MIRA INFORM REPORT

Report Date :

04.11.2008

IDENTIFICATION DETAILS

Name :	SREI INFRASTRUCTURE FINANCE LIMITED
Formerly Known As:	SREI INTERNATIONAL LIMITED
Registered Office :	Vishwakarma, 86-C, Topsia Road (South), Kolkata – 700046, West Bengal
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	29.03.1985
Com. Reg. No.:	21-55352
CIN No.: [Company Identification No.]	L29219WB1985PLC055352
TAN No.: [Tax Deduction & Collection Account No.]	CALS11905F
PAN No.: [Permanent Account No.]	AAACS1425L
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Leasing and Hire Purchase of Construction Equipments, Commercial Vehicles and Automobiles in India.

RATING & COMMENTS

MIRA’s Rating :

Aa

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 30000000
Status :	Satisfactory
Payment Behaviour :	Slow but Correct
Litigation :	Clear
Comments :	Subject is a well established company having satisfactory track. Available information indicates satisfactory financial responsibility of the company. Trade relations are fair. 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 :	Vishwakarma, 86-C, Topsia Road (South), Kolkata – 700046, West Bengal, India.
Tel. No.:	91-33-22850112-15 / 22850124-27 / 22870112 – 15/ 39887734
Mobile No.:	91-9830261703
Fax No.:	91-33-22857542 / 22858501
E-Mail :	calho@srei.com corporate@srei.com secretarial@srei.com
Website :	http://www.srei.com
Corporate Office :	6A Kiran Shankar Roy Road, Kolkata - 700 001, India
Tel No.:	91- 33-30229123/ 24
Other Office :	Trinity Plaza 84/1A Topsia Road (South) Kolkata - 700 046, India Tel No.: 91-33 22850168-69/ 39873903 Fax No.: 91-33-22850167 Hi - Tech Chambers 84/1B Topsia Road (South), 6th Floor, Kolkata - 700046, India Tel No.: 91-33-39873845/3810 Fax No.: 91-33-39873861
Regional Office :	Located at: Ahmedabad Kolkata Bangalore Nagpur Mumbai Bhubaneswar Chennai New Delhi Hyderabad
International Offices :	Located at: Moscow Saint Petersburg Krasnodar

