MIRA INFORM REPORT

Report Date :

19.10.2007

IDENTIFICATION DETAILS

Name :	DISHNET WIRELESS LIMITED
Registered Office :	5^th Floor, Spencer Plaza, 769 Anna Salai, Chennai – 600 002, Tamil Nadu
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	10.03.1998
Com. Reg. No.:	18-40075
CIN No.: [Company Identification No.]	U74999TN1998PLC040075
Legal Form :	A Closely Held Public Limited Liability Company.
Line of Business :	Provider of Internet Service.

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 12588252
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is a well – established company having satisfactory track. Trade relations are fair. Financial position is satisfactory. Payments are usually correct and as per commitment. The company is doing steady business. It can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	5^th Floor, Spencer Plaza, 769 Anna Salai, Chennai – 600 002, Tamil Nadu
Tel. No.:	91-44-24313065
Fax No.:	91-44-24313036
E-Mail :	kunjabihari.pradhan@aircel.co.in
Website :	www.aircel.com

DIRECTORS

Name :	Mr. Dato Jamaludin Bin Ibrahim
Designation :	Director
Address :	247, Jalan Bungor Rosa, Sierramas, 47000 Sungai Buloh, Selangor Ehsan – 47000, NA, MA
Date of Birth/Age :	03.03.1959
Date of Appointment :	02.09.2006
Directorship in other companies:	CIN of Company: U32201TN1994PLC029608 Name of the Company: Aircel Limited Designation: Director CIN of Company: U74999TN1997PLC039395 Name of the Company: Aircel Cellular Limited Designation: Director CIN of Company: U 72900DL2006PTC146401 Name of the Company: South Asia Communications private Limited Designation: Director CIN of Company: U64202DL2006PTC144852 Name of the Company : Deccan Digital Networks Private Limited Designation: Director
Name :	Mr. Chan Kong Chee
Designation :	Director
Address :	3, Jalan TR6/1, Tropicana Golf and Country Club, 47410 Petaling Jaya, Selangor Darul Ehsan – 47410, NA, MA
Date of Birth/Age :	23.08.1955
Date of Appointment :	02.09.2006
Directorship in other companies:	CIN of Company: U32201TN1994PLC029608 Name of the Company: Aircel Limited Designation: Director CIN of Company: U74999TN1997PLC039395 Name of the Company: Aircel Cellular Limited Designation: Director CIN of Company: U 72900DL2006PTC146401 Name of the Company: South Asia Communications private Limited Designation: Director CIN of Company: U64202DL2006PTC144852 Name of the Company : Deccan Digital Networks Private Limited Designation: Director
Name :	Mr. Raghvendra Madhav
Designation :	Director
Address :	A -154, New Friends colony, New Delhi -110 065, Delhi
Date of Birth/Age :	26.05.1961
Date of Appointment :	02.09.2006
