MIRA INFORM REPORT

Report Date :

11.12.2007

IDENTIFICATION DETAILS

Name :	GOLDSTONE INFRATECH LIMITED
Formerly Known As :	GOLDSTONE TELESERVICES LIMITED
Registered Office :	9-1-83 And 84, Amarchand Sharma Complex, S D Road, Secunderabad – 500 003, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	11.10.2000
Com. Reg. No.:	35451
CIN No.: [Company Identification No.]	L64203AP2000PLC035451
TAN No.: [Tax Deduction & Collection Account No.]	HYDG00750B
Legal Form :	A closely held Public Limited Liability Company
Line of Business :	Manufacturer of Silicon Rubber Polymer Insulators used in electric line.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 1802400
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well – established and reputed company. Available information indicates high financial responsibility of the company. Trade relations are fair. Business is active. Fundamentals are strong and healthy. Payments are reported as usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	9-1-83 And 84, Amarchand Sharma Complex, S D Road, Secunderabad – 500 003, Andhra Pradesh, India
Tel. No.:	91-40-27807640/39100012
Fax No.:	91-40-27801910
E-Mail :	cs@goldstone.net
Website :	http://www.goldstonepower.com
Corporate Office :	Amarchand Sharma Complex, S D Road, Secunderabad – 500 003, Andhra Pradesh, India
Tel. No.:	91-40-27807640 / 27806706
Fax No.:	91-40-27801910
Administrative Office:	6/10, Shantiniketan , New Delhi - 110 021, India
Website Details:	http://www.goldstonepower.com
Factory :	Plot No. 1 And 9 , Phase – II, IDA Cherlapally Hyderabad – 500 051, Andhra Pradesh, India
Tel. No.:	91-40-27266783 / 84 / 85
Fax No.:	91-40-27266786
E-Mail :	support@goldstone.net

DIRECTORS

Name :	Mr. L P Sashikumar
Designation :	Director
Name :	Mr. M V S R Kamesam
Designation :	Director
Name :	Mr. S Murali Krishna
Designation :	Director
Name :	Mr. Mahita Caddell
Designation :	Director
Name :	Mr. M Gopala Krishna
Designation :	Director

KEY EXECUTIVES

Name :	Mrs. P Anupama
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Shareholding of promoters and Promoter Group
Individuals / Hindu Undivided Family	1310515	6.23%
Bodies Corporate	2000000	9.52%
Public Shareholding
Institutions
Financial Institutions / Banks	31459	0.15%
Insurance Companies	71000	0.34%
Non Institutions
Bodies Corporate	4449044	21.16%
Individual Shareholding Holding Nominal Share Capital Upto 1 Lakh	5942235	28.26%
Individual Shareholding Holding Nominal Share Capital In Excess Of 1 Lakh	6794951	32.32%
Any Other ( Nris / OCB)	424101	2.02%
Goldstone Exports Limited	2000000	9.52%
Mr. L P Sashikumar	1310515	6.23%
RJL Infrastructure Private Limited	1536192	7.31%
Mr. K V S Chalapathi Rao	1461366	6.95%
Mr. D Hem Kumar	1000000	4.76%
Mr. R Vivek Kumar	441598	2.10%
Mr. Rakesh Raj Krishna Agarwal	436525	2.08%
Mr. Suresh Ramniklal Shah	316000	1.50%
Mr. Y V Prasad	300000	1.43%
Mr. Anuj Shantilal Badjate	280138	1.33%
Sharekhan Limited	237208	1.13%
Angel Capital And Debt Market Limited	228012	1.08%

BUSINESS DETAILS

Line of Business :

Manufacturer of Silicon Rubber Polymer Insulators used in electric line.

Products :

ITC Code	Product Description
754690	Thermoweld Filled Heat Shrinkable Sleeves
854790	Jelly Filled Telephone Cable Jointing Kits And Sub Kits
854620	Composite Polymers Insulators.