DIRECTORS

Name :	Mr. M.S. Verma
Designation :	Chairman
Address :	A-55, Belvedere Park, DLF City, Phase III, Gurgaon, Haryana - 122002
Date of Birth/Age :	66 years
Qualification :	M.A., CAIIB
Name :	Mr. Hemant Kanoria
Designation :	Chairman and Managing Director
Address :	32Q, New Road, Alipore, Kolkata – 700027, West Bengal
Date of Birth/Age :	48 years
Qualification :	B. Com
Tel. No.:	91-33-24797705
Experience :	28years
Name :	Mr. Dhruba P Gupta
Designation :	Director
Address :	S15, Greater Kailash II, New Delhi – 110048
Tel. No.:	91-11-26439985
Name :	Mr. Vasantrai H. Pandya
Designation :	Director
Address :	Park Side II Building, Wing ‘B’, Raheja Chamber, Kulupwadi Road No.1, Borivali (East), Mumbai – 400066, Maharashtra
Date of Birth/Age :	71 years
Qualification :	B.A. (Economics) CAIIB
Experience :	43 years
Tel. No.:	91-22-28863523
Email:	corporate@srei.com
Name :	Mr. Satish C. Jha
Designation :	Director
Address :	G-61, Palam Vihar, Gurgaon, Haryana – 122017, Punjab
Tel. No.:	91-124-2360072
Email:	corporate@srei.com
Name :	Mr. Sunil Kanoria
Designation :	Director
Address :	3, Middle Road, Hastings, Kolkata – 700027
Date of Birth/Age :	39 years
Qualification :	B. Com., FCA
Experience :	16 years
Name :	Mr. B. Swaminathan
Designation :	Director – Nominated by Indian Renewable Energy Development Agency
Address :	Flat 351B, Ranka Colony, Bilekahalli, Bannerghatta Road, Bangalore - 560055
Date of Birth/Age :	72 years
Qualification :	B.A. (Hons.), MDPA
Name :	Mr. S. Rajagopal
Designation :	Director
Address :	71/1, Margosa Road, 3^rd Main Malleswaram, Bangalore - 560055
Date of Birth/Age :	65 years
Qualification :	B. Com., M.A. LLB, CAIIB, Diploma in Industrial Finance
Experience :	30 years
Name :	Mr. R. Sankaran
Designation :	Director
Address :	401, Sand Pebbles, Perry Cross Road, Bandra (W), Mumbai - 400050
Date of Birth/Age :	58 years
Qualification :	M.A. (Eco.), Diploma in Business and Financial Management
Experience :	30 years
Name :	Mr. Dr. Vasant H. Karmarkar
Designation :	Director – Nominated by IFC – Washington, USA
Name :	Mr. S. S. Chaturvedi
Designation :	Whole-time Director (Executive Director)
Name :	Mr. P. K. Pandey
Designation :	Whole-time Director (Executive Director)
Address :	54/1/2, Girish Mukherjee Road, Kolkata – 700023
Date of Birth/Age :	62 years
Qualification :	B. Com, ACA
Experience :	36 years
Name :	Mr. K. K. Mohanty
Designation :	Whole-time Director (Executive Director)
Address :	N/4, 181, Nayapali, Bhubaneshwar
Date of Birth/Age :	50 years
Qualification :	B. Tech, MBA
Experience :	33 years
Name :	Mr. Suneet K. Maheshwari
Designation :	Executive Director
Address :	B13, Sumera Co. op. Housing Society limited, MHADA Complex, SVP Nagar, Mumbai - 400053
Date of Birth/Age :	47 years
Qualification :	B.Sc. (Hon), MBA
Experience :	23 years
Name :	Mr. S. Chatterjee
Designation :	Whole time Director
Date of Birth/Age :	61 years
Qualification :	BA
Experience :	40 years
Name :	Mr. Daljit Mirchandani
Designation :	Director
Name :	Mr. Somabrata Mandal
Designation :	Director
Name :	Mr. Saud Siddique
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Sandeep Lakhotia
Designation :	Company Secretary
Name :	Mr. Salil Kumar Gupta
Designation :	Chief Mentor
Address :	538, Jodhpur Park, Kolkata – 700068, West Bengal
Date of Birth/Age :	76 years
Mobile No.:	91-33-24732248 / 0147
Experience :	47 years
Name :	Mr. Sanjeev Sancheti
Designation :	Chief Financial Officer
Name :	Mr. D K Vyas
Designation :	Chief Executive – Assets Finance
Date of Birth/Age :	39 years
Qualification :	B. Com, ACA
Experience :	16 years
Name :	Mr. Srikant Rajan
Designation :	Head- Special Assets
Date of Birth/Age :	49 years
Qualification :	B. Sc, ACA
Experience :	24 years
Name :	Mr. Kanan Rangenathan
Designation :	Vice President - Special Assets
Date of Birth/Age :	44 years
Qualification :	BE, MMS
Experience :	17 years
Name :	Mr. Pradeep Khullar
Designation :	Head – Legal
Date of Birth/Age :	47 years
Qualification :	B. Com, LLB
Experience :	24 years
Name :	Mr. Shashi B. Tiwari
Designation :	Head – Treasury
Date of Birth/Age :	52 years
Qualification :	B. Sc, LLB
Experience :	29 years
Name :	Mr. Mudit Gupta
Designation :	Senior vice President
Date of Birth/Age :	36 years
Qualification :	B. Com, PGDMM
Experience :	11 years
Name :	Mr. Kaushik Chaudhuri
Designation :	Chief Operating Officer
Date of Birth/Age :	41 years
Qualification :	B.Com, CA
Experience :	17 years
Name :	Mr. Partho P. Mukhopadhyay
Designation :	Head – HRD
Date of Birth/Age :	48 years
Qualification :	BA, PGDM
Experience :	23 years
Name :	Mr. Arnab Basu
Designation :	Senior Vice President – International Business
Date of Birth/Age :	41 years
Qualification :	BE
Experience :	12 years
Name :	Mr. Alok Upadhyay
Designation :	Head – Urban Infra
Date of Birth/Age :	56 years
Qualification :	B. Tech
Experience :	29 years
Name :	Mr. Sanjeev Sancheti
Designation :	Chief Financial Officer
Date of Birth/Age :	41 years
Qualification :	B. Com, ACA
Experience :	16 years
Name :	Mr. Deepak Gupta
Designation :	Head – HRD
Date of Birth/Age :	42 years
Qualification :	B. Sc, MBA
Experience :	20 years

SHAREHOLDING PATTERN

As on 30.09.2008

Names of Shareholders	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group
Indian
Individuals/ Hindu Undivided Family	234296	0.20
Bodies Corporate	28862689	24.85
Public shareholding
Institutions
Mutual Funds/ Axis	9314767	8.02
Financial Institutions ^/Banks	18178	0.02
Foreign Institutional Investors	52021191	44.79
Non-institutions
Bodies Corporate	15010777	12.92
Individuals -i. Individual shareholders holding nominal share capital up to Rs.0.100 Million.	7474321	6.44
ii. Individual shareholders holding nominal share capital in excess of Rs.0.100 Million.	1705684	1.46
Any Other (specify)	345643	0.30
Shares held by custodians and against which Depository Receipts have been issued	1157252	1.00
Total	116144798	100.00

BUSINESS DETAILS

Line of Business :	Leasing and Hire Purchase of Construction Equipments, Commercial Vehicles and Automobiles in India.
Products :	Leasing Hire purchase Full fledged money changer
Imports :
Countries :	Germany Sweden USA China Singapore

GENERAL INFORMATION

No. of Employees :

420

Bankers :

Allahabad Bank

Facilities :

Secured Loan	31.03.2008 (Rs. in Millions)
Term Loans:
- Foreign Banks	4002.000
- Foreign Financial Institutions	1800.900
Public Deposits	74.900
Total	5877.800
Unsecured Loan	31.03.2008 (Rs. in Millions)
Subordinated Bonds	868.600
Short Term Loans and Advances :
- Others	2195.500
Total	3064.100

