MIRA INFORM REPORT

Report Date :

01.01.2007

IDENTIFICATION DETAILS

Name :	ZEE TELEFILMS LIMITED
Registered Office :	135, Continental Building, 135, Dr. Annie Besant Road, Worli, Mumbai - 400 018, Maharashtra
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	05.01.1983
Com. Reg. No.:	11-28767
CIN No.: [Company Identification No.]	L912132MH1982PLC028767
TAN No.: [Tax Deduction & Collection Account No.]	MUMZ00074E
PAN No.: [Permanent Account No.]	AAACZ0243R
Legal Form :	Public limited liability company. The company's shares are listed on the Stock Exchanges.
Line of Business :	Supplying of software for television programmes. Subject is India’s first and largest vertically integrated media & entertainment company with its operations spread across more than 10 countries worldwide including India, the U.S.A., U. K., Europe, Africa, Caribbean, Canada, Australia, Middle East, and a few South Asian countries.

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 60000000
Status :	Good
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is a well established and reputed owners of "ZEE TV Channel" which has been immensely successful in last 4 years. However, in the current year the company's channel faces threat from STAR TV (KBC Fame) and SONY. The company's profitability is expected to be low in future. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	135, Continental Building, 135, Dr. Annie Besant Road, Worli, Mumbai - 400 018, Maharashtra, India
Tel. No.:	91-22-2496 5609 / 11 / 16 / 2493 9011
Fax No.:	91-22-2496 4334/24931938
E-Mail :	dasa@zeenetwork.com
Website :	http://www.zeetelevision.com
Corporate Office :	Chintamani Plaza, Andheri Kurla Road, Andheri [East], Mumbai – 400099, Maharashtra, India
Tel. No.:	91-22-56971234
Fax No.:	91-22-56976531
Branches :	NATIONAL Ø No. 46, K. Bharathi Dasean Road, Alwarpet, Chennai – 600018, Tamil Nadu, India Tel. No. 91-44-24320616 Fax No. 91-44-24640592 Ø Manasarovar, 3^rd Floor, 3-B, Camac Street, Kolkata – 700016, West Bengal, India Tel. No. 91-33-22467554 Fax No. 91-33-22463416 Ø No. 39, United Mansions, 3^rd Floor, M. G. Road, Bangalore – 560001, Karnataka, India Tel. No. 91-80-5599999 Fax No. 91-80-5323526 Ø No. 5, Aashiana Bunglow, Premchand Nagar Road, Ahmedabad – 380015, Gujarat, India Tel. No. 91-79-6870060 Fax No. 91-79-6870669 Ø 6-2-929, D. B. Enclave, Raj Bhavan Road, Kharitabad, Hyderabad – 500004, Andhra Pradesh, India Tel. No. 91-40-23372323 Fax No. 91-40-23372822 Ø J – 27, South Extension, Part – 1, New Delhi – 110 049, INDIA Tel. No.: 91-11-2461 0834 Fax No. 91-11-246408836/0839 Ø Filmcity 19, Sector 1/6-A, Noida – 201 301 Uttar Pradesh, India Tel. No.: 91-120-24511064 Fax No. 91-120-25415240 Ø New Prakash Cinema Building, N. M. Joshi Marg, Delisle Road, Near Pragati Industries, Mumbai – 400013, Maharashtra, India Tel. No. 91-22-23061726/27 Fax No. 91-22-23008501 Ø B-10, Essel House, Industrial Area, Lawrence Road, New Delhi – 110035, India Tel. No. 91-11-27101145 Fax No. 91-11-27106128 Ø Chintamani Plaza, 4^th Floor, Andheri – Kurla Road, Andheri [East], Mumbai – 400099, Maharashtra, India Tel. No. 91-22-28369887/88 Fax No. 91-22-28369886 Ø 5^th Floor, Raddison Plaza, N H –8, New Delhi – 110037, India Tel. No. 91-11-26779343/45 / 2836 9887 / 88 Fax No. 91-11-26779340/50 / 2836 9886 INTERNATIONAL Ø 1615, W Abram St., Ste 200 C-E, Arlington, Texas- 76013, USA Tel. No.: 817-274 2933 Fax No.: 817-274 4845 Ø 7, Belvue Business Centre, Belvue Road, Northolt, Middlesex UB5 5QQ, London, United Kingdom Tel. No.: 44-208 839 4000 Fax No. 44-208 8458603 Ø 272, Oak Avenue, Ground Floor, Atrium Terraces, Randburg 2194, South Africa Tel. No.: 27-11 7810450 Fax No. 27 – 11 7813347 Ø Mr. Deepak Jain, Asia Today Limited, 1201, Asia Standard Tower, 59-65, Queen’s Road, Central Hong-Kong Tel. No.: [852] 2868 9060 Fax No. [852] 2801 4346 Ø Mr. Vijay Parab, Expand Fast Holding Limited, 500, Rifle Range Road, 01-09 Bukit Timah Satellite, Earth Station, Singapore – 588-397 Tel. No. [656] 4669331 Fax No. [656] 4668837 Ø Ware House No. A3-36, P.O. Box 8009, SAIF Zone, Sharjah, United Arab Emirates Tel. No.: [971] 65570771 Fax No. [971] 65572397 Ø Suite 302, 781, Pacific Highway, Chatswood, NSW 2067, Australia Tel. No.: 612 9419 8522

