catered to the power sector to GEIPL s facility (Mandideep). At present 100% of the revenue of GEIPL is through executing outsourcing jobs of the parent company.

Ongoing Projects at GEIPL The new manufacturing plant project at GEIPL is divided in two phases. The total project cost of Rs.56.11 crore which is proposed to be financed with the term debt of Rs.40.21 crore and equity of Rs.5. 04 crore from GEI, compulsory convertible debentures of Rs.10 crore from private equity player and the balance through its internal accruals. The Phase-I of the plant (with investment of around Rs.21.75 crore) was commissi oned in March 2009, and the facility is being used by GEIPL for executing outsourced jobs of GEI. The Phase-II of the plant is under implementation and is expected to be commissioned by June 2011. As on February 28, 2011, GEIPL incurred a total proje ct cost of Rs. 49.05 crore. As a part of the state investment promotion policy, GEIPL is entitled for variou s state duty benefits including one time capital subsidy of Rs.0.15 crore, one time interest subsidy of Rs.0.20 crore, sales tax subsidy of Rs.20 crore (to be availed within 10 years) and entry tax exemption for purchase of raw material for the first five y ears subject to a maximum of Rs.5 crore. Financial Performance GEIPL started its operations in March 2009, while FY10 was the first full financ ial year of the company. Currently it is executing job work orders of GEI and its financial performance is characterised by stable business from the parent company. 1

Industry GEIPL manufactures air-cooled heat exchangers and air-cooled steam condensers fi nding applications in oil and gas production, gas processing, oil and gas transport, petroleum refining, petrochemical, power generation and cement manufacturing, among others. The oil and gas industry has been instrumental in fuelling the rapid growth of t he Indian economy. The government has been taking many progressive measures to create conducive policy and regulatory frame work for attracting investments. Foreign Direct Investment (FDI) up to 100% is permitted in exploration activities of oil and natural gas fields in the private sector and up to 49% is permitted under the government route in petroleum refining by the publ ic sector undertakings (PSU). The refining capacity of the oil refineries in the country has undergone nearly a three-fold increase from 62 MMTPA in April, 1998 to 184 MMTPA in April, 2010. Furthermore, some of the major oil refineries have huge pl ans for increasing the refining capacity in the next four to five years. The demand for the product is expected to increase due to factors such as increa sed investment in oil & gas exploration, processing and transportation, increased power demand, investment in new refiner ies as well as in modernisation/up-gradation of the existing refineries and increasing acceptability of Indian products world wide. Financials (GEI Power) (Rs. crore) For the period ended/ as on 31/03/10 (12m, A) Working Results Income from Operations PBILDT Depreciation PBIT Interest PBT PAT (After def Tax) Gross Cash Accruals Financial Position Equity Share capital Total Net Worth Key Ratios Growth (%) Growth in Total Income Growth in PAT Profitability (%) PBILDT / Total OI APAT / Total OI ROCE RONW Solvency(times) Debt Equity Ratio Overall Gearing (Excl. Acceptances)

Overall Gearing (Incl. Acceptances) Interest Coverage (PBILDT / Interest) Term Debt/GCA (years) Total Debt/GCA(years) 16.64 4.32 0.41 3.91 2.13 1.75 1.47 1.91 2.24 16.53 NM NM 25.97 8.82 15.86 13.71 0.79 1.07 1.31 2.03 8.92 11.34 2

For the period ended/ as on 31/03/10 (12m, A) Liquidity (times) Current ratio Quick ratio Avg. Collection Period (days) Avg. Inventory (days) Avg. Creditors (days) Op. cycle (days) 1.80 1.36 175 107 53 229 A: Audited, NM: Not Meaningful About the Guarantor (GEI) GEI manufactures air-cooled heat exchangers and steam condensers in India, findi ng application mainly in oil and gas production, gas processing, oil and gas transport, petroleum refining, petrochemical, power generation and cement manufacturing, among others. GEI has a reputed domestic and international clientele including some of large P SUs, engineering companies, oil majors and private sector companies, among others. The company has a strong in-house team t o design the products as per the clients specifications. As on March 15, 2011, GEI had an order back log of Rs.444 crore with 64% orders from power sector and balance mainly from the oil & gas sector. Most of the orders are to be executed over a period of 6-1 5 months. During FY10, GEI registered a total income of Rs.250.17 crore with a PAT of Rs.1 4.29 crore as compared to a total income of Rs.214.14 crore with a PAT of Rs.10.37 crore in FY09. For detailed rationale of GEI, please refer our website www.careratings.com DISCLAIMER CARE s ratings are opinions on credit quality and are not recommendations to sanct ion, renew, disburse or recall the concerned bank facilities or to buy, sell or hold any security. CARE has based its ratings on information obtained from sourc es believed by it to be accurate and reliable. CARE does not, however, guarantee the accuracy, adequacy or completeness of any information and is not r esponsible for any errors or omissions or for the results obtained from the use of such information. Most entities whose bank facilities/instruments are rated by C ARE have paid a credit rating fee, based on the amount and type of bank facilities/instruments. 3

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