Banking Relations :	Good
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Address :	Park Plaza, South Block, Flat 4A, 71, Park Street, Kolkata – 700016, India
Associates:	Quipo Infrastructure Equipment Limited [Formerly Indian Infrastructure Equipment Limited]
Subsidiaries/ Group Companies :	Srei Capital Markets Limited Address : Vishwakarma, 86C, Topsia Road (South), Kolkata – 700046 Line of Business: Structuring of capital issues, preparation of techno economic feasibility and project reports, mergers and acquisitions, resource mobilisation, organising venture capital funding, private placement of equity and debt syndication Srei Insurance Services Limited Address : Vishwakarma, 86C, Topsia Road (South), Kolkata – 700046 Lime of Business: Composite broker for the insurance sector Srei Insurance Agency and Broking Limited Address : Vishwakarma, 86C, Topsia Road (South), Kolkata – 700046 Line of Business: Corporate Insurance Agency Srei Money Mall Limited Address : 77 Park Street, Kolkata – 700016 Line of Business: One stop shop for a wide array of retail services Srei Venture Capital Limited Address : Vishwakarma, 86C, Topsia Road (South), Kolkata – 700046 Line of Business : Float various types of venture capital funds Global Investment Trust Limited Address: Vishwakarma, 86C, Topsia Road (South), Kolkata – 700046 Line of Business: Trusteeship activities Srei Forex Limited Address: 77 Park Street, Kolkata – 700016 Line of Business: Fully fledged Money changer Indian Infrastructure Equipment Limited Address: Lakshmi Kunj, 8, Central Lane, Bengali Market, New Delhi – 110001 Line of Business: Equipment Rental IIS International Infrastructure Services GmbH Address: Lessingstrasse 40, 53113 Bonn, Germany Line of Business: Leasing and Renting of movable assets ZAO Srei Leasing Address: Russian 123289, Moscow, 38-3, 5^th Floor, Narodnogo, Opolchenia Street Line of Business : Leasing of equipment and relevant financing Aermid Srei Healthcare Finance Limited Address: 107, Warnford Court, 2^nd Floor, Room no. 107, 29, Throgmorton Street, London, EC 2N 2AT, UK Line of Business : Leasing of healthcare equipment Srei Equipment Finance Private Limited Srei Insurance Broking Private Limited Bengal Srei Infrastructure Development Limited Srei Infrastructure Advisors Limited Cyberabad Trustee Company Private Limited Hyderabad Information Technology Venture Enterprises Limited IIS International Infrastructure Services Gmbh, Germany Quippo Infrastructures Equipment Limited Quippo Oil and Gas Infrastructures Limited Quippo Telecom Infrastructures Limited NAC Infrastructures Equipment Limited Golndustry Quipo Valuers and Auctioneers Private Limited Srei Sahaj e-village Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
400000000	Equity Shares	Rs.10/- each	Rs.4000.000 Millions
30000000	Preference Shares	Rs.100/- each	Rs.3000.000 Millions
	Total		Rs.7000.000 Millions

Issued, Subscribed Capital :

No. of Shares	Type	Value	Amount
116617625	Equity Shares	Rs.10/- each	Rs.1166.176 Millions

Paid-up Capital :

No. of Shares	Type	Value	Amount
116144798	Equity Shares	Rs.10/- each	Rs.1161.400 Millions
	Add: Forfeited Shares		Rs.1.500 Millions
	TOTAL:		Rs.1162.900 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		1162.900	1090.900	1090.900
2] Share Application Money		178.000	0.000	0.000
3] Reserves & Surplus		5239.900	3679.400	3014.300
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		6580.800	4770.300	4105.200
LOAN FUNDS
1] Secured Loans		5877.800	23263.900	13280.800
2] Unsecured Loans		3064.100	9771.100	2866.500
TOTAL BORROWING		8941.900	33035.000	16147.300
DEFERRED TAX LIABILITIES		0.000	644.700	644.700
Mezzanine Capital		0.000	0.000	796.500
TOTAL		15522.700	38450.000	21693.700
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		44.500	4346.100	2237.500
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		3281.800	1466.800	1038.900
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	0.000	0.000	108.200
	Sundry Debtors	0.000	0.000	16.900
	Cash & Bank Balances	842.100	0.000	36.800
	Other Current Assets	1705.800	32598.400	18269.300
	Loans & Advances	13294.400	1712.200	841.000
Total Current Assets		15842.300	34310.600	19272.200
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	893.900	1078.700	332.200
	Provisions	204.000	655.500	582.300
Total Current Liabilities		1097.900	1734.200	914.500
Net Current Assets		12196.400	32576.400	18357.700
MISCELLANEOUS EXPENSES		0.000	60.700	59.600
TOTAL		15522.700	38450.000	21693.700