DIRECTORS

Name :	Mr. Subhash Chandra
Designation :	Chairman & Managing Director
Name :	Mrs. Laxmi Narain Goel
Designation :	Whole Time Director
Name :	Mr. Punit Goenka
Designation :	Whole Time Director
Name :	Mr. Ashok Kurien
Designation :	Director
Name :	Mr. B. K. Syngal
Designation :	Director
Name :	Mr. D. P. Naganand
Designation :	Director
Name :	Mr. Nemi Chand Jain
Designation :	Director
Name :	Mr. Rajan Jetley
Designation :	Director
Name :	Mr. M Y Khan
Designation :	Director
Name :	Mr. Gulam Noon
Designation :	Director

KEY EXECUTIVES

Name :	Mr. M Lakshminarayanan
Designation :	Company Sectary
Name :	Mr. Pradeep Guha
Designation :	CEO
Name :	Mr. Abhijit Saxena
Designation :	Zee TV
Name :	Mr. Ajay Kumar
Designation :	Zee Telugu
Name :	Mr. Amitabh Kumar
Designation :	Technology
Name :	Mr. Arun Khaitan
Designation :	Education
Name :	Mr. Ashish Kaul
Designation :	Corporate Brand Development
Name :	Mr. Bharat Ranga
Designation :	Zee Cinema and PAC
Name :	Mr. Himanshu Mody
Designation :	Zee Sports
Name :	Mr. Hitesh Vakil
Designation :	Finance
Name :	Mr. Indranil Chakravarti
Designation :	Zee Cafe, Zee Studio and Zee Trendz
Name :	Mr. Irswin Balvani
Designation :	Zee Muzic
Name :	Mr. Jawahar Goel
Designation :	SitiCable and Dish TV
Name :	Mrs. Laxmi Narain Goel
Designation :	Zee News and Zee Business
Name :	Mr. Nitin Vaidya
Designation :	Zee Marathi, Zee Bangla, Zee Gujarati and Zee Smile
Name :	Mr. Rabindra Narayan
Designation :	Zee Punjabi
Name :	Mr. Sanghamitra Ghosh
Designation :	Human Resources
Name :	Mr. Sanjay Jagtap
Designation :	Legal
Name :	Mr. Siddharth Jain
Designation :	Distribution

MAJOR SHAREHOLDERS

As on 30^th June 2006

Names of Shareholders	No. of Shares	Percentage of Holding
Individuals / HUF	4,872,000	1.18%
Bodies Corporate	91,964,204	22.18%
Bodies Corporate (OCB)	93,933,402	22.66%
Mutual Funds and UTI	49,243,267	11.88%
Financial Instiitutions / Banks	197,476	0.05%
Insurance Companies	30,401,313	7.33%
Foreign Institutional Investors	118,982,144	28.70%
Any other (Trust)	10,510	0.00%
Bodies Corporate	9,628,263	2.32%
Individuals holding shares upto Rs. 0.1 Millions in nominal value	14,045,714	3.39%
Individuals holding shares in excess of Rs. 0.1 Millions in nominal value	500,000	0.12%
Any other overseas Bodies Corporate and Foreign Companies	769,039	0.19%
Total	414,547,332	100.00%

BUSINESS DETAILS

Line of Business :	Supplying of software for television programmes. Subject is India’s first and largest vertically integrated media & entertainment company with its operations spread across more than 10 countries worldwide including India, the U.S.A., U. K., Europe, Africa, Caribbean, Canada, Australia, Middle East, and a few South Asian countries.
Products :	Product Description - Item Code (ITC Code) Recorded Video Cassettes – 85249001

GENERAL INFORMATION

No. of Employees :	1500
Bankers :	Ø Standard Chartered Bank Ø Jammu & Kashmir Bank Ø BMP Paribas Ø ICICI Bank Limited Ø HDFC Bank Limited
Facilities :	--

Banking Relations :	Satisfactory
Auditors :	MGB and Company Chartered Accountant
Subsidiaries :	Ø E-Connect Limited Ø Programme Asia Trading Company Limited Ø El Zee Television Limited Ø Dakshin Media Limited Ø Kaveri Entertainment Limited Ø Siti Cable Network Limited Ø Zee Interactive Multimedia Limited Ø Zee Interactive Learning Systems Limited Ø Asia T.V. Limited, United States of America Ø Zee TV USA, Inc. Ø Asia TV (USA) Limited Ø Asia TV (Africa) Limited Ø Zee TV South Africa (Proprietary) Limited Ø Software Suppliers International Limited Ø Zee Multimedia Worldwide Limited, Mauritius Ø Zee Multimedia Worldwide Limited, BVI
Associates :	Ø Siticable Network Limited* Subsidiary 236,562 Ø Zee Turner Limited, Subsidiary 14,060 Ø Zee Network Employees Welfare Trust Others Ø Padmalaya Telefilms Limited Ø Zee Sports Limited Ø Asia TV Limited Ø Asia Today Limited

CAPITAL STRUCTURE

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
412500000	Equity Share	Rs. 1 each	Rs. 412.500 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		412.500	412.505	412.438
3] Reserves & Surplus		15036.900	20955.000	20053.175
NETWORTH		15449.400	21367.505	20465.613
LOAN FUNDS
1] Secured Loans		346.200	832.915	1478.755
2] Unsecured Loans		4495.900	4388.000	1201.344
TOTAL BORROWING		4842.100	5220.915	2680.099
DEFERRED TAX LIABILITIES		0.000	0.000	15.169
TOTAL		20291.500	26588.420	23160.901
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1075.400	1680.658	1456.649
Capital work-in-progress		77.600	111.707	25.943
INVESTMENT		13448.200	15475.672	15171.701
DEFERREX TAX ASSETS		0.000	55.172	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1667.800	7.476	23.657
	Sundry Debtors	2146.300	2866.339	2040.229
	Cash & Bank Balances	237.500	386.046	279.162
	Other Current Assets	0.000	1811.089	1509.874
	Loans & Advances	6136.800	8339.490	6086.191
Total Current Assets		10188.400	13410.440	9939.113
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	3968.700	3373.652	2573.091
	Provisions	535.600	785.027	912.202
Total Current Liabilities		4504.300	4158.679	3485.293
Net Current Assets		5684.100	9251.761	6522.826
MISCELLANEOUS EXPENSES		6.200	13.550	52.788
TOTAL		20291.500	26588.520	23160.901

