MIRA INFORM REPORT

Report Date :

23.11.2006

IDENTIFICATION DETAILS

Name :	SHYAM TELECOM LIMITED
Registered Office :	B2-D, Shiv Marg, Bani Park, Jaipur – 302016, Rajasthan
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	03.07.1992
Com. Reg. No.:	17-17750
CIN No.: [Company Identification No.]	U32202RJ2002PLC017750
TAN No.: [Tax Deduction & Collection Account No.]	RTKS08067D
PAN No.: [Permanent Account No.]	AAACS0297E
Legal Form :	Subject is a public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturing of Radio Communication Equipments including VHF, UHF and Microwave Communication Equipments.

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Maximum Credit Limit :	USD 8500000
Status :	Satisfactory
Payment Behaviour :	Slow by average 30 days
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Its profit margin is under severe pressure. Payments are reported as slow but correct. Banking relations are satisfactory. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Administrative / Corporate Office :	A-60, Naraina Industrial Area, Phase I, New Delhi - 110 028, India
Tel. No.:	91-11-2579 9606
Fax No.:	91-11-2579 4981
E-Mail :	info@shyamtelecom.com
Website :	http://www.shyamtelecom.com
Factory:	246, Phase-IV, Udhyog Vihar, Gurgaon – 122 015, Haryana, India
Tel. No.:	91-124-2340807/243116 – 00 to 09
Fax No.:	91-124-2341475
E-mail.:	ibs@shyamtelecom.in
Registered Office:	B2-D, Shiv Marg, Bani Park, Jaipur – 302016, Rajasthan
Tel No.:	91-141-5100510
GERMANY	Frohsinnstrasse 16, 63793 Aschaffenburg, Germany Tel:- +49 6021 - 4590111 Fax:- +49 6021 - 4590129 ibs@shyamtelecom.com
USA	6, kilmer Road Suite D, Edison, NJ 08817,USA Tel:- +1732 985 1324, Fax :- +1732 907 1023 sti@shyamtelecom.com bs.yadav@shyamtelecom.com

DIRECTORS

Name :	Mr. Rajiv Mehrotra
Designation :	Chairman and Managing Director
Date of Birth/Age :	45 years
Qualification :	Post Diploma in Radio & TV
Experience :	20 years
Date of Appointment :	01.10.1993
Previous Employment:	Shyam Antenna Electronic Limited as Managing Director
Name :	Mr. Ajay Khanna
Designation :	Managing Director
Date of Birth:	25.1.1956
Qualification :	B.Com, Diploma in Leather Technology
Experience :	19 years
Date of Appointment :	01.10.1993
Previous Employment:	Shyam Antenna Electronic Limited- Director Shyam Microsat Limited - Director Shyam Cellular Infrastructure Projects Limited - Director Shyam Telelink Limited - Director Hexacom India Limited - Director Shyam Telecom Manufacturing Limited - Director Shyam International Limited - Director Shyam ACeS [India] Private Limited - Director Shyam Basic Infrastructure Projects Private Limited - Director Cellphone Credit & Securities India Private Limited - Director Cellcap Invofin India Private Limited - Director
Name :	Mr. Arun Khanna
Designation :	Director
Date of Birth/Age :	10.05.1951
Qualification :	B.Com, L.L.B.
Date of Appointment :	29.05.1998
Previous Employment:	RMS Automation Systems Limited - Managing Director
Name :	Mr. Alok Tandon
Designation :	Managing Director
Date of Birth/Age :	38 years
Qualification :	Chartered Accountant
Experience :	17 years
Date of Appointment :	01.10.1993
Previous Employment:	Shyam Computer Systems Private Limited as Director
Name :	Mr. K. N. Mehrotra
Designation :	Wholetime Director
Date of Birth/Age :	72 years
Qualification :	B.Com., M.A.
Experience :	40 years
Date of Appointment :	01.10.1993
Previous Employment:	Intercity Cables Systems Private Limited - Manager (FAC)
Name :	Mr. Jagrut Vyas
Designation :	Chief Executive Officer
Date of Birth/Age :	47 years
Qualification :	M.S., MBA
Experience :	21 years
Date of Appointment :	25.03.2000
Previous Employment:	Modi Xerox Limited - Associates Director & Country Manager
Name :	Mr. Ajay Khanna
Designation :	Managing Director
Name :	Mr. S. S. Puri
Designation :	Director
Name :	Mrs. Shyama Mehrotra
Designation :	Director
Name :	Mr. Rajesh Mehra
Designation :	Director
Name :	Mr. N. Kumbhat
Designation :	Director (Finance)
Name :	Mr. A. Karati
Designation :	Director
Name :	Mr. M M Nandwani
Designation :	President and International Marketing
Date of Birth/Age :	52 Years
Qualification :	MBA
Date of Appointment :	03.09.2005
Previous Employment:	Tata Indicom Enterprises Xerox Modicorp Limited
Name :	Mr. Lokesh Bhan
Designation :	President and India Sale Marketing
Date of Birth/Age :	49 Years
Qualification :	MBA
Date of Appointment :	13.04.2005
Previous Employment:	Modi Xerox Limited
Other Personnel:
Name :	Mr. Dharmender Dhingra
Designation :	Company Secretary