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		4590.500	3979.900	2267.800
Other Income		684.600	20.800	4.700
Total Income		5275.100	4000.700	2272.500
Profit/(Loss) Before Tax		1133.100	857.900	682.000
Provision for Taxation		53.500	65.400	197.800
Profit/(Loss) After Tax		1079.600	792.500	484.200
Earnings in Foreign Currency :		NA	13.200	NA
Expenditures :
	Administrative and Other Expenses	568.800	544.800	357.400
	Finance Charges	3022.200	2146.600	1067.300
	Depreciation	361.200	332.400	94.500
	Miscellaneous Expenses	6.100	7.300	10.800
	Bad Debts written off	0.000	25.100	21.900
	Provisions as per the norms of Reserve Bank of India and Foreign Financial Institutions	171.800	77.800	29.800
	Provision for Premium on Unsecured Subordinated Bonds	11.900	8.800	8.800
Total Expenditure		4142.000	3142.800	1590.500

QUARTERLY RESULTS

PARTICULARS	30.06.2008 (1^st Quarter)	30.09.2008 (2^nd Quarter)
Sales Turnover	1015.700	1076.700
Other Income	11.500	25.400
Total Income	1027.200	1102.100
Total Expenditure	133.400	498.000
Operating Profit	893.800	604.100
Interest	404.000	355.600
Gross Profit	489.800	248.500
Depreciation	2.200	21.200
Tax	55.200	64.700
Reported PAT	321.900	162.600

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Debt-Equity Ratio	3.76	5.63	4.67
Long Term Debt-Equity Shares	3.14	4.44	2.77
Current Ratio	4.44	3.70	2.32
TURNOVER RATIOS
Fixed Assets	2.17	1.11	1.72
Inventory	0.32	0.16	0.17
Debtors	132.54	82.92	268.93
Interests Cover Ratio	1.37	1.40	1.64
Operating Profit Margin (%)	85.62	83.41	81.14
Profit Before Interests and Tax Margin (%)	78.77	75.10	76.98
Cash Profit Margin (%)	27.31	28.12	25.47
Adjusted Net Profit Margin (%)	20.47	19.81	21.31
Return On Capital Employed (%)	15.65	10.23	10.77
Return On Net Worth (%)	19.32	17.86	16.86

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject commenced its activates in 1989. The Company is engaged in the leasing and hire purchase of construction equipment, commercial vehicles and automobiles in India. The company is also authorised to purchase foreign currency notes and travellers cheques. Company entered into an agreement with Citicorp Service Inc., USA to market Visa Travel Money cards under its own brand name. The Company tapped the capital market in Jul.'92 to set up a 100% EOU to manufacture acetate cigarette filter rods and commenced production in Mar.'93.  

In Jan.'94, the company got approval as category-I merchant banker. The merchant banking division offers various services like corporate advisory services, project counselling, preparation of project reports and appraisal, underwriting and issue management, etc. The company extended its operations by venturing into mutual funds, corporate stock broking, housing finance and other related areas.  

The company achieved a capital adequacy of 21.93% towards the end of 2000-2001 as against a minimum 12% recommended by RBI.SREI entered into a six year project with IFC, Washington to finance Rs.650.000 Millions of solar energy systems across rural India. The project is being implemented on behalf of the Global Environment Facility (GEF) of the World Bank the Photo Voltaic Market Transformation Initiative (PVMTI). 

Company financed for the Tanir Bavi Power Corporation Private Limited, in 2000-2001. The project envisages setting up of a Rs.8800.000 Millions and 220 MW barge-mounted naptha-based combined cycle power plant on BOO basis at Mangalore, Karnataka. 

The name of the company has been changed during May 2005 from SREI International Finance Limited to Company.

OPERATIONAL REVIEW: 

INFRASTRUCTURE EQUIPMENT FINANCE

Subject equipment finance business was hived off to its joint venture Company formed through its association with BNP Paribas Lease Group (BPLG), a wholly owned subsidiary of BNP Paribas Bank, in May 2007. The Joint Venture Company, now termed Srei Equipment Finance Private Limited, launched operations effective from 2nd April, 2008 upon receipt of all necessary legal and statutory clearances. Through the joint venture Company, they will extend their financing services from construction equipment to medical, IT agricultural, office and other equipment.

ACHIEVEMENTS

• Disbursements reached Rs.57369 million achieving a growth of 33 percent from 2006-07.

• The construction equipment financing industry in India with a 30 percent market share.

• Was a co-sponsor of EXCON, the bi-annual exhibition of construction equipment, organised by CII at Bangalore.

• Four more editions of “Paison Ki Nilami” were held at Ahmedabad, Pune, Vijaywada and Chennai.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

ECONOMIC REVIEW

According to the World Economic Outlook (WEO) of the International Monetary Fund (IMF), the forecast for global real GDP growth, on a purchasing power parity basis, is expected to slow from 4.9 per cent in 2007 to 3.7 per cent in 2008. The slowdown of the US economy and an inflationary situation across the globe are primarily responsible for this. The sub-prime crisis in the US has eventually spread all across the world and created a global credit crisis of mammoth proportions. The inflation across the globe has been on account of rising food, metal and fuel prices. The phenomenal jump in crude oil price in a span of few months has contributed largely to this global inflation.

