Energy Equipments. Plot No: 5208, Phase IV, G.I.D.C. Vatva, T-1 Road (Towards Ramol), Ahmedabad Profit sharing Ratio Mr.

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1 Fact Sheet Grading Drivers Energy Equipments ICRA has assigned a SP 4C grading 1 to Energy Equipments (EE), indicating the Weak Performance Capability and Moderate Financial Strength of the channel partner to undertake off-grid and on-grid solar projects. The grading is valid till June 26, 2018 after which it will be kept under surveillance. Strengths Extensive experience of the promoters in the renewable energy space (especially solar heater industry); promoters have been engaged in the solar heater business since 1986 Established relationship with reputed suppliers of solar water heater and PV components and other electrical hardware products Risk Factors Small scale of operations resulting in limited bargaining power with buyers and suppliers Large number of organized/ unorganized players indicating high level of competition; this may lead to difficulties in getting client contracts and may pressurize margins Limited order executions in solar PV segment; lower orders in hand provides limited revenue visibility for the near to medium term Slower debtor realization leads to stretched liquidity reflecting from high NWC/OI of 56% in FY2015 Risk inherent in partnership firm with respect to capital withdrawals and its potential impact on credit profile Year of Formation 1986 Office Address Plot No: 5208, Phase IV, G.I.D.C. Vatva, T-1 Road (Towards Ramol), Ahmedabad Profit sharing Ratio Mr. Kirit Patel 100% Energy Equipments was established as proprietary concern in the year 1986 by Mr. Kirit Patel. Initially, EE was engaged in manufacturing and marketing of solar thermal products. The firm is into manufacturing and installation of solar water heating system, solar distills water plants and solar dryers & air heating system. In FY2016, the firm diversified its business operation to the field of solar photovoltaic systems (PV) where it is engaged in installation of solar panels and solar street light. The scale of operation in PV systems is at nascent stage which will rise in the near to medium term on the back of 2 order on hands with cumulative installed capacity of 80 KW. Firm has an installed capacity to manufacture around 1.50 lakh liters per day s (LPD) of solar water heating systems per annum. EE has already installed around 30 lakh LPD solar water heating system over the last 30 years and served more than 2800 customers. In FY2016, the firm has executed four projects in solar PV systems of total installed capacity of 35 KW. 1 The grading is for Solar PV

2 Financial Strength - Moderate SI Related Business Weak Performance Capability Promoter Track Record: The promoter of Energy Equipments has been associated with the relevant field since more than three decades. EE has been present in solar water heating systems since 1986 and has commenced operations in solar photovoltaic (PV) systems from FY2016. The firm is also engaged in fabricating and installing solar distillation systems and solar dryer & air heating system however, the quantum of such installations is negligible. The promoter of the entity, Mr. Kirit Patel has been engaged in the solar and renewable energy space from more than three decades. Apart from EE, he handles another two group companies engaged in selling and marketing, installation and post installation services of solar water heating systems and solar PV systems (solar panels and solar street light). Mr. Kirit Patel is qualified as a Diploma Mechanical Engineer. He was awarded for his service in renewable energy sector by Ahmedabad Management Association in He also serves as a panel member on the platform of various reputed board and society. Technical competence and adequacy of manpower: The promoter of Energy Equipments has an extensive experience in the solar heater space that spans several years. The firm has well trained personnel for manufacturing and installation of solar water heaters with capacities ranging from 100 LPD s to 1000 LPD s used in domestic consumption while capacities in the range of 500 LPD to LPD used in industrial consumption. The firm also commenced execution of solar projects related to installation of solar panels with on and off grid connection and solar street lights. The firm procures raw material required for solar water heaters, solar panels, solar street lights etc. from local suppliers situated across pan India. The firm has in house design and installation teams who look after the various technical aspects of manufacturing, installation and post installation services. The firm has moderately experienced and qualified management team who looks after the project management, sales and marketing activities. Quality of suppliers and tie ups: Energy Equipments purchases raw materials from domestic vendors and enjoys healthy working relationship with these suppliers. The firm purchases raw material such as solar flat plate collectors, solar PV modules, solar inverter, electrical items, copper pipes among others from suppliers such as Solchrome, Greentek India Private Limited, Delta India, Kailash Corporation etc. on average credit of 60 to 90 days. Customer and O&M Network: Energy Equipments has installed solar water heating system in residential, industrial and commercial premises. For solar PV products, the clientele of the firm mainly consists of industrial and commercial units. The clientele of EE in solar water heating system include educational institutions, commercial establishments, hospitals, industrial units and residential premises. The firm provides O&M services to its clientele through its group concern Urmi Solar Services and other dealers. Firm s O&M network is spreads across Gujarat and also provides through dealers wherein two of them are located in Gujarat and one in Maharashtra. Revenues Return on Capital Employed (RoCE) Rs crore as on FY % as of FY Total Outside Liabilities / Tangible Net worth 0.21 times as on March 31, 2015 Interest Coverage Ratio 3.08 times as on March 31, 2015 Net-Worth Rs crore as on March 31, 2015 Current Ratio 2.06 times as on March 31, 2015 The banker is satisfied with performance of the Relationship with bankers accounts. The overall financial strength of the company is moderate, given healthy profit levels, and moderate coverage indicators. June 2016

3 For further details, please contact: Analyst Contacts: Mr. Sabyasachi Majumdar (Tel. No ) Relationship Contacts: (Tel. No ) Disclaimer: An ICRA SI grade reflects ICRA s opinion on the ability of the graded renewable energy service company to undertake off-grid solar projects. This grading does not constitute an audit by ICRA of the SI. The gradings are based on information provided by the company or obtained by ICRA from sources it considers reliable. ICRA does not guarantee the completeness or accuracy of the information on which the grading is based and therefore shall not be responsible for any liability incurred by the users of such grading. An ICRA SI grading is not a recommendation to use the services of the SI, or to invest in any project undertaken by the SI, or to lend to the SI or invest in any financial instrument issued by the SI. ICRA has the right to revise gradings as and when circumstances so warrant.

4 Copyright, 2016, ICRA Limited. All Rights Reserved. Contents may be used freely with due acknowledgement to ICRA ICRA ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. ICRA ratings are subject to a process of surveillance, which may lead to revision in ratings. An ICRA rating is a symbolic indicator of ICRA s current opinion on the relative capability of the issuer concerned to timely service debts and obligations, with reference to the instrument rated. Please visit our website or contact any ICRA office for the latest information on ICRA ratings outstanding. All information contained herein has been obtained by ICRA from sources believed by it to be accurate and reliable, including the rated issuer. ICRA however has not conducted any audit of the rated issuer or of the information provided by it. While reasonable care has been taken to ensure that the information herein is true, such information is provided as is without any warranty of any kind, and ICRA in particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such information. Also, ICRA or any of its group companies may have provided services other than rating to the issuer rated. All information contained herein must be construed solely as statements of opinion, and ICRA shall not be liable for any losses incurred by users from any use of this publication or its contents.

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