Directorship in other companies:	CIN of Company: U32201TN1994PLC029608 Name of the Company: Aircel Limited Designation: Director CIN of Company: U74999TN1997PLC039395 Name of the Company: Aircel Cellular Limited Designation: Director
Name :	Mr. Laxman Prasad Agarwal
Designation :	Nominee Director
Address :	B, 3-G, PNB Senior Officers Residential Complex, 8 Under Hill Road, Civil Lines, New Delhi – 110 054, Delhi, India
Date of Birth/Age :	05.11.1949
Date of Appointment :	06.01.2006
Name :	Mr. R Chinna Kannan
Designation :	Chief Executive officer
Name :	Mr. Vijay Bhatkar
Designation :	Chairman and Whole Time Director
Address :	29 Vrindavan Co-operative Housing Society Pashan Road, Pune – 411 008, Pune – 411 008, Maharashtra
Date of Birth/Age :	11.10.1946
Date of Appointment :	18.03.1999
Name :	Mr. V Srinivasan
Designation :	Chief Executive Officer and Whole Time Director
Address :	2 B, K G Central Court, 9-11, Jagadambal Street, T Nagar, Chennai – 600 017, Tamil Nadu
Date of Birth/Age :	15.05.1957
Date of Appointment :	27.11.2002
Name :	Mr. Sriram Chandrasekar
Designation :	Chief Operating Officer cum Director
Address :	No. B -1, Saikrupa Apartments, 2^nd floor, No. 5, Sundaram Salai, Raja Annamalaipuram, Chennai – 600 028, Tamil Nadu 600 028
Date of Birth/Age :	05.06.1966
Date of Appointment :	01.09.2003
Name :	Mr. Rohit Chandra
Designation :	Director
Date of Birth/Age :	09.07.1964
Date of Appointment :	10.05.2004
Name :	Mr. A Subramaniam
Designation :	Director
Address :	D -2, 3^rd Floor, Sree Kalki Apartments, 21, Bazullah road, T Nagar, Chgennai – 600 017, Tamil Nadu
Date of Birth/Age :	02.02.1945
Date of Appointment :	10.03.1998
Name :	Mr. V Selvaraj
Designation :	Director
Address :	33, Chokalingam Nagar, Behind DMS office, Gopalapuram, Chennai – 600 086, Tamil Nadu
Date of Birth/Age :	04.08.1939
Date of Appointment :	28.02.2000
Name :	Mr. Charles Mcminn
Designation :	Director
Address :	24627, Olive Tree lane, Los Altos Hills, CA -94024, USA, California, USA
Date of Birth/Age :	02.10.1952
Date of Appointment :	28.02.2000
Name :	Mr. Glen F Post III
Designation :	Director
Address :	100, Century Park Drive Monroe, Louisiana - 71203, USA
Date of Birth/Age :	04.10.1952
Date of Appointment :	28.02.2000
Name :	Mr. Stacey W Goff
Designation :	Alternate director
Address :	100, Century Park Drive Monroe, Louisiana - 71203, USA
Date of Birth/Age :	17.12.1965
Date of Appointment :	07.07.2000
Name :	Mr. T Sivakumar
Designation :	Director
Address :	Flat F, Nu Tech Lakshmi Nilayam, 27/15, Trust Puram II Cross Street, Chennai – 600 024, Tamil Nadu
Date of Birth/Age :	24.02.1963
Date of Appointment :	18.11.2002