MAJOR SHAREHOLDERS

Names of Shareholders	Percentage of Holding
Promoters, relative and associates	65.66
Bodies Corporate [Domestic]	5.95
Banks and Financial Institutions [FIs]	--
Mutual Funds	2.95
Foreign Institutional Investors [FIIs]	12.19
Non – Resident Indians [NRIs] & Overseas Corporate Bodies [OCBs]	0.21
Resident Individuals	12.75
Any other	0.28
Total	100.00%

BUSINESS DETAILS

Line of Business :	Manufacturing of Radio Communication Equipments including VHF, UHF and Microwave Communication Equipments.
Products :	Single Channel Radio System, Digital Microwave Radio Series, DECTs, Optical Line Terminal Systems, Network Access through the Digital Subscriber Line, Multi-Tenant Unit, Digital Loop Carriers, Multiplexers, Channel ADPCM Transcoder, VSAT RF Transformers and SCADA systems, among others.
Exports to :	Ethiopia, Nigeria, Fiji, Gabon, South Africa, the Middle East and South East Asia [Bhutan, Sri Lanka]

PRODUCTION STATUS

Particulars	Unit	Actual Production
Repeater	Nos.	5025
DIU	Nos.	42

GENERAL INFORMATION

No. of Employees :	350
Bankers :	State Bank of India, Industrial Finance Branch, Barakhamba Road, New Delhi – 110 001, India
Facilities :	Secured Loan Term Loan From Bank – Rs. 57.000 Millions Vehicles Loan – Rs. 5.469 Millions Cash Credit From Bank – Rs. 112.200 Millions