Since the beginning of the turbulence in August 2007, central banks in advanced economies have responded with both conventional and unconventional measures to ease liquidity stress in financial markets and solvency issues among large financial institutions. Some central banks such as the US Federal Reserve, the Bank of England, the Bank of Canada have cut policy rates since the third quarter of 2007 when the financial market turmoil surfaced. Central banks of several countries, including the Euro area, New Zealand, Japan, Korea, Malaysia, Thailand and Mexico have kept their rates unchanged since the last quarter of 2007. Central banks of Australia, China, Brazil have increased their policy rates.

Performance of the Indian economy in 2007-08 was impressive. India’s real GDP grew by 9 per cent over a high base of 9.6 per cent growth registered in 2006-07. Industry and services sectors grew at 8.5 per cent and 10.8 per cent respectively, while agriculture and allied activities grew at 4.5 per cent. India managed to attract foreign direct investment (FDI) of USD 25 billion. India’s exports grew to USD 155 billion. India’s foreign exchange reserves crossed the USD 300 billion mark. However, India too faces a scenario of rising inflation, despite the economy being artificially insulated to a large extent from the oil price rise in international markets. To manage inflation, the Reserve Bank of India (RBI) has adopted an approach of monetary tightening.

In a year of adverse developments on both global and domestic fronts, GDP growth is definitely headed for some degree of moderation. Most forecasts from different national and international agencies have put it within a range of 7.5-8.5 per cent for the year 2008.

The government realisms that the current inflation has been instigated by supply-side factors. The last five years of high growth has started challenging the carrying capacity of the economy. Thus, speedy creation of physical infrastructure is the need of the hour. However, getting long term funds which are a prerequisite for infrastructure is a challenge in today’s scenario of scarce funds and high interest rates. The recent move to liberalise access to external commercial borrowings (ECBs) at competitive rates by infrastructure companies is one step to address that challenge. The initiatives on setting up a bond market announced in the last Union Budget will also go a long way in meeting the need for long-term funds for infrastructure.

The food price rise calls for overall development of the agricultural sector and with that the growth of the rural economy. To ensure that the benefits of economic reforms reach the masses most of whom reside in India’s rural hinterland, the Bharat Nirman programmed has already been launched. However, government’s efforts need to be supplemented with private initiatives especially from the corporate sector.

All these developments have a bearing on the Company’s performance, directly or indirectly. The management closely monitors these and continuously assess the situation so that necessary and timely action can be taken in order to the Company achieve its goals. Some of these events even act as triggers for the Company to conceptualise new initiatives.

BUSINESS OUTLOOK AND FUTURE PLANS: 

The government continues to have its focus in building infrastructure assets. Government realises that creating infrastructure capacity is the only way to maintain the high growth momentum. As per government estimates, a minimum investment of USD 500 billion would be required only in the infrastructure sectors over the next five years. This unfolds huge opportunities for the Company.

The ‘Bharat Nirman’ programme, aimed at developing rural infrastructure namely roads, housing, irrigation, water supply, electrification and telecom, has made impressive progress and the outlay for Bharat Nirman has been increased by 27.1 per cent to Rs.312800.000 millions. The corpus for Rural Infrastructure Development Fund (RIDF-XIV) has been raised to Rs.140000.000 millions from last year’s Rs.120000.000 millions with a separate window for rural roads.

In the road & highway sector, allocation for the National Highway Development Programme (NHDP) has been enhanced to Rs.129660.000 Millions in 2008-09. The Golden Quadrangle is 96.48 per cent complete and the North-South and East-West corridors have been completed 23.36 per cent. In totality, the NHDP project is aimed to construct, widen, rebuild more than 40,000 km of NH involving a total investment of over Rs.2 trillion. The preferred mode for undertaking such projects is the build-operatetransfer (BOT) mode and its variants.

Special attention is being paid to the ongoing Special Accelerated Road Development Programme - North East (SARDP-NE) spanning 7639 km of roads and the Rs.600 billion Pradhan Mantri Gram Sadak Yojana whose target deadline is 2010-11. Hectic activity in road building is also taking place at the state and city levels.

The power sector will be a focus area for the government during 2008-09. Despite several groundlevel problems, government has laid down 3 ambitious missions – (a) power availability for all by 2012, (b) electrification of all villages by 2010, and (c) access to electricity for all households by 2010. As against the Tenth Plan (2007-12) target for capacity addition of 78,577 MW, about 10,000 MW has been achieved till March 2008. After awarding of 3 ultra mega power projects (UMPPs) each of 4,000 MW capacity, 6 more are in the pipeline. The Rajiv Gandhi Grameen Vidyutikaran Yojana is being given special importance. The Accelerated Power Development and Reforms Project (APDRP), aimed at reducing aggregate technical and commercial (ATC) losses, has been awarded Rs.800.000 Millions for 2008-09. Government will also facilitate setting up of merchant power plants by private developers and private participation in transmission projects.

Ports figure prominently in government’s development agenda. The National Maritime Development Programmed (NMDP) for modernization of the port sector has undertaken projects that cover the entire gamut of activities in the port sector which include berth development, deepening of channel, procurement of equipment and port craft, rail/road connectivity and other associated work. Private sector players are already active in the port sector. Total proposed outlay for Eleventh Plan period for the major ports is Rs.1755.124 Millions, of which the gross budgetary support is Rs.205.698 Millions. Private sector investment is anticipated to the tune of Rs.3686.824 Millions. The 12 major ports which handle nearly 75 per cent of the total cargo traffic handled a total cargo of 519.10 million tonne in 2007-08.