KEY EXECUTIVES

Name :	Mr. R Chinna Kannan
Designation :	Chief Executive Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares
Mr. R Chinnakannan	10
Mr. A Subramaniam	24010
Mr. K V P Baskaran	10
M/s Sterling Infotech Limited	23574030
Dr Vijay P Bhatkar	24000
Mr. V Srinivasan	24000
M/s Siva limited	2893820
M/s Westgrove International Holdings Limited	2000000
M/s I Q Investments Limited	1258250

Equity Shares Breakup (Percentage of Total Equity):

Sr No.	Category	Percentage
1	Bodies corporate	100.00

BUSINESS DETAILS

Line of Business :

Provider of Internet Service.

GENERAL INFORMATION

Bankers :

Il and FS Trust Company limited Address: IL and FS financial Centre, plot No. C22 G block Bandra – Kurla Complex, Bandra (East), Mumbai – 400 051, Maharashtra, India Email: t_r_biju@ilfsinida.com

Banking Relations :	Satisfactory
Auditors :
Name :	Price Waterhouse Chartered Accountants
Address :	32, Khader Nawaz Khan Road, Nunganbakkam, Chennai – 600 006, Tamil Nadu
Holding Company:	· Aircel Limited · Sterling Infotech Limited
Associates/Subsidiaries :	· Aircel Televentures Limited · Aircel Limited · Aircel Cellular Limited · Barista Coffee Company Limited · Dishnet Wireless (Mauritius) limited · Aiwo Limited · Fresh and honest café Limited · Siva Compulink Limited · Sterling Futures and Holidays Limited · IQ Investments Limited · Sterling SAT Television Limited · Sterling ETH Trust · Westgrove International Holdings Limited · Sterling Telecom and Net system Limited · Siva Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
75000000	Equity shares	Rs. 10/- each	Rs. 750.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
29798130	Equity shares	Rs.10/- each	Rs.297.981 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2006 [ 9 months	31.03.2006 [12 months]	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		297.981	297.981	297.981
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		3082.131	3822.666	3819.449
4] (Accumulated Losses)		[233.049]	0.000	0.000
NETWORTH		3147.063	4120.647	4117.430
LOAN FUNDS
1] Secured Loans		3341.877	2653.634	2151.238
2] Unsecured Loans		5962.600	2700.000	0.000
TOTAL BORROWING		9304.477	5353.634	2151.238
DEFERRED TAX LIABILITIES		355.025	212.468	88.768
TOTAL		12806.565	9686.749	6357.436
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		6875.413	4126.759	1736.884
Capital work-in-progress		6333.672	2283.115	1023.192
INVESTMENT		0.000	0.000	645.544
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	84.563	12.517	0.000
	Sundry Debtors	151.471	275.622	78.994
	Cash & Bank Balances	4968.583	7553.817	5188.255
	Other Current Assets	24.876	56.594	0.000
	Loans & Advances	1149.437	432.774	709.777
Total Current Assets		6378.930	8331.324	5977.026
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	6591.807	4979.676	3025.211
	Provisions	189.643	65.773
Total Current Liabilities		6781.450	5045.449	3025.211
Net Current Assets		[402.520]	3276.875	2951.816
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		12806.565	9686.749	6357.436

PROFIT & LOSS ACCOUNT

PARTICULARS		31.12.2006 [ 9 months]	31.03.2006 [12 months]	31.03.2005
Sales Turnover		2067.146	1552.070	1558.454
Other Income		337.849	287.368	257.934
Total Income		2404.995	1839.438	1816.388
Profit/(Loss) Before Tax		[822.068]	147.955	747.979
Provision for Taxation		151.515	3.217	301.491
Profit/(Loss) After Tax		973.583	144.738	446.488
Imports :
	Capital Goods	0.000	0.000	87.923
	Inventories and Maintenance Spares	0.000	0.000	30.961
Total Imports		0.000	0.000	118.884
Expenditures :
	Cost of goods sold	0.000	0.000	50.759
	Purchases made for re-sale	46.724	9.580	0.000
	Operating and administrative Expenses	0.000	0.000	774.492
	Personnel Expenses	0.000	0.000	96.460
	Selling and Marketing expenses	0.000	0.000	91.365
	Salaries, Wages, Bonus, etc.	320.898	301.470	0.000
	Managerial Remuneration	0.965	21.682	0.000
	Payment to Auditors	4.263	1.000	0.000
	Interest and finance charges	298.353	136.408	21.183
	Insurance Expenses	2.306	2.403	0.000
	Power & Fuel	197.077	66.055	0.000
	Depreciation & Amortization	778.131	376.670	34.146
	Other Expenditure	1.578	776.215	0.000
Total Expenditure		3227.063	1691.483	1068.405

KEY RATIOS

PARTICULARS		31.12.2006 [ 9 months]	31.03.2006 [12 months]	31.03.2005
PAT / Total Income	(%)	40.48	7.86	0.02
Net Profit Margin (PBT/Sales)	(%)	[39.76]	0.09	47.99
Return on Total Assets (PBT/Total Assets}	(%)	[4.19]	1.00	8.56
Return on Investment (ROI) (PBT/Networth)		[0.26]	0.03	0.18
Debt Equity Ratio (Total Liability/Networth)		5.11	2.52	1.25
Current Ratio (Current Asset/Current Liability)		0.94	1.65	1.97

LOCAL AGENCY FURTHER INFORMATION

HISTORY and BUSINESS:

A) Significant Accounting Policies and Note to Accounts:

Background

Dishnet Wireless limited (‘Dishnet’ or the Company) formerly known as Dishnet DSL Limited, a subsidiary of sterling Infotech Limited was incorporated under the Companies act, 1956 in March 1998 with its registered office at chennai

The company has been in the business of providing commercial Internet access services for which the Company has obtained an all India Category – A license from the Department of Telecommunication (DOT). The license is for a period of 15 years and is renewable at the discretion of (DOT. The Company commenced its Internet service operations in March 1999. During April 2002, the company has obtained an all India to operate Internet Telephony services from the Department of Telecommunication DOT).