Banking Relations :	Satisfactory
Auditors :	Mehra Goel & Company Chartered Accountants,
Address:	505, Chiranjiv Tower, 43, Nehru Place, New Delhi – 110 019, India
Associates :	Ø Shyam Antenna Electronic Limited Ø Shyam Computer Systems Private Limited Ø Hexacom India Limited - Cellular Services Ø Essel Shyam Communication Limited - VSAT Services Ø Telecommunications Consultants India Limited Ø Telesystem International Wireless Corporation, Canada Ø Rama Associates Ø ACeS International, Singapore
Subsidiaries:	Ø Shyam Telelink Limited It got incorporated with the objective to bid for the license for basic telephony services and obtained the same for the State of Rajasthan. Ø Hexacom India Limited The company provides a high quality of connectivity and value added Services in 43 cities of Rajasthan achieving 55% of market share. Ø Shyam Telecom Manufacturing Limited The manufacturing business of the Group has been hived of to a separate company and it has emerged as a total end-to-end solution provider. Ø Shyam Tel Singapore Pte. Limited Ø Shyam Microsat Limited Ø Shyam International Private Limited The company after obtaining the Licence, security approvals has been allocated a 40 MHz frequency in C-band from Wireless Planning Commission and was geared up to set up the Gateway for providing Sat-phone services. The gateway was expected to be ready by the first quarter of the year 2002 for launch of commercial operations. Ø Shyam ACeS (India) Private Limited A company was incorporated to provide Global Mobile Satellite Telephony Services is a joint venture between ACeS International Limited (a foreign Company having 49% Equity stake in SAIPL) and Shyam International Private Limited (The holding Company having 51 % stake in SAIPL). Ø Shyam Internet Services Private Limited (SISPL) A company incorporated to provide Internet Services which has obtained licence from DOT in November, 2000 for providing internet services throughout India and as an initial step plans to launch services in the State of Rajasthan and has also received the in-principle clearance for setting up International Satellite gateway for Jaipur and Delhi.

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
50,000,000	Equity Shares	Rs. 10 each	Rs. 500.000 millions
2,500,000	Preference Shares	Rs. 100 each	Rs. 250.000 millions
	Total		Rs. 750.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
32,200,000	Equity Shares	Rs. 10/- each	Rs. 322.000 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		322.000	322.000	322.000
2] Advance for Share Capital		0.000	0.000	0.000
3] Reserves & Surplus		1910.921	1895.256	1635.040
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		2232.921	2217.256	1957.040
LOAN FUNDS
1] Secured Loans		161.945	100.215	50.000
2] Unsecured Loans		112.200	0.000	21.810
TOTAL BORROWING		274.145	100.215	71.810
DEFERRED TAX LIABILITIES		22.037	16.300	0.000
TOTAL		2529.103	2333.771	2028.850
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		371.759	309.688	0.886
Capital work-in-progress		11.861	17.349	0.000
INVESTMENT		4085.713	3975.477	4304.639
DEFERREX TAX ASSETS				4.929
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	110.851	98.069	0.000
	Sundry Debtors	369.090	504.870	1.045
	Cash & Bank Balances	113.668	108.608	0.849
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	115.081	72.686	41.133
Total Current Assets		708.690	784.233	43.027
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	2645.866	2753.618	2324.631
	Provisions	3.054	2.128	0.000
Total Current Liabilities		2648.920	2755.746	2324.631
Net Current Assets		(1940.230)	(1971.513)	(2281.604)
MISCELLANEOUS EXPENSES		0.000	2.770	0.000
TOTAL		2529.103	2333.771	2028.850

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	1288.506	2254.937	145.747
Profit/(Loss) Before Tax	26.976	103.350	8.416
Provision for Taxation	11.480	102.962	3.730
Profit/(Loss) After Tax	15.496	206.312	4.686
Export Value	59.774	35.650	NA
Import Value	172.367	370.361	NA
Expenditure	1262.528	2598.750	137.331

QUARTERLY RESULTS

PARTICULARS	30.06.2006 (1^st Quarter)	30.09.2006 (2^ND Quarter)
Sales Turnover	701.600	678.800
Other Income	4.100	23.000
Total Income	705.700	701.800
Total Expenditure	657.400	660.900
Operating Profit	48.300	40.900
Interest	10.700	15.100
Gross Profit	37.600	25.800
Depreciation	6.900	7.300
Tax	10.500	6.900
Reported PAT	20.200	11.600