GENERAL INFORMATION

No. of Employees :

138

Bankers :

State Bank of Hyderabad

Facilities :

SECURED LOAN	31.03.2006 ( Rs. in millions )
From State Bank of Hyderabad
Term loans	41.497
Working Capital	34.764

UNSECURED LOAN	31.03.2006 (Rs. in millions)
Sales Tax Deferment	55.677

Banking Relations :

Satisfactory

Auditors :

Name :

P Murali and Company

Chartered Accountants

Associates/Subsidiaries :

Nil

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
17000000	Equity shares	Rs. 10/- each	Rs.170.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
8409322	Equity shares	Rs. 10/- each	Rs.84.093 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		84.100	84.100	54.700
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		366.500	348.600	259.500
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		450.600	432.700	314.200
LOAN FUNDS
1] Secured Loans		106.900	78.800	90.800
2] Unsecured Loans		63.400	55.700	46.400
TOTAL BORROWING		170.300	134.500	137.200
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		620.900	567.200	451.400
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		193.700	197.800	185.800
Capital work-in-progress		230.200	67.400	53.400
INVESTMENT		21.600	39.100	42.500
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	40.100	17.000	27.900
	Sundry Debtors	152.000	183.900	205.500
	Cash & Bank Balances	32.400	13.400	12.200
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	72.600	169.500	77.900
Total Current Assets		297.100	383.800	323.500
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	94.000	114.800	155.900
	Provisions	36.100	16.600	3.500
Total Current Liabilities		130.100	131.400	159.400
Net Current Assets		167.000	252.400	164.100
MISCELLANEOUS EXPENSES		8.400	10.500	5.600
TOTAL		620.900	567.200	451.400

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		300.900	308.900	200.600
Other Income		10.600	72.400	10.500
Stock Adjustments		15.100	3.800	[8.500]
Total Income		326.600	385.100	202.600
Profit/(Loss) Before Tax		39.300	85.000	14.100
Provision for Taxation		10.200	19.000	6.300
Profit/(Loss) After Tax		29.100	66.000	7.800
Expenditures :
	Raw materials	134.200	158.400	78.200
	Excise Duty	33.200	13.100	6.300
	Power and Fuel	4.800	4.800	4.100
	Other Manufacturing expenses	19.900	6.500	4.100
	Employee cost	21.600	26.900	21.300
	Selling and administration Expenses	27.900	45.800	35.000
	Miscellaneous Expenses	5.900	6.000	2.900
	Interest and financial Charges	14.600	15.500	14.100
	Depreciation	25.200	23.100	22.500
Total Expenditure		287.300	300.100	188.500

QUARTERLY RESULTS

Year	30.09.2007	30.06.2007
Type	2^nd Quarter	1^st Quarter
Sales Turnover	123.200	135.800
Other Income	1.900	2.200
Total Income	125.100	138.000
Total Expenditure	86.200	101.000
Operating Profit	38.900	37.000
Interest	3.600	3.700
Gross Profit	35.300	33.300
Depreciation	7.600	6.800
Tax	6.700	7.700
Reported PAT	21.000	20.200

KEY RATIOS

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
PAT / Total Income	(%)	8.90	17.13	3.84
Net Profit Margin (PBT/Sales)	(%)	13.06	27.51	7.02
Return on Total Assets (PBT/Total Assets}	(%)	5.45	13.09	2.50
Return on Investment (ROI) (PBT/Networth)		0.08	0.19	0.04
Debt Equity Ratio (Total Liability/Networth)		0.66	0.61	0.94
Current Ratio (Current Asset/Current Liability)		2.28	2.92	2.02

LOCAL AGENCY FURTHER INFORMATION

DIRECTOR REPORTS:

Review 
The Directors are pleased to state that during the year under review the Company achieved a turnover of Rs. 275.453 millions compared to Rs. 368.284 millions in the previous financial year. Net Profit after tax stood at Rs. 26.319 millions as against of Rs. 65.979 millions in the previous financial year. 

Transfer to Reserves 

The Board has transferred a sum of Rs.2.915 millions to the General Reserve from the undistributed profits in accordance with the Companies (Transfer of Profits to Reserves) Rules, 1975. 

Subsidiaries 
The Company has two subsidiaries namely Newtech Stewing Telecom Limited (NSTL) with 98% holding and Shree Shree Telecom Private Limited (SSTPL) with 100% Shareholding. The brief financial results of the subsidiaries are given hereunder. 

Newtech Stewing Telecom Limited 

NSTL posted a total income of Rs.25.376 millions as against Rs. 32.903 millions for the previous year i.e., 2005-06. NSTL posted a Net Loss of Rs. 0.857 millions as against Net Profit of Rs. 0.824 millions for the previous year i.e., 2005-06. 

