MIRA INFORM REPORT

Report Date :

04.11.2008

IDENTIFICATION DETAILS

Name :	BLUE COAST HOTELS AND RESORTS LIMITED
Formerly Known As :	MOREPEN HOTELS LIMITED
Registered Office :	263 C, Arossim, Canasaulim, Goa – 403 712
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	27.07.1992
Com. Reg. No.:	003109
CIN No.: [Company Identification No.]	L31200GA1992PLC003109
TAN No.: [Tax Deduction & Collection Account No.]	DELB06328A
PAN No.: [Permanent Account No.]	AAACM0037G
Legal Form :	A Public Limited Liability Company. The company's shares are listed on the Stock Exchanges.
Line of Business :	The subject's principal activity is to Operate The Hotel Park Hyatt Goa Resort and Spa in Goa. The Services include Accommodation, Food And Beverages, Wines And Liquor, Telephone and Transportation Facilities.

RATING & COMMENTS

MIRA’s Rating :

B

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 6039000
Status :	Satisfactory
Payment Behaviour :	Delayed
Litigation :	Clear
Comments :	Subject is a part of Morepen Group for whom we had a large collection case. Morepen Laboratories Limited, managed by Suri Family has been defaulting with their suppliers, financials, banks, institutions, etc. since last 5 years. Financial health of Morepen is bad. Subject’s payments are also delayed. However, the company continues to show improved workings. Some caution is needed while dealing for the requested sum.

LOCATIONS

Registered Office :	263 C, Arossim, Canasaulim, Goa – 403 712, India
Tel. No.:	91-832-2721234
Fax No.:	91-832-2721238
Corporate Office :	416-418, 22 K G Marg, New Delhi – 110 001, India
Tel. No.:	91-11-2721234

SOLE PROPRIETOR/PARTNERS/DIRECTORS

Name :	Mr. P L Suri
Designation :	Chairman and Managing Director
Name :	Mrs. Sunita Suri
Designation :	Executive Director
Name :	Mrs. Mamta Suri
Designation :	Director
Name :	Mr. B K Goswami
Designation :	Director
Name :	Mr. K S Mehta
Designation :	Director
Name :	V M Kaul
Designation :	Director
Name :	Mr. Ashoka Kini
Designation :	Director

KEY EXECUTIVES

Name :	Mr. I S Deo
Designation :	Company Secretary

BUSINESS DETAILS

Line of Business :

The subject's principal activity is to Operate The Hotel Park Hyatt Goa Resort and Spa in Goa. The Services include Accommodation, Food And Beverages, Wines And Liquor, Telephone and Transportation Facilities.

GENERAL INFORMATION

No. of Employees :	580
Bankers :	Not Available

Banking Relations :	---
Auditors :
Name :	M Kamal Mahajan and Company Chartered Accountants
Group Company :	Morepen Laboratories Limited, New Delhi
Associates/Subsidiaries :	Blue Coast Hospitality Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
100000000	Equity Shares	Rs.10/- Each	Rs.1000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
88052800	Equity Shares	Rs.10/- Each	Rs.880.528 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006 (18 Months)
SHAREHOLDERS FUNDS
1] Share Capital		880.500	880.500	880.500
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		327.300	185.700	83.200
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1207.800	1066.200	963.700
LOAN FUNDS
1] Secured Loans		874.100	1046.800	1209.100
2] Unsecured Loans		19.500	45.100	50.200
TOTAL BORROWING		893.600	1091.900	1259.300
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		2101.400	2158.100	2223.000
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2050.000	2043.800	2126.600
Capital work-in-progress		0.000	47.100	0.000
INVESTMENT		0.800	0.800	0.900
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	125.600	115.100	90.100
	Sundry Debtors	85.600	78.400	36.500
	Cash & Bank Balances	109.800	22.500	33.700
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	143.300	202.700	195.300
Total Current Assets		464.300	418.700	355.600
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	377.400	335.600	261.700
	Provisions	36.800	17.700	0.300
Total Current Liabilities		414.200	353.300	262.000
Net Current Assets		50.100	65.400	93.600
MISCELLANEOUS EXPENSES		0.500	1.000	1.900
TOTAL		2101.400	2158.100	2223.000