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	8932.100	6930.712	5714.532
Profit/(Loss) Before Tax	1030.300	1622.725	1153.139
Provision for Taxation	339.500	0.000	(30.600)
Profit/(Loss) After Tax	690.800	1622.725	1183.739
Export Value	NA	651.016	1438.358
Import Value	NA	654.656	346.544
Total Expenditure	8929.700	4091.092	3370.861

QUARTERLY RESULTS

PARTICULARS	30.06.2006 (1^st Quarter)	30.09.2006 (2^ND Quarter)
Sales Turnover	2301.400	2874.200
Other Income	138.500	158.300
Total Income	2439.900	3032.500
Total Expenditure	2059.500	2795.100
Operating Profit	380.400	237.400
Interest	103.900	47.200
Gross Profit	276.500	190.200
Depreciation	33.800	33.500
Tax	86.700	46.800
Reported PAT	156.000	109.900

200606 Quarter 1 –

Expenditure Includes Programming & Operating Cost Rs 1523.20 million Staff Cost Rs 156.20 million Selling & Other Expenses Rs 380.10 million Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter 01 Complaints Received during the quarter 63 Complaints disposed off during the quarter 64 Complaints unresolved at the end of the quarter Nil 1. During the quarter, FCCBs aggregating US $ 8.68 million have been converted into equity shares resulting in increase in the paid up capital of the Company by 1,931,083 equity shares of Re 1 each. 2. The Schemes of Arrangement for demerger of news and cable business undertakings, (appointed date being March 31, 2006) approved by the Board of Directors of the Company on March 29, 2006 and that of Direct Consumer Business undertaking of the company (appointed date being April 01, 2006), approved by the Board of Directors of the Company on April 27, 2006 have been filed with Hon'ble High Court at Mumbai. Pursuant to orders dated June 16, 2006, meetings of equity shareholders of the Company are scheduled to be held on July 25, 2006 for approving the arrangements embodied in the schemes. Pending approvals of shareholders / Hon'ble High Court, no adjustments are carried out to these accounts for demerger of undertakings and related adjustments to securities premium account. 3. Pursuant to Accounting Standard 15 (Revised) on 'Employee Benefits' (AS-15) being mandatory with effect from April 01, 2006, the additional obligation as on March 31, 2006 amounting to Rs 4.90 million (net of deferred tax) has, in accordance with the transitional provision of AS-15, been debited to General Reserve. 4. During the quarter, the Company was successful in acquiring the composite Overseas Global Media Rights from the Board of Control for Cricket in India for an amount of US$ 219.15 million for certain cricket matches to be played during 5 years upto March 31, 2011. 5. The Company's investment in 25 FPS Media Private Limited, a subsidiary engaged in production of television programming for the company, is intended to be disposed off. Accordingly, its financials are not consolidated in these results. Previous year's figures are also not comparable to that extent. 6. Segment information has not been presented in the stand-alone financial statements as permitted by Accounting Standard 17, as the Company has presented segmental information on the basis of the consolidated accounts. 7. Previous figures have been reclassified / regrouped wherever necessary to conform to current period classification. 8. The Statutory Auditors have carried out a 'Limited Review' of the standalone financial results for the quarter ended June 30, 2006. 9. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors, in its meeting held on July 24, 2006.

200609 Quarter 2 -

Expenditure Includes Programming & Operating Cost Rs 2226.10 million Staff Cost Rs 134.30 million Selling & Other Expenses Rs 434.70 million Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 46 Complaints disposed off during the quarter 46 Complaints unresolved at the end of the quarter Nil 1. During the financial year 2006-07, till date FCCBs aggregating US$ 77.20 million have been converted into equity shares, resulting in increase in the paid up capital of the Company by 17,175,105 (11,019,212 equity shares on conversion of US$ 49.53 million FCCB's during the quarter ended September 30, 2006) equity shares of Re 1 each. 2. The Schemes of demerger of news and cable business undertakings, (appointed date being March 31, 2006) and that of Direct Consumer Business undertaking of the company (appointed date being April 1, 2006), and the resultant deficits required to be adjusted to securities premium account as per section 391 to 394, 78 and 100 to 103 of the Companies Act 1956 were approved by the members of the Company in the meetings held on July 25, 2006. Pending approval of Hon'ble High Court(s), no adjustments are carried out to these accounts for demerger of undertakings and related adjustments to securities premium account. 3. Losses from New Businesses as at September 30, 2006 includes operating losses of Rs 926.1 million on account of Zee Sports. 4. Segment information has not been presented in the stand-alone financial statements as permitted by Accounting Standard 17, as the Company has presented segmental information on the basis of the consolidated accounts. 5. Previous figures have been reclassified / regrouped wherever necessary. 6. The Statutory Auditors have carried out a 'Limited Review' of the standalone financial results for the quarter ended September 30, 2006. 7. The above results were reviewed by the Audit Committee and taken on record by the Board of Directors, in its meeting held on October 26, 2006

