MIRA INFORM REPORT

Report Date :

24.03.2008

IDENTIFICATION DETAILS

Name :	VODAFONE ESSAR SOUTH LIMITED
Formerly Known As :	HUTCHISON ESSAR SOUTH LIMITED
Registered Office :	C-48, Okhla Industrial Area, Phase – II, New Delhi – 110020
Country :	India
Financials (as on) :	31.12.2006
Date of Incorporation :	07.12.1995
Com. Reg. No.:	55-74451
CIN No.: [Company Identification No.]	U74899DL1995PLC074451
TAN No.: [Tax Deduction & Collection Account No.]	DELH05216B
PAN No.: [Permanent Account No.]	AABCB5847L
Legal Form :	A Closely Held Public Limited Liability Company.
Line of Business :	Providing cellular telephone services in the State of Tamilnadu, Karnataka and Andhra Pradesh.

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 3900000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	The company is a Joint Venture of Vodafone and Essar Group. The company has registered heavy losses. Initially however it is quite usual for a telecom company. Available information indicates high financial responsibility of the company and it’s management. Trade relations are fair. Payments are usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	C-48, Okhla Industrial Area, Phase – II, New Delhi – 110 020, India
Mobile No.:	91-9811090001/9811144444/9811398001/ 9811098113
Fax No.:	91-11-26338730
E-Mail :	sundeel.khthuria@hutchindia.com manishsansi@hutch.in
Website :	http://www.hutch.co.in .
Corporate Office 1:	Hutch House, Peninsula Corporate Park, Ganpatrao Kadam Marg, Lower Parel, Mumbai – 400013, Maharashtra
Tel. No.:	91-22-66645000
Fax No.:	91-22-66661222 or 66661200
Corporate Office 2:	C/O Exel India Private Limited, C1 – 44A/173 Santoshpurt, Taratola Link Road, Kolkata, West Bengal, India
Branches :	Located at: Hubli, Mangalore, Mysore, Davangere, Gulbarga, Tumkur Karnataka (Bangalore) Prestige Blue Chip, Ground Floor, Block 1, No – 09, Hosur Road, Bangalore –560029, Karnataka, India Tel : 91-80-5119 3000 Fax : 91-80-5119 3010 Karnataka (Hubli) No. 44, Upper Ground Floor, Laxmibalakrishna Square, Station Road, Hubli 580020, Karnataka Tel : 91-836-236 9853 Fax : 91-836-2369851 Mangalore Oberle Towers, Balmatta Circle, Balmatta Road, Mangalore 575001, Karnataka, India Tel : 91-824-2427789 Mysore 2959, II Floor, “Aishwarya” Arcade, 9^th Cross, Kalidasa Road, V.V. Mohalla, Mysore Tel : 91-9886408681 Davangere No. 266, 1^st Floor, 1^st Main, Bharat Scouts and Guides Towers, Janatha Bazaar Road, P. J. Extension, Davangere-577002, Karnataka Tel : 91 8192 259933/44 Ahmedabad Gujarat Fascel Limited, 601, Sakar-II, Ellisbridge, Ahmedabad 380006, Gujarat Tel : 91-79-26577228/29, 26575990 Delhi Hutch, X-7, Okhla Industrial Area II, New Delhi-110020 Tel : 91-9811000009 Hyderabad 6^th Floor, Varun Towers II, Begumpet, Hyderabad 500016, Andhra Pradesh, India Tel : 91-40-27764600 Fax : 91-40-27764700 Vijaywada Uttam Towers, Labbipet, M.G. Road, Vijayawada 520010 Tel : 91-866-493113 Fax : 91 866 493117 Vishakapatnam Balaji Mangalgiri, VIP Road, Vishakapatnam 530 003, Andhra Pradesh, India Tel : 91-891-760777 Fax : 91-891-760995 Chennai Hutch, 222, TTK Road, Alwarpet, Chennai-600018, Tamilnadu, India Kolkata Kolkata Hutchison Telecom East Limited Constantia Office Complex, 11, Dr. UN Branchmacharis Street, Kolkata-700017, West Bengal, India Tel : 91-9830098241 Jaipur Rajasthan Gaurav Towers, Malviya Nagar, Jaipur, Rajasthan Karnal Kunjpura Road, Karnal-132001, Haryana Tel : 91-9813098130 Lucknow 205-206, Chintels House, 16, Station Road, Lucknow, Uttar Pradesh, India Tel : 91-9839098390