Future Plan of Action 

Commercialization of new products for which the products are under trials at development stage Few new products have been identified after a thorough study of the market and the processes to manufacture theses products will be developed in R and D Lab. 

MANAGEMENT DISCUSSION ANALYSIS AND BUSINESS OUTLOOK 

The Company's products are used widely in Power Sector, Indian Railways, Telecommunications, Oil and Gas Pipeline Sectors and the management is now focusing more on manufacturing of polymer insulators and proposing to venture into Real Estate activities. The power sector is recognised as one of the most important infrastructure sectors in the economic survey published by the Government of India. The electricity transmission and distribution, along with water supply and sanitation have been acknowledged as one of the most important necessities for unlashing high and sustained growth. The annual capacity addition by the end of the 11th plan would be 12,000 MW. The Ministry of Power will facilitate private participation in transmission projects. 

Telecom Division 

As expected, the demand for cable jointing kits has come down and this division has achieved a turnover of Rs. 49.989 millions during the year 2006-07 against a turnover of Rs. 136.342 millions during the previous year. 

Insulators Division 

The company has been a pioneer in introducing polymer insulators in the country. Insulator division operations accounted for 82.01 per cent of total revenues in 2006-07, compared to 39.60 percent a year earlier.

During 2006-07, the company has started commercial production of High Voltage Composite Insulators ranging from 66 kV to 400 kV and the products have been widely accepted in niche market. Revenues from this division has increased by 102% - from Rs.122.332 millions in 2005-06 to Rs. 246.864 millions in 2006-07. The division is expected to record similar growth in the current financial year also. 

BPO Division 

The IT/ITES business has become highly competitive. The company has reduced its dependence and exposure in this business significantly. 

Internal Control System 

The internal audit and other internal controls and internal checks implemented in the Company are adequate and commensurate with the size and nature of operations providing sufficient assurance and safe guarding all assets, authorizing all transactions and its recording and reporting properly and timely. The audit committee constituted by the Board of Directors reviews regularly the financial and other related aspects as per the requirements of the Corporate Governance. 

Financial Performance

During the year the Company has achieved a turnover of Rs. 300.866 millions in 2006-07 as against Rs. 308.944 millions in 2005-06. However the revenues from core activities related to manufacturing have increased from Rs.258.673 millions in 2005-06 to Rs. 296.853 millions in 2006-07. The decrease is mainly on account of decreased performance in BPO and Telecom division. 

 Material and Manufacturing costs decreased from Rs.162.401 millions in 2005-06 to Rs.142.308 millions in 2006-07. As a percentage of total income, material and manufacturing costs decreased from 55% to 53% and had a lower material cost ratio than Company's average. 

Personnel costs decreased from Rs.26.913 millions in 2005-06 to Rs.21.526 millions in 2006-07. This was due to decrease in operations in BPO Division and joint Kits Division. 

Similarly Operating and Other expenses decreased from Rs.53.112 millions in 2005-06 to Rs. 33.106 millions in 2006-07. This was due to decrease in operations in BPO Division and Joint Kits Division. 

Financial Expenses for 2006-07 have decreased marginally to Rs.14.633 millions compared to Rs.1.5560 millions despite increase in market interest rates. 

The increase in depreciation charge during the year was on account of additions of fixed assets to the gross block during the year. 

Provision for Income Tax (inclusive of Fringe Benefit Tax) for 2006-07, amounts to Rs. 10.189 millions versus an expense of Rs. 19.058 millions. 

During the year Fixed Assets worth Rs.21.267 millions have been added mainly in insulator division. Increase in the value of inventories as at 31st March, 2007 has been on account of increased product range in Insulator Division. 

Outlook for the year 2007-08 

The Composite Insulators manufactured by their Company are well established in the market and on realizing the inherent advantages / benefits of Composite Insulators over the traditional Ceramic Insulators; the company expect to achieve more than 100 percent growth in this year also. 

The company is planning to start production of heat shrinkable sleeves for oil and gas pipeline joints. 

Telephone Cable jointing Kits is expected to beat the same level. However, share of this division in total revenues is expected to come down to less than 10% because of substantial growth in other segments. 

Over the last decade the seeds of economic liberalisation sowed in the year 1990's have begun to yield fruits. The Indian economy has been on the ascent with the various segments recording unprecedented growth rates. This has resulted in significantly higher disposable incomes among the Indian populace which creates greater demand for housing as well as commercial properties across India. The Company is embarking into real estate activities. 