200606 Quarter 1 - Expenditure Includes Increase / Decrease in Stock in Trade Rs (2.979)million Consumption of Material & Services Rs 74.482 million Goods Included Purchase Rs 494.358 million Staff Cost Rs 32.987 million Other Expenditure Rs 58.525 million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 04 Complaints disposed off during the quarter 04 Complaints unresolved at the end of the quarter Nil 1. The above financial results after review of Audit Committee were taken on record by the Board of Directors at its meeting held on July 28, 2006. Limited Review of these results has also been carried out by Statutory Auditors of the Company. 2. Previous year figures have been regrouped wherever considered necessary. 3. Provision for tax include provision for Deferred Tax & Fringe Benefit Tax. 4. The Scheme of Arrangement comprising amalgamation of Shyam Telecom Manufacturing Limited (STML) with Shyam Telecom Limited (STL)and transfer and distribution of equity shares of Shyam Telelink Limited has been approved by Hon'ble High Court of Rajasthan vide its order dated May 08, 2006 which became effective on May 19, 2006. Pursuant to the scheme, STML has been amalgamated with STL w.e.f. April 01, 2004 and the effect of which has been included in the Audited figures of year ended March 31, 2006, hence the Quarterly Financial Results published in the four quarters for the period commencing from April 01, 2005 to March 31, 2006 are not comparable with the Audited figure foe the same Period. 4. Due to the nature of business & common facilities for various segments, a reasonable allocation of capital employed to various segments is not Currently practicable. 5. The financial figures shown under quarter ended June 30, 2006 have been computed after taking the effect of Amalgamation of Shyam Telecom Manufacturing Limited with Shyam Telecom Limited. hence are not comparable with the figures of June 30, 2005 which were computed without taking the effect of Amalgamation of Shyam Telecom Manufacturing Limited (which had net sales / Income of Rs 183.172 million during the quarter ended on June 30, 2005) with Shyam Telecom Limited. 6. The Board of Directors have decided that post implementation of the Scheme of Arrangement, the financial of stand alone basis for Shyam Telecom Limited (amalgamated company) shall only tax provided as consolidated figures were optionally provided uptillnow.

200609 Quarter 2 - Expenditure Includes Increase / Decrease in Stock in Trade Rs. (15.310)million Consumption of Material & Services Rs. 69.584 million Goods Included Purchase Rs 516.155 million Staff Cost Rs. 33.534 million Other Expenditure Rs. 56.920 million EPS is Basic and Diluted Status of Investor Complaints for the quarter ended 30.09.2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 07 Complaints disposed off during the quarter 07 Complaints unresolved at the end of the quarter Nil 1. The above financial results after review of Audit Committee were taken on record by the Board of Directors at its meeting held on 27.10.2006. Limited Review of these results has also been carried out by Statutory Auditors of the Company. 2. Previous year figures have been regrouped wherever considered necessary. 3. Provision for tax include provision for Deferred Tax & Fringe Benefit Tax. 4. The scheme of Arrangement became effective on 19.05.2006 pursuant to which Shyam Telecom Manufacturing Limited (STML) has been amalgamated with Shyam Telecom Limited (STL) with effect from 01.04.2006 hence accounts for the period 2004-2005 and 2005-2006 have been made after taking into effect of the said amalgamation. The Quarterly Results published for the years 2004-2005 & 2005-2006 are not Comparable to the audited figures for the same period. 5. The financial figures shown under quarter / half year ended 30.09.2006 have been computed post Amalgamation and hence are not comparable with the figures shown under the quarter/ half year ended 30.09.2006. 6. As on date pursuant to the scheme of Arrangement, the investment in Shyam Telelink Limited has been Transferred / distributed to the share holders of the company and the share capital of the Company stands reduced from Rs. 322.00 million to Rs. 112.70 million post implementation. 7. Due to the nature of Business & Common facilities for various segments a reasonable allocation of capital employed to carious segment is not currently practicable. 8. Other income include Rs. 20 million on account of assignment of keyman insurance policy of a Director 9. The Board of Directors have decided that post implementation of the Scheme of Arrangement, the financial of stand alone basis for Shyam Telecom Limited (amalgamated company) shall only tax provided as consolidated figures were optionally provided up till now.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	0.08	0.04	0.06
Long Term Debt Equity Ratio	0.04	0.02	0.06
Current Ratio	0.28	0.17	0.03
TURNOVER RATIOS
Fixed Assets	3.54	14.26	161.89
Inventory	12.96	49.51	--
Debtors	3.10	9.60	10.83
Interest Cover Ratio	1.38	(4.11)	1.48
Operating Profit Margin (%)	9.00	(10.87)	19.97
Profit Before Interest and Tax Margin (%)	7.22	(11.60)	19.97
Cash Profit Margin (%)	2.92	(9.12)	3.64
Adjusted Net Profit Margin (%)	1.14	(9.84)	3.64
Return on Capital Employed (%)	4.05	(12.96)	1.41
Return on Net Worth (%)	0.70	(11.45)	0.27