DIRECTORS

Name :	Mr. Foll John Christopher
Designation :	Director
Address :	9^th and 10^th Floor, Suraj Appartments, Opposite American Consulate, BD Road, Mumbai – 400026, Maharashtra.
Date of Birth/Age :	16.08.1956
Date of Appointment :	01.02.2005
Name :	Mr. Foll John Christopher
Designation :	Director
Address :	9^th and 10^th Floor, Suraj Appartments, Opposite American Consulate, BD Road, Mumbai – 400026, Maharashtra.
Date of Birth/Age :	16.08.1956
Date of Appointment :	01.02.2005
Name :	Mr. Asim Ghosh
Designation :	Director
Address :	64 NCPA Apartments, Nariman Point, Mumbai – 400021, Maharashtra, India
Date of Birth/Age :	07.12.1947
Date of Appointment :	27.08.2003
Name :	Mr. Kathuria Sundeep
Designation :	Director
Address :	C-552, 1^st Floor, Defence Colony, New Delhi – 110024,
Date of Birth/Age :	14.11.1965
Date of Appointment :	01.02.2005
Name :	Mr. Rajiv Sawhney
Designation :	Director
Address :	1New, Friends Colony West, New Delhi - 11024
Date of Birth/Age :	18.08.1960
Date of Appointment :	01.02.2005
Name :	Mr. Vikash Saraf
Designation :	Director
Address :	2B, Saker Appartments, 71, Pochkhanawala Road, Worli, Mumbai – 400025, Maharashtra
Date of Birth/Age :	18.12.1968
Date of Appointment :	01.02.2005
Name :	Mr. Frank Sixt
Designation :	Director
Address :	Flat G/B Knights Bridge, Court No. 28, Barker Road, Thepeak, Hong Kong
Date of Birth/Age :	29.11.1951
Date of Appointment :	01.02.2005
Name :	Mr. Lui Dennis
Designation :	Director
Address :	Doplex 5, Dynasty Villa 8, Dynasty Heights, Beacon Hill, Kowloon , Hong Kong.
Date of Birth/Age :	02.03.1951
Date of Appointment :	01.02.2005
Name :	Mr. Geoffrey Carolan
Designation :	Director
Address :	12^th Floor, Urmi 65, Worli Sea Face, Mumbai – 400025, Maharashtra
Date of Birth/Age :	13.03.1966
Date of Appointment :	01.02.2005

KEY EXECUTIVES

Name :	Ms. Neha Sharma
Designation :	Secretary
Address :	D-12, Sarita Vihar, Delhi - 110044
Date of Birth/Age :	19.07.1973
Date of Appointment :	28.01.2002
Name :	Mr. S Ramaniam Balasum
Designation :	Manager
Address :	3A, Kanchana Appartments, 78, ST, Mhrry Road, Chennai – 600028, Tamil Nadu.
Date of Birth/Age :	09.06.1966
Date of Appointment :	31.12.2004
Name :	Mr. Avneesh Khosla
Designation :	Manager
Address :	E – 396, Greater Kailash – I, New Delhi – 110048, India
Date of Birth/Age :	24.11.1968
Date of Appointment :	01.07.2007

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(As on 31.12.2006)

Names of Shareholders	No. of Equity Shares
Hutchison Essar Mobile Services Limited	274199992
Asim Ghosh	1
Christopher J Foll	1
Carolan Geoffrey	1
Sandip Das	1
Sankarak Narayanan	1
Kathuria Sundeep	1
Sharma Neha	1
Aseem Mohan	1
Essar Shippings Limited	1000000
Central Depository Services Limited	264407500
Total	539607500
Names of Shareholders	No. of Preference Shares
Hutchison Essar Mobile Services Limited	200000
Equity Share Breakup	Percentage of Holding
Category
Bodies Corporate	100.00

BUSINESS DETAILS

Line of Business :	Providing cellular telephone services in the State of Tamilnadu, Karnataka and Andhra Pradesh.
Products :	Postpaid Prepaid World Calling Card Handy phones Hutch PCO
Brand Names :	“HUTCH”.