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	0.27	0.19	0.11
Long Term Debt-Equity Ratio	0.26	0.16	0.05
Current Ratio	2.56	2.55	1.93
TURNOVER RATIOS
Fixed Assets	4.81	3.35	3.21
Inventory	4.77	3.86	3.44
Debtors	3.32	2.64	1.96
Interest Cover Ratio	8.36	16.07	6.06
Operating Profit Margin(%)	15.86	43.05	46.38
Profit Before Interest And Tax Margin(%)	14.08	40.90	44.41
Cash Profit Margin(%)	10.10	27.22	24.79
Adjusted Net Profit Margin(%)	8.31	25.07	22.82
Return On Capital Employed(%)	4.99	10.66	6.79
Return On Net Worth(%)	3.75	7.76	3.87

STOCK PRICES

Face Value	Rs. 10.00/-
High	Rs. 295.70/-
Low	Rs. 289.00/-

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Zee Telefilms Limited was founded in October 1992 as a content supplier for Zee TV - India's first Hindi satellite channel. It was promoted by Subhash Chandra, one of India's leading entrepreneurs, who sought to establish Zee as an 'infotainment' company focused on the convergence of media and communications.

Early in Zee's history, Subhash Chandra and the STAR group of companies entered into a joint venture for television broadcasting in India. When News Corp Limited acquired the satellite distribution business of Star, News Corp de facto became a partner of Zee. To further develop the relationship, News Corp and Zee subsequently co-founded Siticable one of the leading cable MSOs. In March 2000, after a six-year joint venture, Zee bought News Corp's stake in both the broadcasting business and Siticable.

People at Zee have built a diverse portfolio of leading businesses over time and have taken a host of strong Company-wide initiatives that drive growth and increases efficiency. Zee has a very strong consumer-connect and a set of common values that allows it to face any environment with confidence.

 Zee is the largest vertically integrated Media and Entertainment Company in India, which serves more than 120 countries and reaches more than 300 million viewers across the globe in seven different languages. The company has built a valuable portfolio of television programming assets including Zee TV, Zee Cinema, Zee Music, Zee News and the regional programming portfolio. During 2005 the company has lanuched Zee Sports, Zee Smile and Zee Telugu, Zee Business, Zee Kashmir (a one hour slot on Zee Punjabi). These network channels are now available on India's first Direct to Home platform, Dish TV. 

 Zee extends South Asia beam of Zee TV to Hong Kong, Thailand, Philippines, Indonesia and Japan. There are over 300 KidZee centres internationally. 

 The network today symbolize and serves diverse demo-graphics to provide the basic framework to give vent and shape to the aspirations of millions of South Asians; the aspirations in terms of hunger for entertainment, hunger for news, information and knowledge and appetite for exposure to the rich cultural heritage of India and its diverse language and regions.  

 Zee TV upto 1999 has been operating four channels, three of which were being played out of STAR TV facility in Hong Kong on lease basis. With the growth of the network into eleven channels, the launch of the DTO bouquet and the Alpha channels including the English channels, a decision was taken to install a fully owned facility in Singapore which can play-out ten channels. This facility was set up in a record time of three months and has been fully operational since middle of March 2000. 

 Essel studios in Noida is the hub of its News production facilities for Zee news channel. The facility has two large studios where all the news bulletins are produced. The same is then sent to Hong Kong through an earth station installed by VSNL in the same premises. This contribution is downlinked in Hong Kong and used for broadcasting on Zee News Channel. 

 Zee Interactive Learning Systems provides education through franchise network, TV, Internet, strategic tie-ups with universities, colleges, and companies. 

 The company's 100% subsidiary - Zee Multimedia Worldwide- BVI is the 100% holding company of Zee Multimedia Worldwide - Mauritius and others. The Mauritius company, in turn, has 5 wholly-owned subsidiaries. They are namely, Asia TV Limited, UK (space selling, broadcasting of Zee channels in UK and Europe), Zee TV Inc., USA (broadcasing of Zee channels in USA), Asia TV Africa (broadcasting of Zee channels in Africa through Asia TV SA Proprietary Limited), Zee Telefilms International (space seller in Middle East), and Software Suppliers International, UAE (for syndication of programmes outside India). 

 Of this, Zee TV Inc. USA has got another subsidiary called Asia TV (USA) which is the space seller in USA. 

 In September 1999, ZTL acquired Zee Multimedia Worldwide Limited (ZMWL). Following this acquisition, all the international operations including the broadcasting business of ZMWL came under ZTL's control. ZTL acquired NewsCorp's 50% stake in Asia Today Limited (ATL), Siticable, and Programme Asia Trading Company Limited and now owns 100% of these businesses. The consideration paid for the acquisition was USD 296.51 million 

 Zee group pioneered Siticable in the year 1994 to provide cable TV service. Siticable acquired strong presence in the Indian market with its city specific channel called Siti channel, which provides content and programmes based on city's civic issues and social problems. 

 Zee has entered into a joint venture with MGM, US, for its English movie channel.  

 In May, 2001, Zee Telefilms has decided to induct a strategic partner, preferably an international media major to strengthen its financial and technical strengths to achieve high growth in the field of convergence. ZTL has converted its flagship Zee TV into a pay channel with effect from 10 June 2001. 

 Zee Telefilms has come out with Open offer to acquire 23,39,900 fully paid-up equity shares of Rs 10/- each of ETC Networks. It represens 20% of the voting equity share capital at a price of Rs 31.52/- per fully paid up equity share. The issue opens on 3rd Apr. 2002 and closes on 3rd May 2002. 

 In order to optimise shareholders value, the Board of Directors of Zee Telefilms cleared a corporate restructuring proposal as a result of which eleven subsidiaries of Zee would be either merged with it or wound up, subject to necessary regulatory approvals. The companies that are proposed to go are E-connect India, Programme Asia Trading Company, Elzee Television, Kaveri Entertainment, Dakshin Media, Winterheath Company, Mauritius, Hokushan Trading, Hongkong, Expand Fast Holdings, BVI, Zee Multimedia Worldwide, BVI, Asia TV, USA, Zee TV SA, South Africa.