STOCK PRICES

Face Value	Rs.10/-
High	Rs.61.20/-
Low	Rs.55.80/-

LOCAL AGENCY FURTHER INFORMATION

History

Subject was incorporated on 3^rd July, 1992 at New Delhi having Company Registration No. 55-49428 later in the year 2002, the company’s registered office was transferred to Rajasthan and a new company Registration No. 17-17750 Dt. 01/08/2002 of Rajasthan Registry was obtained.

Incorporated in 1992, Shyam Telecom Limited, a leading manufacturer of Telecom Equipment in India is the flagship company of the Shyam Group of India. The expanding horizon of the telecom sector in India has given Shyam new vistas and avenues for growth and expansion.

To concentrate mainly on its core activities i.e. investment in Telecom activities, the company restructured its business and a result it has de-merged its manufacturing business to a wholly owned subsidiary viz. Shyam Telecom Manufacturing Limited(formerly known as Shyam Telecom Infrastructure Projects Limited). Subsequently the company will be a investor in Shyam Telecom Manufacturing Limited (developer of wireless product for GSM & CDMA) and Shyam Telelink Limited (basic telephony services in Rajasthan). 

 Shyam Telecom also took a strategic decision by de-subsidiarise Shyam International Limited by which Shyam ACeS also got de-subsidiarised. It has also acquried the entire capital of Shyam Telecom Manufacturing Limited & Shyam Tel Singapore Pte Limited. 

Shyam's R&D which is fully recognised by the Department of Science and Technology has been able to design new products. Shyam's R&D wing is well-equipped with the latest and sophisticated testing instruments, CAD/CAM for design and assembly work besides having highly qualified engineers. 

The company currently manufactures Wireless in Local Loop, Fiber in local loop, Digital Loop Carries (DLC), Digital Radios, Spread Spectrum Radios, Digital Subscriber Line (DSL) for Internet Acesses, Remote Energy Meeting Systems (REMS) & Supervisory control & data accusation systems (SCADA). The company has an international presence in 27 countries spread over America, Europe, Africa, Indian sub-continent and Asia-Pacific. 

The company has extended its basic telephony service to Jaipur and Jodhpur. The company's service covered all the three technologies in basic telephony - wireline, CDMA and CorDect.

FIXED ASSETS

The company’s fixed assets of important value include land, building, plant and machinery, electric installation, furniture and fixture, vehicles, office equipment, R & D equipment and R & D building.

Generic Names of the Principal Products/Services of the Company is as under:-

ITC No.	Products Descriptions
852520.09	Other Radio Communication Equipment including VHF, UHF & Microwave Communication Equipment.

OPERATIONS 

 The Company has done a consolidated turnover of Rs. 2266336 Millions and has registered a profit on sale of investment of Rs. 453.748 Millions , pertaining to Hexacom India Limited. besides being the Holding Company of STML and STLL which individually have also done extremely well during the period under review. The Company has also registered Profit after tax of Rs. 206.313 Millions . 