GENERAL INFORMATION

Suppliers :	Siemens, India Siemens, Germany Motorola, India Motorla, USA Nokia, India
Customers :	National and International Roaming Spanning over 130 countries and 1200 cities, towns and highways in India, infotainment services from Hutch Alive. SMS-based services Voice Messaging Service Voice Response Service Voicemail Fax and Data Services Unified Messaging Service in Karnataka
No. of Employees :	200
Bankers :	Indian Overseas Bank Limited, Chennai, Tamilnadu State Bank of India, Chennai, Tamilnadu State Bank of India, Delhi Tamilnadu Mercantile Bank Limited, Chennai, Tamilnadu Tamilnadu Mercantile Bank Limited, Delhi The Hongkong and Shanghai Banking Corporation Limited, M G Road, Mumbai – 400001

Banking Relations :	Satisfactory
Financial Institution :	IL and FS Financial Centre, plot No. C – 22, Block, BA, Kurla Complex Bandra East, Mumbai – 400051, Maharashtra, India
Auditors :
Name :	Price Waterhouse and Company Chartered Accountants
Address :	222, Veer Savarkar Marg, Shivaji Park, Dadar, Mumbai – 400028, Maharashtra, India
Associates/Subsidiaries :	Hutchison Essar Telecom Limited Hutchison Telecom East Limited Fascel Limited Essar Spacetel Private Limited Aircel Digilink India Limited Hutchison Essar Cellular Limited Hutchison Max Telecom Limited Vodafone Essar Mobile Services Limited U64202DL1992PLC088087

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
1042000000	Equity Shares	Rs.10/- each	Rs.10420.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
541608000	Equity Shares	Rs.10/- each	Rs.5416.080 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2006	31.12.2005	31.12.2004
SHAREHOLDERS FUNDS
1] Share Capital		5416.080	5416.080	5416.080
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		[4452.517]	[4779.350]	[3098.650]
NETWORTH		963.563	636.730	2317.430
LOAN FUNDS
1] Secured Loans		15047.782	11016.550	7081.000
2] Unsecured Loans		16062.500	11064.550	8744.550
TOTAL BORROWING		31110.282	22081.100	15825.550
DEFERRED TAX LIABILITIES
TOTAL		32073.845	22717.830	18142.980
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		30587.331	20316.530	15916.570
Capital work-in-progress		4186.930	2586.200	1232.160
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		2935.790	2922.630	2507.100
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	26.520	25.480	21.360
	Sundry Debtors	1345.632	1241.890	641.720
	Cash & Bank Balances	1379.575	1075.550	574.950
	Other Current Assets	2554.473	1008.100	309.490
	Loans & Advances	2899.893	1640.150	743.290
Total Current Assets		8206.093	4991.170	2290.810
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	13433.569	7865.510	3784.580
	Provisions	408.730	233.190	19.080
Total Current Liabilities		13842.299	8098.700	3803.660
Net Current Assets		[5636.206]	[3107.530]	[1512.850]
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		32073.845	22717.830	18142.980

PROFIT & LOSS ACCOUNT

PARTICULARS		31.12.2006	31.12.2005	31.12.2004
Sales Turnover		23984.970	12313.080	5858.870
Other Income		38.006	9.880	2.950
Total Income		24022.976	12322.960	5861.820
Profit/(Loss) Before Tax		349.546	[2071.340]	[2463.350]
Provision for Taxation		0.000	390.640	[1184.220]
Profit/(Loss) After Tax		349.546	[2461.980]	[1279.130]
Earnings in Foreign Currency :
Total Earnings		NA	NA	370.530
Imports :
	Capital Goods	NA	NA	2327.120
Expenditures :
	Purchases made for re-sale	288.970	175.290	0.000
	Cost of Goods Sold	0.000	0.000	241.860
	Salaries, Wages, Bonus, etc.	986.244	727.690	0.000
	Managerial Remuneration	4.330	1.630	0.000
	Payment to Auditors	7.577	5.790	0.000
	Interest	1242.099	991.040	862.750
	Insurance Expenses	35.648	21.260	0.000
	Power & Fuel	1240.330	622.690	0.000
	Depreciation & Amortization	3253.276	2125.710	1299.850
	Other Expenditure	16614.956	9723.200	5971.570
Total Expenditure		23673.430	14394.300	8376.030

KEY RATIOS

PARTICULARS		31.12.2006	31.12.2005	31.12.2004
PAT / Total Income	(%)	1.46	[19.98]	[21.82]
Net Profit Margin (PBT/Sales)	(%)	1.46	[16.81]	[42.04]
Return on Total Assets (PBT/Total Assets}	(%)	0.90	[8.18]	[13.53]
Return on Investment (ROI) (PBT/Networth)		0.36	[3.25]	[1.06]
Debt Equity Ratio (Total Liability/Networth)		46.65	47.40	8.47
Current Ratio (Current Asset/Current Liability)		0.59	0.62	0.60

LOCAL AGENCY FURTHER INFORMATION

History

Subject was incorporated on 7^th December, 1995 at New Delhi under the name and style of Barakhamba Sales and Service Limited having Company Registration Number 74451.