 As a part of this corporate restructuring, in fiscal year 2002-03 The company has merged its subsidiaries companies, Kaveri Entertainment Limited, Elzee Television Limited and Programme Asia Trading Company Limited with itself. 

 In the year 2003-04 the company has merged Dakshin Media Limited with itself and Asia TV (Africa) Limited, Software Supplies (International) Limited, Zee Telefilms International Limited & Zee MGM Limited was merged with Asia Today Limited, Mauritius. In addition, Asia TV (Netherlands) Limited BVI was wound up.

 During 2005, Expand Fast Holdings Limited, One of the overeseas subsidiaries, merged with Asia Today Limited, Mauritius (ATL). ATL the wholly subsidiary of Winterheath Company Limited (WCL) merged with its holding company. After this merger WCL changed its name to Asia Today Limited ATL has acquired 100% equity stake in Pan Asia Infrastructure Limited, a Mauritius based company. 

 In 2004-05 the company has divested its equity stake of 63.80% in Padamalaya Enterprises Private Limited (PEPL), which was the holding company of Padamalaya Telefilms Limited (PTL) due to their irregularities in the management. The company divest its equity in PEPL stake for a consideration, discharged by way of transfer of two pieces of land admeasuring 20339 sq. mtrs., situated at Jubliee Hills Hyderabad. Further ETC Networks Limited has amalgamated with Econnect India Limited with effect from 1st April 2003 in the ratio of 1:1. Both the companies are the subsidiaries of the company. Subsequent to this amalgamation the name of Econnect has been changed to ETC Networks Limited 

 The subsidiaries of ZTL are 25FPS Media Private Limited, Central Bombay Cable Network Private Limited, ETC Networks Limited, Integrated Subscriber Management Services Limited, New Era Entertainment Network Limited, Siti Cable Network Limited (SITI), Siti Cable Broadband South Private Limited, Zee Turner Limited, Zee Interactive Learning Systems Limited, Zee Sports Limited, Asia Business Broadcasting (Mauritius) Limited, Asia TV Limited UK, Asia Today Limited, Expand Fast Holdings (Singapore) Pte. Limited, Pan Asia Infrastructure Limited, Zee TV USA, Inc., Zee TV South Africa (Proprietary) Limited, Zee Multimedia Worldwide (Mauritius) Limited and Zee Multimedia Worldwide Limited BVI. Also the company has formed a new subsidiary in Dubai Zee Telefilms Middle East FZLLC and share capital is held by Asia Today Limited

Restructuring of News and Current Affairs Business As reported in the previous years' annual report, due to changes in the Uplinking Guidelines, the Company is required to transfer its business relating to uplinking of News and Current affairs programing on its channels including 'Zee News' to another entity. The Company had sought certain clarification from Government of India, Ministry of Information and Broadcasting regarding structure and modalities of such transfer of business. Recently necessary clarification have been received.

To comply with the guidelines, the Company has entered into a Memorandum of Understanding with Zee News Limited, a company 100% owned by Indian nationals, for transfer of physical infrastructure, the editorial team and other staff related to production and broadcast of News and Current Affairs programs on Zee network channels including the Zee News Channel. Zee News Limited would accordingly have complete news gathering responsibilities as well as editorial control over the News and Current Affairs content. For getting requisite members' approval, an appropriate resolution by Postal Ballot is being moved before the shareholders. Corporate Restructuring of Overseas subsidiaries The Company has initiated various measures to make its corporate structure simple and transparent. During the year under review, Expand Fast Holdings Limited, one of the overseas subsidiaries, merged with Asia Today Limited, Mauritius (ATL). Also, ATL, the wholly owned subsidiary of Winterheath Company Limited (WCL) merged with its Divestment of Equity Stake in Padamalaya Enterprises Private Limited The Company was holding 63.80% equity stake in Padamalaya Enterprises Private Limited (PEPL), which was the holding company of Padamalaya Telefilms Limited (PTL). Mr. G.A. Shesagirirao was the Managing Director and was entrusted with the complete control over the dayto- day management of PTL. Sometime during the year under review the Company came to know about irregularities in the day-to-day management of PTL and PEPL. A detailed investigation, through a reputed firm of chartered accountants, was conducted into the affairs of PTL and PEPL. The investigation revealed that the management of PTL and PEPL were not being conducted in a business like manner and the accounts were not reflective of true and fair view of the state of affairs of the Company. The assets held in PEPL were misappropriated to the detriment of the Company. The Company took immediate measures to recover its investment in PEPL After due deliberations with the promoters of PTL and in order to avoid protracted litigation the Company agreed to divest its entire shareholding in PEPL for a consideration, discharged by way of transfer of two pieces of land admeasuring 20,339 sq. mtrs., situated at Jubliee Hills, Hyderabad. In view of the foregoing, PEPL and its subsidiaries cease to be subsidiaries of the Company.

DIVIDEND: 

 The Directors are pleased to recommend a dividend of Re.1 per equity share, i.e. 100% on par value of Re.1/- each, for the financial year 2005-06. The total outflow for this purpose would be Rs.496 Million (based on the assumption that remaining FCCBs will be converted by dividend payment date), which includes a dividend of Rs.435.000 Million and tax on dividend of Rs.61.000 Million. 