 The above figures pertain to consolidation of STML and STL, whereby STML has a majority share in turnover & profits as it was able to complete the manufacture and supply of CorDECT all over the country which was a prestigious order and product supplied was deployed in semi urban and rural areas in the various BSNL Telecom Circles. The Amalgamated Company is also into manufacturing of repeaters and accessories for providing multi band & multi system coverage of mobile signals for indoor / inbuilding as well as outdoor applications. The company has established its credentials amongst major Indian Telecom operators such as Hutch, Airtel, Spice, Nokia and others and has received tremendous response in terms of orders from them. The company holds the majority market share in India in repeater business and is striving hard to do well across the borders also, by targeting Germany, USA, USSR and other developing markets. 

 The company's other subsidiary Shyam Telelink Limited (STLL) has also marked a substantial improvement during the period under review as compared to previous years. STLL commanded a significant growth in the subscriber base and market share. The subscriber base registered a momentus growth and increased to 185000 as compared to 125000 in the previous year and in the current year around 200000.The total income registered a jump of more than 29% being Rs. 1236.319 Millions as against Rs.954.953 Millions in the previous year. The Operating profit has also improved significantly from Rs. 132.722 Millions to Rs. 281.986 Millions registering a growth of more than 112%. STLL has increased its presence from 60 cities to 102 cities and plans to cover additional 73 cities during the current year, thus covering more than 175 cities in Rajasthan. To cater to the needs of various segments of the people of the State, STLL is deploying world-class wireless and wire line technology. STLL has laid optical fiber cable to cover 102 major cities of Rajasthan, where there is a large potential customer base and major intercity traffic. In the year 2005-06 STLL plans to lay another 600 km of optical fiber to mainly close the open ended cities on spurs and cover other major cities. 

 EXPORTS POTENTIAL 

 Since the manufacturing activities of the telecom equipments were carried out by STML (wholly owned subsidiary of the company now stands amalgamated with the company) it has been exporting Repeaters and Accessories, to several countries around the world including Baharain, USA, Argentina, Bulgaria, Italy, France, Spain, Costa Rica, Indonesia, Russia, Nigeria, Ghana, and many more, meeting stiff competition from China and European countries in terms of both price and performance. STML has also participated in more than 15 exhibitions in North and South America, Europe, South East Asia and the Indian Sub Continent during the period under review, which had helped it to create a brand image and increase its customer base. The products of STML are now being used in more than 15 networks worldwide. 

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Industry Structure and Opportunity: 

India has already crossed 100 million subscribers mark, and likely to reach 250 million by 2007 which means an investment of Rs.1,60,000 Crores for equipments in next 3 years. 

 A substantial part of the telecom equipment deployed in the Government and Private Organization Wireless networks is still being imported causing a drain on the Foreign Exchange (estimated to be Rs.20,0000.000 Millions and has also affected the employment growth and domestic technological innovations. In the name of liberalization, we have tended to incentivise the imports, removed all restrictions including technical specifications, requirements leading to an uncontrolled growth of imports. There is a need for a policy on manufacturing for encouraging the telecom equipment and handset manufacturing in India to produce good quality equipment at competitive prices. A robust manufacturing base is necessary for a balanced growth in the telecom sector. 

 For the growth of an essential infrastructure, which is lagging far behind the teledensity of developed countries, it is necessary that the Telecom Revenues are to be ploughed back to ensure growth of this sector in the form of large investment on R&D and up gradation of processing / manufacturing facilities in the country and also the expansion of national networks, and a conducive climate has to be created to attract additional local investments and FDI for Telecom manufacturing. 

 Manufacturing alone provides additional jobs at all levels and would continue to be a key player in increasing the employment opportunities for skilled and knowledgeable workers in the country. The achievement of such ambitious goals, calls not only for creating a level playing field for ensuring the tariff parity with other countries but also improvement of infrastructure, simplification of custom procedures, promotion of industrial clusters and introducing flexibility in labour policies. 