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006 (18 Months)
Rooms, Restaurants, Services and Others		963.100	832.600	1013.800
Other Income		30.700	29.900	5.400
Total Income		993.800	862.500	1019.200
Profit/(Loss) Before Tax		215.700	154.900	76.500
Provision for Taxation		74.100	52.400	26.500
Profit/(Loss) After Tax		141.600	102.500	50.000
Expenditures :
	Food, Beverages and Provisions Consumed	63.600	62.000	78.400
	Power & Fuel	55.900	54.800	70.100
	Employees Cost	136.000	113.900	144.400
	Other Operating and General Expenses	317.000	251.100	292.200
	Miscellaneous Expenses	26.200	17.700	13.300
	Interest and Financial Charges	93.400	109.600	215.200
	Depreciation & Amortization	86.000	98.500	129.100
Total Expenditure		778.100	707.600	942.700

QUARTERLY RESULTS

PARTICULARS	30.06.2008
Type	1 Quarter
Sales Turnover	174.700
Other Income	1.000
Total Income	175.700
Total Expenditure	155.400
Operating Profit	20.300
Interest	19.100
Gross Profit	1.200
Depreciation	24.300
Tax	0.100
Reported PAT	(15.400)

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006 (18 Months)
Debt Equity Ratio	0.87	1.16	1.76
Long Term Debt Equity Ratio	0.79	1.06	1.62
Current Ratio	0.92	0.95	0.54
TURNOVER RATIOS
Fixed Assets	0.40	0.35	0.29
Inventory	8.00	8.12	7.74
Debtors	11.75	14.49	28.82
Interest Cover Ratio	3.31	2.41	1.36
Operating Profit Margin (%)	41.02	43.60	41.51
Profit Before Interest and Tax Margin (%)	32.09	31.77	28.77
Cash Profit Margin (%)	23.63	24.14	17.67
Adjusted Net Profit Margin (%)	14.70	12.31	4.93
Return on Capital Employed (%)	14.52	12.08	9.54
Return on Net Worth (%)	43.98	51.26	26.59

LOCAL AGENCY FURTHER INFORMATION

OPERATIONAL RESULTS AND APPROPRIATIONS 

The Board informs that the Company's Total Income for the year under report stood at Rs.993.835 Millions (previous period Rs.862.455 Millions) against which it made a profit (before tax) of Rs.215.749 Millions (previous year Rs.154.961 Millions). 

The up-gradation program for the hotel as agreed to by the Company and Hyatt International is being funded through the internal accruals and accordingly the Directors prefer not to recommend any dividend on share capital of the Company for the year under report. 

As at the end of the year under report balance available for appropriation stood at Rs.248.262 Millions [previous year Rs.106.637 Millions) which was carried forward to the Balance Sheet. 

SUBSIDIARY COMPANY 

A statement under Section 212 of the Companies Act, 1956 is annexed to this report with respect to Blue Coast Hospitality Limited, a wholly owned subsidiary of the Company. It’s Balance Sheet, Profit and Loss A/c and other documents are attached with the Balance Sheet of the Company. The Consolidated Financial Statements presented by the Company include financial results of its subsidiary company. 

MANAGEMENT DISCUSSION AND ANALYSIS 

TOURISM INDUSTRY: 

Globally, this is one of the fastest growing industries, thanks to higher disposable incomes, increased leisure time and falling costs and time of travel. Appreciating its potential as an economic value creator, nations are furiously competing for a larger share in this industry and are encouraging and promoting tourism like never before. 

The Indian Tourism Industry is poised for tremendous growth. The steady inflow of foreign tourists witnessed into India during the last two decades is due to number of factors. The vivid Indian culture is imperative in attracting foreign tourists from around the globe to India. The splendid beauty of the virgin countryside and the matchless monuments lures the leisure tourists to the holy land. The reasons for this stupendous growth are increased traveler confidence, strong economic growth. An expected GDP of above 8% for the coming years has also led various multinational companies setting up shops in India resulting into increase in the number of business travelers from different parts of the world. And aptly the World Travel and Tourism Council (WTTC) has reported that Indian tourism industries will remain one of the fastest growing through the next 10-15 years and expects Indian tourism to generate $89.9 Billion by the year 2014. 

However, the present dream run may not continue for a long as the additional room inventory being created in the industry will eventually have sobering effect on the average rate as the gap between demand and supply of the rooms will ultimately be bridged. Yet the boom in the tourism industry in India is going to stay for a while as the same is going to be sustained not only by strong demand for rooms by the international tourists but also by the rapidly growing domestic tourism, both in numbers and in strength. 

TOURISM INDUSTRY IN GOA 

Goa continues to retain its position of being among India's favorite leisure destination. Consistent demand from the international tourists along with strong contribution from domestic travelers has allowed Goa to emerge as a year long holiday destination and the same is reflected by the positive growth both in occupancies and Average rate during the last couple of years. 