The company has hived off its Wireline ISP Business on 30 th arch 2004 by way of Slump sale to Videsh Sanchar Nigam Limited. During the current year, the company has forayed into provision of Broadband Wireless Internet access using Wi – Max and Wi –Fi technologies.

The company is also into Project Management Services in Telecommunications

During the year, the company has obtained licenses under Unified access Services (UAS) issued by the Department of telecommunications, Government of India fro seven Telecom circles namely West Bengal, Bihar, Orissa, North East, Assam, Jammu Kashmir and Himachal Pradesh. The license is for a period of 20 years and is renewable at the discretion of Department of telecommunication (DOT) during the year; the company’s GSM division commenced commercial operations, in two Telecom circles, namely State of Assam and Jammu and Kashmir, on 30^th and 31^st March 2005, respectively.

Revenue Recognition:

Telecom Services Group Business

a) Revenue from project management services is recognized proportionately to the extent of completed sites, using percentage of completion method.

b) Revenue from vendor negotiation contracts is recognized on a pro data basis expected period of rendering such services.

Cellular operations:

a) Postpaid Schemes:

Revenue from airtime and rentals is recognized during the period in which the service is rendered activation charges as income when the subsidiaries are activated on the network.

b) Enterprises Wireless Internet Services Business:

Revenue from sale of internet Access Keys is recognized based on the usage or validity period whichever is earlier.

Enterprise Wireless Internet Services Business:

Revenue from sale of Internet access Keys is recognized based on the usage or validity period whichever is earlier

Corporation identity number or foreign company registrations number of the company	U74999TN1998PLC040075
Name of the company	DISHNET WIRELESS LIMITED
Address	5^TH Floor Spencer Plaza, 769 Anna Salai, Chennai – 600 002, Tamil Nadu, India
This Form is for	Modification of charge
Type of Charges	· Immovable property · Any interest in immovable property · Floating charge
Particular of the charge holder	Il and FS Trust Company limited Address: IL and FS financial Centre, plot No. C22 G block Bandra – Kurla Complex, Bandra (East), Mumbai – 400 051, Maharashtra, India Email: t_r_biju@ilfsinida.com
Nature or description of the instrument creating charge	· Deed of hypothecation over movables dated November 4, 2006 · Equitable Mortgage by deposit of title deeds dated November 2, 2006
Date of the instrument creating charge	04.11.2006
Amount Secure by the charge	Rs.12222.000 millions
Brief of the principal terms and conditions and extent and operation of the charge	Rate of Interest; Not Applicable Terms of repayment: Not applicable Margin: Not applicable Extent and operation of the charge: The charge operates as security by way of first pari passu charge and mortgage among the rupee lenders and guarantees for the repayment of the principal amount of the rupee Loan facility / letter of credit and guaranty facility including interest, charges cost and expenses and all other amount payable Others: Not applicable
Short particulars of the Property charged	All the movable and immovable properties described in the schedule of the deeds (enclosed)
Particulars of the presenr modification	In addition to the indenture of mortgage over the movable and immovable properties created in favour of the security trustee a deed of hypothecation is created over the movable property and mortgage by way of deposit of title deeds over the immovable property is created in favour of the security trustee for securing the term loan facilities and the guarantees facilities availed by the company

FIXED ASSTES:

· Tangible assets

· Freehold Land

· Building

· Building on Leasehold

· Plant and Machinery

· Office Equipment

· Furniture and fitting

· Motor Vehicles

· Intangible assets

· System software

· Indefeasible Right to use Bandwith Capacity

· Entry fee towards license for cellular Operations

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.39.79
UK Pound	1	Rs.84.41
Euro	1	Rs.56.87

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
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	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		54

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