BUSINESS OVERVIEW:

 The Company has entered into a phase wherein the focus is to consolidate as well as to ensure a steady and stable growth. The Company's Zee TV channel, with average weekly GRP of 250 points, has been successful in bridging the gap with No 1 Channel in general entertainment and a clear market leader now in Prime Time slot 9 p.m. to 10 p.m. and 6 p.m. to 8.30 p.m. slots on weekdays. Sa Re Ga Ma Little Champs, Saath Phere, Kasamh Se and Dulhan a few of the key programmes that have bolstered the performance. Launch of Ghar ki Lakshmi_Betiyaan enabled Zee TV channel challenge their competitor's long standing dominance in 10 p.m. slot. Zee Cinema continue to maintain its leadership position and Zee Marathi is a whisker away from gaining leadership position, with leadership already in Prime Time. Zee Bangla which has shown 60% growth is into No. 2 spot and gaining leadership position in 8.30 p.m. to 9.30 p.m. slot. Performance of International channels are also quite encouraging.  

 With GRPs on the rise, the Company has introduced, across channels, a slew of ad sales initiatives like focus on inventory utilization, attracting higher yielding categories of business, etc., which have resulted in revenue growth which is much faster than that of the industry. With the introduction of Conditional Access System in major cities by end of December 2006, the Company hopes to enlarge on its subscription base and consequent increase in subscription revenue as a percentage of overall revenue. 

 The Directors are confident of sustaining profitable growth in the future, more so with the demerger of news, cable and direct consumer service business undertakings, the Company will have greater focus on mass entertainment to continue its market leadership

CHANGE OF NAME: 

 Consequent to the de-merger of various business undertakings of the Company, and with an objective to focus on the entire gamut of entertainment and to give rightful identity to the media entity created at Zee over the past decade, the Board in its meeting held on 27.04.2006 had approved, subject to the approval, change in the name of the Company from Zee Telefilms Limited' to Zee Entertainment Enterprises Limited'. The Company has received confirmation of availability of the new name from the Registrar of Companies, Maharashtra. Appropriate resolution for the approval for the change of the name of the Company is included in the Notice convening the 24th Annual General Meeting. 

OVERVIEW:

 Zee Telefilms Limited is India's first and one of the India's largest vertically integrated media & entertainment companies with its operations spread across more than 10 countries worldwide including India, USA, UK/Europe, Africa, Caribbean, Canada, Australia, Middle East and many South Asian countries.

 The Company was formed in 1982. It had its IPO in 1993 and is currently listed at the Calcutta, Mumbai and National Stock Exchanges in India. 

 Zee has been a pioneer and a trendsetter in the Industry. It introduced Satellite/Cable Television in India by launching the first private sector television station in 1992. For a decade and a half, Zee has been synonymous with quality TV entertainment for viewers. 'Zee' is a household name today and one of the strongest entertainment brands in India. From fiscal 1995 through fiscal 2006 advertisement revenues increased from Rs.1497 million to Rs.6566 million. 

International Operations: 

 Zee generates subscription revenue through its Broadcasting operations and also from the licensing of broadcasting rights of its channels in certain international markets. The Company beams its channels to over 120 countries through various distribution platforms, and has entered into agreements with DTH and local cable operators in each of the countries in which its channels are distributed. Under these agreements, Zee generally receives subscription or licensing fees from these operators and it retains the advertising revenue it sells on its channels. Zee's principal broadcasting operations are, apart from India, in the USA, Canada, Caribbean, UK, Europe, Africa, Middle East and other parts of South Asia. 

In UK and Europe, Zee offers a 5-channel package of Zee TV, Zee Cinema, Zee Music, Zee Gujarati and Zee ETC Punjabi. It has around 168,000 subscribers both on cable and DTH. 

The US operations were started in 1998 and Zee has four channels Zee TV, Zee Cinema, Zee Gujarati and Zee Punjabi with a combined subscriber base of around 261,000. 

Zee's African operations have been steady with a base of approximately 61,000 subscribers for Zee TV.

Zee broadcasts Zee TV and Zee Punjabi in Canada, where it has around 81,000 subscribers. It has another 125,000 subscribers in the Caribbean countries.

Zee has a subscriber base of around 238,000 in the Middle East and of about 242,000 in South East Asia

FINANCIAL POSITION: 

Consolidated Financial Position as on March 31, 2006 as compared to March 31, 2005.  

Sources of Funds: 

Share Capital, Reserves & Surplus: 

Share Capital increased by Rs. 0.111 Millions on account of conversion of FCCBs in to Equity. 

Pursuant to the Scheme of arrangement approved by the shareholders of the Company and by the Honorable High Court, Mumbai, the News and Cable business undertakings of the Company have been transferred to and vested in Zee News Limited (ZNL) and Wire & Wireless (India) Limited (WWIL) respectively, with effect from 31.03.2006. Accordingly the deficit on account of transfer, cancellation of investment and inter company loans and advances, cancellation of Investment in preference shares, diminution in value of equity investment/share application money and other assets aggregating Rs.5990.600 million is adjusted against Securities Premium Account. 

Fixed Assets :

Ø Land ( Leasehold )

Ø Buildings

Ø Plant & Machinery

Ø Equipments

Ø Furniture and Fixtures

Ø Vehicle

Ø Leasehold Improvents

AS PER WEBSITE

Zee Telefilms Limited (Zee) (BSE: ZEE.BO and NSE: ZEE.NS) is India's largest vertically integrated media and entertainment company.

Zee has an integrated range of businesses, encompassing the content-to-consumer value chain of media and entertainment business. Zee is a pioneer in India, in every aspect of content aggregation and distribution through satellite, cable and Internet.