The name of the company was changed to the present w.e.f. 12.02.2002.

The Company established its presence in India way back in 1994 by acquiring the cellular license for Mumbai. It launched cellular service in the city of Mumbai on a GSM 900 network under the brand name Max Touch in the year 1995. It became synonymous with being the first ‘service brand’ in telecom by making innovations both in customer service and technology. In early 2000, Orange was launched in Mumbai.

In 2000, the company did a joint venture with Essar to expand its presence in the country. Hutchison Essar acquired the cellular licenses in Delhi, Kolkata and Gujarat in 2000 to become one of the largest cellular businesses in the country.

The Company won the bid to operate as the 4th cellular service provider in Chennai, Karnataka and Andhra Pradesh in 2001 on GSM 1800 network.

It now has operations in 12 circles – Delhi, Karnataka, Andhra Pradesh, Chennai, Kolkata, Gujarat, Haryana, Rajasthan, UP (E), UP (W) Punjab and Mumbai. It has a customer base of over 6 million people and is committed to providing the best in service and technology to its customers.

The Hutchison’s Telecommunications is a wholly owned subsidiary of Hutchison Whampoa Limited. It operates a wide range of integrated telecommunications services in over 17 countries. It was formed in 1985 to run a cellular network in Hong Kong and now has become a formidable force in mobile communications. It has business interests in fixed line services, internet services, fiber optics, mobile telephony (voice and data), trunked mobile radio and radio broadcasting. But its main interest internationally is in providing mobile telephony.

Hutchison Telecom has a successful track record in identifying potential countries and technologies, developing them and creating shareholder value over a long term. One of its key success stories was developing the first consumer brand in telecom – Orange. It is one of the largest 3G players worldwide. Hutchison 3G has been given licenses to operate in UK, Italy, Israel, Denmark, Sweden, Austria, Ireland, Australia and Hong Kong. Hutchison is the first operator to offer 3G services in Australia, Italy, the UK and Sweden.

On September 26, 2001 the Company has entered into three separate License Agreements with the Department of Telecommunications, to provide Cellular Mobile Telephony Service in Chennai Metro Service Area, Karnataka Telecom Circle Service Area and Andhra Pradesh Telecom Circle Service Area. The duration of the License in 20 years. The company has paid a one-time fee of Rs.1540.00 Millions for Chennai Metro Service Area, Rs. 2068.300 Millions for Karnataka Telecom Circle and Rs.1030.100 Millions for Andhra Pradesh Telecom Circle.

On February 13, 2004 the Company has entered into a License Agreement to provide Unified Access Services in Uttar Pradesh Service Area. The duration of the License in 20 years. The company has paid a one time entry fee of Rs. 305.500 Millions.

Pursuant to the Scheme of Arrangement between Escorts Telecommunications Limited and the company with regard to the transfer of the License for the Punjab circle as approved by the Hon’ble High Court of Delhi on August 14, 2003 and on receipt of Cellular Mobile Telephony Services License approval byt eh Department of Telecommunication vide their letter dated February 3, 2004 effective from November 13, 2003, the company has a License to provide CMTS in the Punjab telecom Circle. The duration of the License in 20 years.

The company has incurred loss in the current year and the accumulated losses as at the year end exceeds 50 % of its net worth. However, these financial statements have been prepared on a going concern basis taking into account the financial and business support of shareholders and the bankers, enhanced profitability of the existing circles in the South business and also considering the long term growth plans prepared by the management indicating enhanced profitability of the business.