 Manufacturing has been the backbone of all the developed nations. In the advanced manufacturing countries, it is where R&D starts, where new technologies are born, where Scientists and Engineers are challenged to develop new and better processes, products and technologies. Some of the economists term manufacturing as the real base of economy and according to them, a country is strong economically if 50% of their GDP is from manufacturing sector. In India, it is at present 25% of the GDP and therefore, there is a huge potential and viable business case for investment in manufacturing in this country. Manufacturing provides jobs at all levels and will be the key in uplifting the status of have-nots in this country. 

RESTRUCTURING: 

 Shyam Telecom Limited : The company has obtained the approval of the Hon'able High Court of Rajasthan, for Scheme of Arrangement (SOA), which contemplated the following: 

 a) Amalgamation of Shyam Telecom Manufacturing Limited (STML) with Shyam Telecom Limited (STL- the amalgamated company). 

 b) Transfer of liabilities of Amalgamated company to Shyam Basic Infrastructures Projects Private. Limited. (SBIPPL) to the tune of 2000.000 Millions along with the investment of 2000.000 Millions in the equity shares of Shyam Telelink Limited (STLL). 

 c) Distribution of residual investment of Amalgamated company, in the equity shares of STLL to the shareholders of the Company in terms of the Scheme. 

 d) Consequential Reduction of Share Capital and Reserves of STL and Reorganization thereof. 

 e) Listing of shares of Shyam Telelink Limited (STLL). 

 The Scheme of Arrangement would result in manufacturing & telephony services to be carried out by two independent & listed entities, which would enable the managements of two companies to focus on their individual operations, resulting in reduction in overall cost and investment and would provide leverage to strategic investors, to invest in both the business directly. The SOA has intended unlocking the value and enhancing liquidity of shareholders of Shyam Telecom Limited (STL) in respect of both manufacturing & telephony services subsidiaries. 

 The figures as represented in the balance sheet are after consolidation of STML and STL, whereby STML has a majority share in turnover & profits as it was able to complete the manufacture and supply of CorDECT all over the country which was a prestigious order and product supplied was deployed in semi urban and rural areas in the various BSNL Telecom Circles. The Amalgamated Company is also into manufacturing of repeaters and accessories for providing multi band & multi system coverage of mobile signals for indoor / inbuilding as well as outdoor applications. The company has established its credentials amongst major Indian Telecom operators such as Hutch, Airtel, Spice, Nokia and others and has received tremendous response in terms of orders from them. The Company holds the majority market share in India in repeater business and is striving hard to do well across the borders also, by targeting Germany, USA, USSR and other developing markets. 

 Shyam Telelink Limited : Shyam Telelink Limited (Service Provider) other subsidiary has also managed to record substantial improvement during the period under review as compared to the previous year. The growth in the customer base happened in the second half of the financial year. There was increased competition both from mobile operators (GSM / CDMA) and fixed line operators. The market was regulated by low tariff rates & the tariffs were reduced to match competition prices. The Company commanded a significant growth in the subscriber base and market share. The subscriber base registered a momentus growth and increased to 185000 as compared to 125000 in the previous year and in the current year around 200000. The total income registered a jump of more than 29% being Rs. 1236 Millions as against Rs. 955 Million in the previous year. The Operating profit has also improved significantly from Rs. 133 Million to Rs. 282 Million registering a growth of more than 112%. 

 Hexacom India Limited.: The company has sold / transferred the equity stake held by it in Hexacom India Limited., as upon unification of the licences, the company had two licences in the same circle for same services hence it had options either to merge the two or sell one of them. As in Hexacom India Limited. the company was a minority shareholder, it decided to disinvest. The disinvestment has been done as a step towards enhancing the liquidity position of the Company to make it a profitable business venture. 

 Internal Control System and their adequacy : The Board of Directors has constituted an Audit Committee as per the provisions of section 292A of the Companies Act, 1956 and Corporate Governance requirements specified by the Stock Exchanges. 

 The Company has an integral system of internal controls which ensures optimal utilization and protection of resources, accurate reporting of financial transactions and compliance with applicable laws and regulations and also follows internal policies and procedures. 