Zee is

The largest producer and aggregator of Hindi programming in the world,

With more than 30,000 hours of original programming in the library

One of the most popular entertainment brands in India. It was ranked

As the ninth most popular brand within a decade of its launch

The largest MSO in India with an estimated reach of 6.5 million househol

One of the largest Indian multiple distribution platforms with an estimated

Reach of 350 million viewers in over 120 countries globally including USA,

Canada, Europe, Africa, the Middle East, South East Asia, Australia and

New Zealand

Zee has many firsts to its credit

• First listed media company in India
• First to launch a Hindi general entertainment channel in India - Zee TV
• First to launch a Hindi cinema channel in India - Zee Cinema
• First to launch a 24 hour Hindi News Channel in India - Zee News
• First to set up MSO operations at a national level - Siticable
• First to corporatise the Hindi film industry - Gadar
• First to launch a regional bouquet of channels - Zee Marathi, Zee Punjabi, Zee Bangla, Zee Gujarati.

Business

Zee Telefilms Limited is the pioneer of satellite broadcasting in India and is one of the first private-sector entrants to the Indian broadcasting industry. It launched its flagship television channel Zee TV, in the year 1992. Since then, it has transformed itself into an integrated media conglomerate with operations spanning the entire media spectrum including television programming; satellite broadcasting; cable distribution; production and distribution of films; music publishing, long distance education and the creation of animation software.

Zee began with producing general entertainment content for the channel Zee TV (primarily in Hindi), which was then broadcast through an associate company in the South Asian region. The mass appeal of the Zee brand has continued to grow and in 1999 it was voted the "ninth most popular brand" in India by A & M magazine.

The company seeks to address the entertainment and information needs of South Asians spread across the globe. Zee boasts its presence in all major markets in the world, including Asia Pacific, the Middle East, the United Kingdom, the United States of America, Africa, the Caribbean Islands and Canada.

Key Milestones

2003:

Launched five new channels for the DTH market viz Action Cinema, Classic Cinema, MX, Premiere Cinema and Smile TV

Entered into a distribution tie-up with Rajshri Pictures for theatrical distriution of films in India

Launched "Trendz"- A premium Fashion & Style channel, targeted at the fashion conscious Indian consumer.

2002:

Acquired controlling stakes in ETC Networks Limited and Padmalaya Telefilms Limited

2001:

Introduced Zee TV and Zee News as pay television offerings "Gadar-Ek Prem Katha" became highest grossing box office movie

2000:

First Cable company in India to launch Internet over Cable services Entered into content distribution joint ventures with MGM and Viacom Launched pay bouquet of channels on the Asian foot print

1999:

Acquired News Corp's 50% stake in joint ventures Launched regional channels

1998:

Launched Zee TV in the US

Launched Zee Cine Awards

1997:

Launched Zee Music (originally known as Music Asia)

1996:

Started first cable channel in India - Siti Channel

Launched Zee TV, Africa

1995:

Commenced Siticable operations

Joint Venture with News Corp

Launched Zee News and Zee Cinema

Zee TV goes global - Launched Zee TV, UK

1992:

Launched Zee TV

Initial Public offering of Zee Telefilms Limited

COMPANY FACTS

As India's first and the country's largest fully integrated media and entertainment company, Zee Telefilms Limited's unique combination of businesses and growth opportunities both in India and globally, give us a unique position in the global media space. From Zee TV to Zee News, from the regional channels to Siticable, their Company brings together the most valuable media brands, which will support their commitment to deliver consistent growth.

Stock Exchange Listing

Equity Shares of the Company are listed on The National Stock Exchange of India Limited (NSE), The Stock Exchange, Mumbai (BSE) and on The Kolkata Stock Exchange Association Limited (CSE)

The Foreign Currency Convertible Bonds (FCCB) of the Company are listed at The Singapore Stock Exchange

Summary Financials (Indian GAAP - FY2005)

Revenue INR 13.6 billion (US$ 291 million)

PAT for the year INR 3.1 billion (US$ 70 million)

EPS INR 7.6 (US$ 0.17)

Capital Employed INR 30.0 billion (US$ 685 billion)

Zee Stock

INR 157.00 [4.00]

Dec 30,05 14:31 hrs IST

Awards

Subhash Chandra awarded the 'Global Indian Entertainment Personality of the Year' by FICCI for 2004.

Subhash Chandra honoured with the "Dadasaheb Phalke Academy

Trophy" for his devoted services to Indian Film Industry in the Satellite Sector - 2003.

Zee Telefilms was among the ten Indian Companies in the Forbes

International 200 Small Best Companies selected from among 20,000 small companies worldwide for the year 2001.

Zee awarded "BSE Award for Maximisation of Shareholders Wealth -

2000"  

Subhash Chandra awarded "Entrepreneur of the Year" by Ernst & Young in 1999

Subhash Chandra awarded "Businessman of the Year" by Business Standard in 1999

Zee awarded "Emerging Company of the Year" by The Economic Times in 1998

The EMMA Award for best digital/cable channel in the United Kingdom for Zee TV by the UK Brand Summit

Zee TV UK was awarded the MACE (Multicultural Awards for Competitiveness and Enterprise - Leadership in Best Practice) sponsored by the UK Trade and Investment.

Zee awarded "Ground Breaker Award from Multichannel News

International for its achievements in developing programme networks and related businesses"

In the Fifth Anniversary issue, Finance Asia, rated Zee Telefilms as the

Fourth best company in Asia and as one of the most successful Asian Corporates in producing value for its shareholders.

ALLIANCEs / PARTNERSHIPs

To accomplish their mission of continued and sustainable growth, in the addition to growing revenues organically they have sought external growth opportunities through acquisitions, alliances and partnerships. They have entered into joint ventures to gain access to content and technology while they have acquired significant stakes in companies, which offered complementary strengths to their Network.