Higher turnovers coupled with implementation of various cost control measures would result in better profitability for the company during the current financial year. 

FIXED ASSTES:

· Land

· Building

· Plant and Machinery

· Furniture and Fixtures

· Lab tools and Equipments

· Electrical Equipments

· Installation

· Vehicles

· Computer System

· Office equipments

· Generator

· Leasehold Improvements

· Air conditioners

· Network Equipments

· Electronic Equipments and UPS

· Tools and Spares

· Temporary Sheds

WEBSITE DETAILS:

Subject is an ISO-9001:2000 certified company and its R and D Center is recognized by the Department of Scientific and Industrial Research, Govt. of India.

GTSL is the largest manufacturer and suppliers of Heat Shrinkable Telecom Cable Closures and other Telecom accessories in India.

Subject (GTSL) is a public listed company. GTSL is currently traded on the Bombay Stock Exchange (BSE), the National Stock Exchange (NSE) as well as the Ahmedabad, New Delhi, Chennai and Hyderabad Stock Exchanges in India.

Its BPO Services offers fully blended multimedia based contact center providing in-bound and out-bound call center and back office supporting processes.

Subject which has become a market leader through creative technologies has ventured into Composite Insulators, as a result of its commitment to excellence. Composite Insulators are well used across the globe as a significant technology breakthrough. The company has ambitious plans to manufacture and develop value added products in the Power sector and Railways, featuring exclusive characteristics that exceed all the present requirements of the utility business around the world at most competitive pricing.

They are into manufacturing of silicon rubber polymer insulators used in electric line from low high voltage in India. They are interested to tie up with reputed distributors for their Insulators the export markets in Middle East. They are also into manufacturing of jelly cables for all cable closures for jelly cables.

PRESS RELEASE:

Hyderabad, Andhra Pradesh, India, 10/31/2007 – Goldstone Teleservices Limited (BSE: 532439; NSE:GOLDTELE), the largest Indian manufacturer and suppliers of Composite Insulators, has decided to change its name to “Goldstone Infratech Limited” (GIL).

The name is in line with the company’s new thrust areas in infrastructure and technology products related to infrastructure.

Commenting on this development, Mr L.P Sashikumar, Managing Director, Goldstone Teleservices Limited said, “There are many emerging opportunities that the company is looking at and a name that is more in line with the target business was needed.”

Goldstone Teleservices has achieved a turnover of Rs. 280 million against Rs.108 million registering a growth of 260%, by the end of second quarter. There has been a rise in net profit from Rs.10.1 million to Rs 41.2 million registering a growth of 400%.

“Currently the R and D center is working on the development of various high performance Silicone rubber based Polymer compounds for different electrical applications. Recently the company has developed a Field Joint Coating System for Oil and Gas Pipeline protection which is manufactured for the first time in India”, added Mr. Sashikumar.

The Company expects to start production of the corrosion protection sleeves for the Oil and Gas Pipelines by the end of the financial year.

The company has started focusing on the export market of Composite Insulators. It is presently executing an export order valued at Rs.10 million to Kenya and expects exports to contribute sizable revenues next year.

To broadbase its Board, the company has also appointed Mr M Gopalakrishna as an Independent Director. A retired IAS officer, he holds administrative and managerial experience of over four decades in the Government and Public Sector power utilities.

Goldstone Infratech Limited

Hyderabad based Goldstone Infratech Limited (formerly Goldstone Teleservices Limited) is part of highly diversified Goldstone Group of Companies.

Goldstone Infratech Limited is an ISO 9001-2000 certified company engaged in the manufacture of Composite Insulators and Telecom Cable Jointing Kits. It was the first company in the country to start manufacture of Composite Insulators and is the only company in India to have facilities for manufacturing Polymer Compounds for complete range of Insulators from 11kv to 400kv. The Company pioneered a revolution in Composite Insulators technology in India through extensive in-house R and D. It’s R and D center is recognized by Department of Scientific and Industrial Research, Govt. of India.

The Company is planning to manufacture and develop value added products in the Power and Energy sector and is in the process of setting up plant for manufacture of Corrosion Protective Sleeves for Oil and Gas Pipeline for which the Polymer Compound has been developed by in-house R and D.

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] 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.39.36
UK Pound	1	Rs.80.31
Euro	1	Rs.57.79

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--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		61

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	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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