Bankers Charges Report as per Registry

Name of the company	VODAFONE ESSAR SOUTH LIMITED
Presented By	Mr. Foll John Christopher , Director
1) Date and description of instrument creating the change	Agreement of hypothecation dated 24.08.2002 executed by Hutchison Essar South Limited in favour of The Hongkong and Shanghai Banking Corporation Limited
2) Amount secured by the charge/amount owing on the securities of charge	Rs. 1300.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	The whole of the moveable properties of the borrower including its movable plant and machinery, machinery spares, tools and accessories and other movables both present and future whether installed or not and whether now lying loose or in cases or which are now lying or stored in to about or shall hereafter from time to time during the continuance of the security of charge by way of hypothecation by brought into or upon or be stored or be in to about the borrower’s factories, premises or godowns or whereverelse the same may be or be held by any party to the order or disposition of the borrower or in the course of transit or on high scas or on order or delivery however and wheresoever in the borrower and either by way of substitution or addition and all documents of title, negotiable instruments policies of Insurance and other documents instruments relating thereto.
4) Gist of the terms and conditions and extent and operation of the charge.	In consideration of loan and any other banking facilities sanctioned to be sanctioned by the Bank to Company the Company has hypothecated and charged to the Bank by way of first charge as continuance above to secure the repayment of the advanced together with interest at the rate to the facility shall be payable by the company. In case the company fails to fulfill its obligations under the agreement, the Bank shall be entitled to take the possession of the hypothecated properties and sell them by public auction or private contract and utilize the proceeds in full or part settlement of its claims.
5) Name and Address and description of the person entitled to the charge.	The Hongkong and Shanghai Banking Corporation Limited, M G Road, Mumbai – 400001
6) Date and brief description of instrument modifying the charge	NA
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	NA

Corporate identity number of the company	U74899DL1995PLC074451
Name of the company	VODAFONE ESSAR SOUTH LIMITED
Address of the registered office or of the principal place of business in India of the company	C – 48, Okhla Industrial Area, Phase – II, New Delhi – 110020, India
This form is for	Creation of Charge
Type of charge	Hypothecation
Particular of charge holder	IL and FS Financial Centre, plot No. C – 22, Block, BA, Kurla Complex Bandra East, Mumbai – 400051, Maharashtra, India
Nature of instrument creating charge	Deed of hypothecation dated 21 February 2006 executed by the company in favour of IL and FS Trust company limited as Security Trustee
Date of instrument Creating the charge	21.02.2006
Amount secured by the charge	Rs. 67100.000 Millions
Description of the property charged indicating whether it is a charged on	Plant and Machinery Stock in trade Book Debts Fixed Assets Furniture and Fixture Vehicles Fixed Deposit Intangible Assets

Fixed Assets

• Intangible Assets
• Computer Software
• Plant and Machinery
• Computer Hardware
• Furniture and Fixture
• Office Equipment
• Vehicles

Subject’s dealers in and around Delhi are as under:

• A C Telecom
• Aakash Hello Point
• A B Communication
• ADD World
• Advani Telecom
• Aggarwal Electronics
• Air Dale, Khan Market
• Aircon West End
• Air cool
• Ajanta Photo Studio
• Alok Telecom
• Aman Telecom
• Amit Comm
• Aneja Commercial Services
• Anjali Communications
• Ankur Aircond
• Ark Cellphone
• Arora Bazar
• Arora Communications
• Arora Tours and Travels
• Ashwani
• Asian Electronics
• Astral Marketing
• Audio Point
• Audio Video
• AVM
• Azad Hind
• B B M Telecom
• B S Telecom
• Bajrang General Store
• Balaji Electric Store
• Balaji Telecom
• Bansal Telecom
• Bawa Telecom
• Baxi Electronics
• Beauty Comm
• Benz India
• Best Cell Tell
• Bhagwati Computer Graphics
• Bhagwati Telecom
• Bhagya Sri Telecom
• Bhalla Comm
• Bharat Medical Store
• Bhasin
• Bhatia Telecom
• Bigben Opticals
• Billa Thi Hatti
• Bluez Cafi
• Britel Comm
• Bunty Telecom
• Call Tech
• Capital Communication
• Cell Connection
• Cell Dot Net
• Cell Hut
• Cell net
• Cell Point
• Cellstation Hut.com
• Cellular.com
• Chhadha Telecom
• Chadha Trad
• Chaturbhuj Medical Store
• Chirag Comm
• Chitkara Comm
• Classic Audio Video
• Classic Business Cent
• Classic Comm
• Classic Elec
• Classic Studio
• Communicator
• Comnet Comm
• Computer Supermart
• Consumex
• Continental
• Cosy Drycleaners
• Cyber Comm
• Dabas Telecom Center
• Dadu Communication
• Darshan K Comm
• Dass Comm
• Dawar Telecom
• DD Telecom
• Deepak Electronics
• Deepak Gift Emporium
• Deepanjali
• Depro Telecom
• Dev Communication
• Devender Comm
• Dhingra Hello Point
• Dhingra Prop
• Diamond Communication
• Dieno World
• Digital World
• Dilouq Mart
• Dinesh Comm
• Direct Team Network
• Dixit Enterprises
• Dixit Telecom
• Dixsons
• Dolphin Telecom
• Donal Cafi
• Duggal Taliors
• Durga Mobile World
• Efforts Mktg
• Electro Com Palace
• Electronic Planet
• Electronic Ways
• Eveready House
• Fancy Silk Store (Mukesh)
• Point
• Fone Gallery
• Freedo
• Friend’s Telecom
• Friends
• Friends Communication
• Friends Marketing
• Future Talk
• G.K.Marketing
• G.D.Electronics
• G.S.Telecom
• Intouch Comtech
• Invitation Electronics
• JMD Ent