COMPANY PROFILE

Shyam Telecom Limited, a leading manufacturer of telecom equipment in India. The expanding horizon of the telecom sector in India has given Shyam new vistas and avenues for growth and expansion. Boasting of a wide range in telecom equipment currently being used in India, the company has always kept an eagle's eye on the future.

Shyam's R&D which is recognized by the Government of India has been successfully designing new products. Shyam's R&D is well-equipped with the latest and sophisticated testing instruments, Shyam has a team of highly qualified research and design engineers.

Shyam has been hailed as an innovator with a global vision. Apart from meeting specific requirements of Indian Mobile operators Shyam Telecom has widened its horizons across

international markets with its next generation telecom systems and solutions

SHYAM is the oldest specialized Indian company for Antenna Electronic, R.F. Communication System. Together with its sister telecom operator companies employees more than 1000 people.

SHYAM is the unique company, which has 30 years of experience in designing, Reception & Distribution of RF signals, 8 Years experience as GSM operator, 7 Years experience as V-Sat operator & 6 Years experience as CDMA operator.

All their system components are technically harmonized to each other, so as to guarantee the best physically possible transmission quality.

Nevertheless, because of the size of their undertaking they are also highly flexible- which is just what the market in today’s rapidly changing times demands. The construction of systems consisting of hundreds of different components, which must all form a functional whole at give time and specific place demands a high degree of mobility and logistic skill

Their company philosophy is faithful to its chosen motto “Quality makes it’s way” what they think, what they do and what they make are all highly professional.

They tailor-made to the whishes and specifications of their customers Outdoor coverage solutions & In Building Systems. They guarantee the systems. Their products have been known and recognized by mobile telecom operators

Customers

SHYAM Telecom Limited is exporting telecommunication products and systems to various countries worldwide and has come a long way,endeavouring to provide the best advantage to its growing customer base through wide coverage,innovative products and responsive services at competitive prices.

• Airtel (Singtel partner)
• BPL (France Telecom partner)
• BSNL
• Hutchison
• Idea (AT & T partner)
• RPG (Vodaphone partner)

SHYAM Telecom exports products & total solutions to the following countries :

• Al-Salvador
• Argentina
• Bahrain
• Barbados
• Belgium
• Costa Rica
• Cameroon
• Chile
• France
• Finland
• Guyana
• Ghana
• Guatemala
• Indonesia
• Iran
• Italy
• Israel
• Liberia
• Libya
• Malta

• Mangolia
• Mauritius
• Nigeria
• Norway
• Phillippines
• Russia
• Sierra Leone
• Sri Lanka
• Spain
• Syria
• Tajikistan
• Tanzania
• Thailand
• UAE
• Uganda
• UK
• USA
• Vietnam
• Zanzibar

PRESS RELEASE

Ø BSNL - We have executed BSNL single order of corDECT for Rs.1260.000 Millions = US$ 28 million.

Ø ITI - Single order received from ITI approximately Rs.300.000 Millions - executed Rs.170.000 Millions = US$ 3.7 million

Ø Trade Shows Schedule:

Ø Rural Cellular Association
13th Annual Convention & Exhibition
29th March.05 to 1st April, 2005
Las Vegas, Nevada, USA

Ø GSM in West Africa
05th April.05 to 06th April, 2005
Le Meridien President, Dakar, Senegal

Ø In-Building Solutions 2005
Arabella Sheraton Grand Hotel
23rd May.05 to 26th May, 2005
Munich ,Germany

Ø CommunicAsia
14th Jun.05 to 17th June, 2005
1 Expo Drive,Singapore 486150

Ø In-Building Wireless 2005

11th July.05 to 13th July, 2005

Ritz Carlton, Las Vegas,Nevada, USA

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 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.44.65
UK Pound	1	Rs.87.23
Euro	1	Rs.58.96

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	6
--RESERVES	1~10	5
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		48

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		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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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

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