However, the recent economic concerns affecting business globally has led to the slowing down of the business and leisure travels that makes the year 2008-2009 quite challenging for Goa which to a large extent depends on the foreign tourist to ramp up the value accretion in term of Average Rate and in turn the revenue. The negative publicity which Goa has attracted recently in terms of crimes and increased intolerance for outsiders also does not bode well for tourism industry in Goa. Yet Goa will continue to do well as no significant new hotel development is taking place and as a result the gap in the demand and supply of the rooms will continue to be there in the coming years. 

REVIEW OF OPERATIONS 

Park Hyatt Goa Resort and Spa has clearly established itself as the market leader in Goa. In addition to being the largest revenue earner it has achieved the number one position i n terms of Revenue Market Share Index (RMSI) earning more then what it would have earned based on its natural market share. 

For the period under report Park Hyatt Goa Resort and Spa achieved an average occupancy of 76% and it’s ARR and Rev Par stood at Rs. 9775 and Rs. 7424 respectively. 

FUTURE PLANS AND OUTLOOK 

Park Hyatt Goa Resort and Spa, the resort owned by the Company, has strengthened its position in the Goa market over the past year. The resort has achieved the position of market leader i n terms of RMSI and holding on the same Year to Date. 

The Enhancement Program at the resort has reached the mid point with Restaurants and Public Areas having undergone significant improvements. The current focus is on refurbishing the first 100 rooms and 8 suites which will be completed prior to the peak season. In 2009 the resort will complete the remaining rooms and suites. 

Sereno Spa will undergo a soft refurbishment to bring a more luxurious feel to the product; work will commence in part during the last quarter of 2008 and be completed during the monsoon season of 2009. A feasibility study will be conducted on the Village Cafe to ensure that all necessary amendments to the kitchens are incorporated in the refurbishment of this key area. Towards the later part of 2009 the function facilities will be upgraded to compliment the Indo-Portuguese design of the resort. 

The resort recently launched the 'Training Academy', a comprehensive training system tailored to the needs of the resort that will empower and equip its employees to deliver consistently high levels of customer service. 

Together the product and service enhancements being undertaken have brought about a dramatic improvement in guest satisfaction and assisted to drive rates ahead of the market. 

Whilst market conditions have become challenging during the first half of the current financial year due to the global financial crisis and record inflation levels the resort needs to remain steadfast in its drive to raise product and service to Park Hyatt standards, whereby ensuring the satisfaction of their guests and in turn sustainable profitability for the Company. 

FINANCIAL PERFORMANCE 

For the period under report the Company's Total Income for the year under report stood at Rs.993.835 Millions (previous year Rs.862.455 Millions) against which it made a profit (before tax) of Rs.215.749 Millions (previous year Rs.154.961 Millions). 

WEBSITE DETAILS:

Subject has informed the Exchange vide its letter dated October 16, 2008 that "At the Meeting of the Board of Directors of the Company held today, 11,50,000 Equity Shares of Rs.10/- each have been allotted on preferential basis, to the following: (1) Name of Allottee : Jetty Capital Limited; Category : Public; No. of Equity Shares Allotted : 11,50,000. Total : No. of Equity Shares Allotted : 11,50,000".        Date: 2008-10-16

Business Summary

Subject (formerly known as Morepen Hotels Limited). Morepen Finance Limited (the Company) was incorporated as closely held public limited Company on 27th July, 1992 under the name Morepen Finance and Investments Limited and registered with the Registrar of Companies NCT of Delhi and Haryana at New Delhi. The Company became entitled to commence business on 7th September, 1992 on issue of certificate of Commencement of Business, Subsequently majority of the Equity Shares in the Company were acquired by Morepen Laboratories Limited, thereby making the Company its subsidiary. Name of the Company was changed to Morepen Finance Limited w.e.f, 25th October, 1994.

The Company got itself registered with Securities and Exchange Board of India (SEBI) as Category III Merchant Banker vide Certificate of Registration dated November 17, 1994. The Company has also applied to SEBI for upgradation of its registration to Category I Merchant Banker vide its letter dated February 14, 1995.

During the first two years of its operation, the Company remained more or less dormant. However, on induction of fresh funds by way of equity capital in the year 1994-1995 the Company became active and closed the year with a profit after tax of Rs.1036.000 Millions on a paid up capital of Rs.3560.000 Millions. The company is presently engaged in both fund and non fund based business viz leasing, bills discounting, lending, underwriting, financial consultancy, loan syndication and other merchant banking activities.

Their Services:

1. Beverages and Food

2. Income (Room Rent)

3. Other Services

4. Wines and Spirits.

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.48.96
UK Pound	1	Rs.80.26
Euro	1	Rs.63.08

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	4
--CREDIT LINES	1~10	1
--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		40

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.	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