As per web details

profile

The Company is a part of the internationally acclaimed Hutchison Whampoa group, a diversified, multinational conglomerate with its origins dating back to 1828 in Hongkong. The parent company, Hutchison Whampoa Limited, is a part of the Li Ka- shing group of companies. It is one of the largest companies listed on the Hong Kong stock exchange. The Group operates five core businesses in 41 countries and employs around 1,50,000 people worldwide. It is one of the most profitable businesses in Asia. The five-core businesses of Hutchison Whampoa are:

Telecommunications and e-commerce: One of the leading owners and operators of telecommunications and internet infrastructure in around 17 countries worldwide.

Property and Hotels: Has an investment portfolio of approx 13.7 million sq. ft. of commercial, office, industrial and residential premises.

Retail and manufacturing: Owns 3 major stores – Watsons, Fortress and PARKnSHOP with more than 800 stores in the region. With the acquisition of the Kruidvat Group of the Netherlands, Hutchison became one of the world’s largest health and beauty retail outlets in Asia and six European countries.

Energy, Infrastructure, Finance and Investments: Hong Kong and Lamma Islands run on electricity generated by Hutchison. Holds 84.6% interest in Cheung Kong infrastructure – a leading investor in the infrastructure sector in Hong Kong, PRC and Australia.

In India, Hutchison Telecom operates its cellular services in 13 circles : Orange in Mumbai and Hutch in Delhi, Karnataka, Andhra Pradesh, Chennai, Kolkata, Gujarat, Haryana, Rajasthan, Uttar Pradesh (East), Punjab, West Bengal and Sikkim and Uttar Pradesh (West). The Hutchison network covers almost 25% of the national foortprint and 70% of national purchasing power, with a subscriber base that now exceeds 6 million.

In Bangalore the subject has installed over 180 towers to facilitate better communication coverage.

group profile

Hutchison Wampoa Limited

Hutchison Wampoa Limited (HWL) is a leading international corporation committed to innovation and technology with businesses spanning the globe. Its diverse array of holdings range from some of the world’s biggest retailers to property development and infrastructure to the most technologically-advanced and marketing-savvy telecommunications operators.

HWL reports consolidated turnover of approximately HK$ 145 billion (US$ 18660 million) and HK$ 81 billion (US$ 10,420 million) for the year ended 31^st March, 2003 and for the six months ended 30^th June, 2004 respectively. With operations in 42 countries and more than 170,000 employees worldwide, Hutchison has five core businesses-ports and related services, telecommunications, property and hotels, retail and manufacturing and energy and infrastructure.

Hutchison Essar established its presence in India in 1994 by acquiring the cellular license for Mumbai. It now has operations in 16 circles accounting for 70% of India's mobile customer base. With over 27.7 million customers, it is one of India's most reputed telecom companies.

Hutchison Essar, under the Hutch brand, over the years, has been named the 'Most Respected Telecom Company', the 'Best Mobile Service in the country', and the 'Most Creative and Most Effective Advertiser of the Year'.

Hutchison Essar is now part of Vodafone - the world's leading international mobile communications company. Vodafone now has operations in 26 countries across 5 continents and 36 partner networks with about 225 million proportionate customers worldwide. Vodafone has tied up with Essar as its principal joint venture partner for the Indian operation.

The Essar Group is one of India's largest corporate houses with interests spanning the manufacturing and service sectors like Steel, Oil & Gas, Power, Telecom and BPO, Shipping and Logistics and Engineering and Constructions. The Group has an asset base of over Rs.20 billion (US$ 4.4.billion) and employs over 4000 people.

Figures from Cellular Operators Association of India, Apr 30,, 2007.

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.40.45
UK Pound	1	Rs.81.20
Euro	1	Rs.63.48

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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		45

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