BUSINESS REVIEW

The three main business areas of the Company has been in Infrastructure Equipment financing, Infrastructure Project financing and Infrastructure Advisory.

SUBSIDIARY COMPANIES: 

The Company, in order to cash on profitable leasing business internationally has invested further Euro 34,00,000 in the Share capital of IIS International Infrastructure Services GmbH, the subsidiary company incorporated in Germany.

‘Srei Infrastructure Development Finance Limited’ was converted into a private limited company w.e.f. 28^th September, 2007 and the name was subsequently changed to ‘Srei Equipment Finance Private Limited’ w.e.f. 30th May, 2008. The Company’s shareholding in the aforesaid company is fifty per cent w.e.f. 2nd April, 2008 consequent upon infusion of Rs.7750.000 Millions by BNP Paribas Lease Group. The Company’s shareholding in ‘Srei Sahaj e-Village Limited’ is fifty one per cent consequent upon infusion of fresh capital in the said company.

The name of ‘Srei Insurance Services Limited’ was changed to ‘Srei Insurance Broking Limited’ w.e.f. 27^th August, 2007 and it was subsequently converted into a private limited company w.e.f. 23rd April, 2008. The said company has become a subsidiary of ‘Srei Equipment Finance Private Limited’ w.e.f. 1st January, 2008 consequent upon the Scheme of Arrangement becoming effective. The name of ‘Srei Insurance Agency and Broking Limited’ was changed to ‘Srei Investment Advisors Limited’ w.e.f. 7th March, 2008 and subsequently to ‘Srei Infrastructure Advisors Limited’ w.e.f. 23rd April, 2008.

Srei Venture Capital Limited, a subsidiary of the Company acquired management control and fifty one per cent shareholding of two companies, namely, ‘Hyderabad Information Technology Venture Enterprises Limited’ and ‘Cyberabad Trustee Company Private Limited’ in August, 2007.

In view of the exemption received from Ministry of Corporate Affairs, Government of India vide Letter no. 47/41/2008-CL-III dated 29th February, 2008, the audited statement of accounts along with the reports of the Board of Directors and Auditors relating to your Company’s subsidiaries in India and Overseas viz., Srei Equipment Finance Private Limited (formerly Srei Infrastructure Development Finance Private Limited), Srei Forex Limited, Srei Capital Markets Limited, Srei Infrastructure Advisors Limited (formerly Srei Investment Advisors Limited), Srei Insurance Broking Private Limited (formerly Srei Insurance Services Limited), Srei Venture Capital Limited, Srei Sahaj e-Village Limited (formerly Srei Money Mall Limited), Global Investment Trust Limited, Bengal Srei Infrastructure Development Limited (subsidiary of Srei Capital Markets Limited), Hyderabad Information Technology Venture Enterprises Limited (subsidiary of Srei Venture Capital Limited), Cyberabad Trustee Company Private Limited (subsidiary of Srei Venture Capital Limited) and IIS International Infrastructure Services GmbH, Germany for the financial year ended 31st March, 2008, and ZAO Srei Leasing, Russia (subsidiary of IIS International Infrastructure Services GmbH, Germany) for the financial year ended 31st December, 2007 is not annexed as required Section 212(8) of the Companies Act, 1956. Shareholders who wish to have a copy of the full report and accounts of the aforesaid subsidiary companies will be provided the same by the Company Secretary on receipt of a written request from them. These documents will also be available for inspection by any shareholder at the registered office of the Company and the concerned subsidiary companies during business hours on all working days. However, as directed by the Ministry of Corporate Affairs, Government of India, the financial data of the subsidiaries have been separately furnished and forms part of the Annual Report.

FIXED ASSETS:

• Freehold Land
• Buildings
• Furniture & fixtures
• Motor Vehicles
• Plant and Machinery
• Winds Mills
• Ships
• Earthmoving Equipment

DIRECTORS PROFILE:

Mr. Salil K. Gupta, Chief Mentor of the Company, with more than 50 years of experience, has been the former Chairman of West Bengal Industrial Development Corporation Limited (a leading State financial institution), and has also been the former President of the Institute of Chartered Accountants of India.

Mr. Hemant Kanoria, Chairman and Managing Director of the Company, has over 28 years of industry experience. He is the former President of the Calcutta Chamber of Commerce, past Chairman of the NBFI Task Force, the Federation of Indian Chamber of Commerce and Industry and a member of the Steering Committee of The Energy & Resources Institute’s Repository of Environmental Activities and Technology, former member of Board of Governors of Indian Institute of Management, Calcutta and Chairman, Infrastructure Committee, Confederation of Indian Industry (Eastern Region).

Mr. V. H. Pandya, is an associate of the Indian Institute of Bankers. He has spent over 43 years in the banking and financial industry, holding of offices with India’s central bank, the Reserve Bank of India (RBI), the capital markets regulator, Securities and Exchange Board of India (SEBI) and the Industrial Development Bank of India (IDBI).