Zee Turner

A 74:26 joint venture between Zee and Turner International to distribute the Zee Turner pay channel bouquet in India and neighboring countries.

ETC Networks

ETC Networks Limited (ETC.BO) is a media company listed on the Bombay stock exchange operating two television channels, ETC Music and ETC Punjabi in India. Zee acquired a 51% stake in June 2002.

Jagjit Singh Kohli appointed as CEO of Siticable Network Limited.

Mumbai, October 3, 2005: Zee Telefilms is pleased to appoint Mr. Jagjit Singh Kohli as the CEO of Siticable Network Limited, a subsidiary of Zee Telefilms Limited.

In this capacity, Mr. Kohli will have the overall responsibility for all revenues and territories of Siticable with a view to develop business and maximize the revenue and collection from each territory. Mr. Kohli will also develop major "triple play" and digitization of cable initiatives for Siticable.

Mr. Jagjit Singh Kohli is a Cable Industry Veteran with 20 years of experience in various capacities. Mr. Kohli founded INCablenet and pioneered the corporatisation of the Cable Industry and the MSO concept. In 1999, Mr.Kohli created WinCable (Hathway) for Raheja Group, which is now a major national MSO besides Siticable and INCablenet

Siticable is the spearhead of Zee Telefilms cable distribution business. There have been many developments in the area of Regulation and Technology and Zee believes it is time to give cable distribution a new thrust. Accordingly, Siticable is poised to pursue new technology business with the renewed focus which will include" triple play" offerings, digitization of cable broadband & other similar initiatives that form the frontiers of cable today. Zee Telefilms is therefore looking forward to reinvention of this business for substantial revenue and enhancement.

Mr.Kohli will be operating out of Mumbai.

dishtv announces an innovative "Har Chhat Par" offer for subscribers

dishtv "Har Chhat Par" offer only at Rs 3,990

Mumbai, April 25 2005: India's first Direct to Home (DTH) service dishtv, which promises to deliver the future of television to Indian homes, announced an irresistible offer with their innovative "Har Chhat Par" scheme. dishtv is offering an exciting range of programming choice with access to more than 74 television channels and 13 radio channels, which include a wide variety of programming for every taste. All this is being delivered with state-of-the-art satellite technology at an incredible price of Rs 3,990.

dishtv "Har Chhat Par" scheme gives consumers more than 86 channels for Rs 3,990, which includes the cost of a digital set top box, satellite dish antenna, installation fees and subscription charges for one year. This special offer is available at all authorized outlets of dishtv across the country and is open for a limited period.

The scheme was launched on April 10 and has received excellent response. Mr. Rajiv Garg, Director, ASC Enterprises Limited, said "Subscribers can now experience the revolution of DTH at an extremely affordable price. For a digital satellite television platform, dishtv at Rs 3,990, offers terrific value with an incredible selection of wide variety of programming, plus a hassle-free service. The "Har Chhat Par" offer from dishtv is positioned to satisfy all who want freedom of choice, excitement of digital quality entertainment and interactive value added services, and at a cost of less than Rs 11 per day."

Under the dishtv 3,990 scheme, customers get the hardware - the dish and the set top box - installed at their home without any additional charge. The "Har Chhat Par" offer includes one year's subscription fee for the Dish Welcome package. The package comprises of a total of 77 channels, which include general entertainment, movies, music, news, sports as well as religious programmes. Popular channels like Zee TV, Zee Cinema, ESPN, Star Sports, CNN, Cartoon Network etc are part of the offering. For only Rs 1,000 extra, the package offered can be expanded to include other popular channels such as additional movie channels, additional sports channels, Pogo, HBO, Zee Studio, Zee Café etc. The dishtv platform thus allows customers a wide choice of viewership and the ability to pay only for what he wants to watch.

Subscribers also get to choose an additional group of channels in their regional language. So viewers can now enjoy channels in Punjabi, Bangla, Gujarati, Marathi, Oriya, Telegu, Tamil, Malayalam and Kannada, along with the Hindi and English programmes. Another additional feature is 13 radio channels that comes along with the "Har Chhat Par" offer.

Direct-to-Home or DTH, the preferred method of watching television throughout the world, is targeted at discerning Indians who demand highest available quality of television viewing as well as at areas which do not have cable television. Installing a dishtv gives the viewers DVD picture quality and stereophonic sound. A huge plus is the guarantee of absolutely no interruptions in the transmission due to disputes with broadcasters as dishtv is a transparent platform.

The dishtv hardware includes a world class Set Top Box which comes with a warranty from the company. Also, in case of any service requirements, a 24 hour helpline is available to all dishtv customers. dishtv has steadily moved towards world class standards of service with a full scope back office providing subscriber management services.

About dishtv

dishtv is India's first Direct-to-Home (DTH) satellite television entertainment service that will revolutionise TV viewing in the country. The cutting edge technology of dishtv allows subscribers to access a variety of digital television channels directly from the satellite, making television viewing a whole new experience.

With a total offering of 113 TV and 13 radio channels, DishTV brings the power of choice to consumers, who get to experience digital entertainment in their language, in packages that suit their preference and to fit their budget.

dishtv is an Essel Group venture. The Essel Group, whose foundation was laid way back in 1976, has metamorphosised into a conglomerate embracing new technology and versatile forms of entertainment. It has a vast range of national and global business interests that include media programming, broadcasting & distribution, packaging, entertainment, online gaming and telecom.

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 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. 44.23
UK Pound	1	Rs. 86.91
Euro	1	Rs. 58.26

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--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	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		55

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