Mr. S. Rajagopal, possesses over 35 years of experience in the banking industry. He has been the former Chairman and Managing Director of Bank of India and a former Chairman of Indian Bank.

Mr. Sunil Kanoria, has with over 20 years of experience in the financial service industry. He is a governing body member of Construction Industry Development Council (CIDC), ASSOCHAM and among other responsibilities, has served as past President in Merchants’ Chamber of Commerce, Federation of Indian Hire Purchase Association (FIHPA) and Hire Purchase and Lease Association (HPLA).

Mr. Saud Siddique, has 22 years of rich experience in global infrastructure financing including asset securitisations and receivable financing. He was the former Principal Investment Officer of International Finance Corporation (IFC), Washington D.C., USA and worked with Swiss Bank Corporation as Assistant Vice President, USA.

Mr. Daljit Mirchandani, is currently the Chairman of Ingersoll-Rand in India. Mr. Mirchandani has held several key positions in the Kirloskar Group, including Executive Director in Kirloskar Oil Engines, the flagship Company of the Kirloskar Group (KOEL). He was also the Chairman of the Karnataka State council of the Confederation of Indian Industries (CII) in 2005.

Mr. Somabrata Mandal, is the partner of Fox Mandal Little, one of the leading law firms in India. While he was the Managing partner of Fox Mandal Little, the firm won the Best National Law Firm of the Year Award (2006) for India at the IFLR. He has successfully managed to maintain the firm position as the largest law firm in India.

Mr. P. K. Pandey, has more than 36 years of experience in the industry and service sector. Having held several senior executive positions, he has managed several infrastructure projects during his tenure and handled a captive mining operation as an autonomous business unit.

Mr. K. K. Mohanty, has 33 years of experience in asset financing, project funding, profit and credit appraisal, structuring syndication and receivables management including 11 years’ experience in the Orissa State Financial Corporation.

Mr. Shyamalendu Chatterjee, has over 41 years of experience in Commercial and Investment Banking. He was the Executive Director of Axis Bank Limited Mumbai since May 2002. He has extensive exposure in the areas of International Banking and has also worked in SBI London for 3 years and in Washington D. C. for 5 years. He has achieved expertise in the areas of Corporate Finance, International Banking, Retail Banking, Project Financing, Balance Sheet Management etc.

PRESS RELEASE:

Srei total business done grows by 60 per cent to Rs.46562.200 Millions.

Kolkata, October 30, 2008: Srei Infrastructure Finance Limited the leading infrastructure institution has grown its asset book and improved other performance parameters in spite of the global financial crisis. The total consolidated income for the half year ended September 30, 2008 went up to Rs.4691.600 Millions from Rs.2918.300 Millions in the corresponding period of the previous fiscal year, recording a growth of 61%.

The total consolidated asset under management increased to Rs.96976.700 Millions from Rs.62022.700 Millions during the same period last year, growing by 56%.

Srei has maintained its robust growth in the half year under review, registering an increase in consolidated profit before tax to Rs.1060.700 Millions from Rs.636.000 Millions in the corresponding half-year period last year. The consolidated net profit after tax has gone up to Rs.693.800 Millions from Rs.565.000 Millions, during the same period last year, witnessing a rise of 23%. The consolidated operating profit increased to Rs.1225.600 Millions in the first six months from Rs.873.400 Millions in the same period last year, up by 40%.

Disbursements were more than satisfactory for the first six months of the fiscal year 2008-09 at Rs.46562.200 Millions as against Rs.29155.800 Millions in the corresponding period last year, posting an increase of 60%.

Speaking at a press conference shortly after the board meeting on Thursday, Mr. Hemant Kanoria, Chairman and Managing Director, Srei said, “Our disbursement in the first half of the financial year has been quite good at 46562.200 Millions recording a growth of 60% and the profits have also been decent. However, the global financial crisis will definitely expose all companies to new set of challenges in the next few months. We at Srei, had capitalised ourselves well in the beginning of this financial year and hence are prepared for the testing times ahead.”

The Company has seamlessly progressed from financing infrastructure equipment to a complete infrastructure solutions provider expanding its products to infrastructure project financing, development, advisory, investment banking and fund management.

Acknowledging the challenges of the recent global meltdown which is likely to hurt India’s economy, Mr. Kanoria said that the Government will have to take proactive steps for releasing substantial funds into the infrastructure sector. “The government will have to increase it’s spend in the infrastructure sector and rely on greater private sector partnership to pull back the economy from an impending gloom”, Mr. Kanoria said.

Meanwhile, the Company’s joint venture with BNP Paribas Lease Group is now fully operational. With adequate capitalisation, Srei-BNP Company has exceeded its target for disbursements in the infrastructure equipment segment in the first half of the year.

Also, Srei Sahaj e-Village Limited, one of the largest ICT based rural infrastructure initiatives in the country, has been rapidly expanding its common service centre (CSC) roll out programs in all six states of West Bengal, Uttar Pradesh, Bihar, Orissa, Assam and Tamilnadu. The Company hopes to complete its envisaged target of establishing nearly 25,000 CSCs by the end of next year.

About Srei Infrastructure Finance Limited

Srei is an Integrated Infrastructure Institution, constantly and consistently ideating to deliver innovative Infrastructure solutions to the nation for over two decades, both in urban and rural India. One of the leading private sector infrastructure organisations, Sreis business ranges from Infrastructure Equipment Finance, Project Finance, Project Advisory and Project Development to E-governance, Investment Banking, Venture Funds, Insurance Broking and Equipment Rental through Quippo. Srei operates across the country with a network of 63 offices and also has its operations in Russia with 3 offices. Srei is the first Indian Infrastructure Financing Institutions to be listed on the London Stock Exchange (LSE). BNP Paribas Lease Group, a subsidiary of BNP Paribas with an asset base of over EURO 1, 694 Billion has apartnership with Srei.

SREI Group 85 % increase in Profit After Tax in Q1

Kolkata, July 30, 2008: SREI Infrastructure Finance Limited has posted an impressive consolidated profit after tax of Rs.432.000 Millions for the first quarter ended June 30, 2008. This is a 85% rise over the corresponding quarter’s profit of Rs.233.200 Millions in the previous year. Country’s leading Infrastructure Institution in the private sector, SREI has continued to maintain the tempo of growth of the last fiscal with consolidated Assets under Management going up to Rs.91908.700 Millions in Q1 as against Rs.56897.200 Millions achieved in the same period of the previous year resulting in an increase of 62%.

The financials reflect the company's business post transfer of the asset finance business to its joint venture with BNP Paribas Lease Group, subsidiary of the BNP Paribas Bank.

The consolidated business done during this quarter is Rs.17870.000 Millions as against Rs.14610.000 Millions in the corresponding period last year, registering a growth of 22%. The consolidated operating profit this quarter increased by 94% to Rs.768.400 Millions from Rs.396.500 Millions in the first quarter of the last fiscal on a consolidated total income of Rs.2219.200 Millions (Rs.1278.400 Millions in the same period of the previous year). Likewise, consolidated pre-tax profits upped to Rs.656.000 Millions in Q1, 2008 from Rs.250.800 Millions in the corresponding quarter of last year, a rise of 162%.

SREI has strategically positioned itself in the Indian Infrastructure development sector to capitalise on the huge business potential in this area. “With the Public Private Partnership (PPP) route to developing key infrastructure, fast gaining ground, the company has put in place a strong team of professionals internally and a string of technical partnerships externally to make bids for large infrastructure projects in the ports, roads and power plants sectors, among others,” said Mr. Sunil Kanoria, Director of the Company. “SREI and its subsidiaries are also extending its financial assistance to sectors like aviation, oil and gas, transport, telecom, industrial parks etc,” he added.

SREI has continued to utilise its long-standing strategic relationships with the manufacturers as well as construction companies on a pan India basis, which has helped the company to position itself strongly in terms of its delivery.

The company's 'pride' project, Srei Sahaj e-Village Limited has made rapid strides in the past one year in its effort to implement the central government sponsored e-governance project. Under the National e-Governance Plan (NeGP), the company has already bagged nearly 25 per cent of the ambitious target of Government of India to set up a hundred thousand common service centres in rural areas. The company successfully bid for CSCs in six states covering nearly 1.5 lakh villages and a population size of over 210.000 Millions.

SREI has also decided to up it's ante in overseas countries. While it's Russian operation has begun to stabilize and hopes to cross an AUM size of 150 million USDs in a year's time, the company is looking to replicate similar asset financing models in other target areas such as the middle eastern countries and South East Asia.

Announcing the results, Mr. Sunil Kanoria, Director, SREI said, “We have been working continuously towards enhancement of stakeholder value. With the growth in infrastructure sector in our country and SREI’s focus in this segment, we are confident of continuous growth in the future. In spite of the present challenges in the economy, we believe that the infrastructure sector would continue to provide enough growth opportunities for the company.”

About SREI Infrastructure Finance Limited

SREI is an Integrated Infrastructure Institution, constantly and consistently ideating to deliver innovative Infrastructure solutions to the nation for over two decades, both in urban and rural India. One of the largest private sector infrastructure organizations, SREI’s business ranges from Infrastructure Equipment Finance, Project Finance, Project Advisory and Project Development to E-governance, Investment Banking, Venture Funds, Insurance Broking and Equipment Rental through QUIPPO. SREI operates across the country with a network of 55 offices and also has its operations in Russia with 3 offices. SREI is the first Indian Infrastructure Financing institutions to be listed on the London Stock Exchange (LSE). International Finance Corporation (IFC) Washington (World Bank Group), KfW Germany & DEG Germany (Financial Institutions owned by the Government of Germany), FMO the Netherlands (Financial Institution owned by the Government of Netherlands), BIO Belgium (Financial Institutions owned by the Government of Belgium) and FINFUND Finland (Financial Institution owned by the Government of Finland) are among the large stakeholders in the Company. BNP Paribas Lease Group, a subsidiary of BNP Paribas Bank with an asset base of over EURO 1, 694 Billion has a partnership with SREI.

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

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
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	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		47

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