MIRA INFORM REPORT

Report Date :

04.01.2011

IDENTIFICATION DETAILS

Name :	MAHANAGAR TELEPHONE NIGAM LIMITED
Registered Office :	Jeevan Bharti Building, Tower-1, 12^th Floor, 124, Connaught Circus, New Delhi - 110 001
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	28.02.1986
Com. Reg. No.:	55-023501
CIN No.: [Company Identification No.]	L3210DL1986GOI023501
Legal Form :	Public Limited Liability Company. The company shares are listed on the Stock Exchange.
Line of Business :	Basic Telephone, Mobile Telephone and Internet Service Provider.

RATING & COMMENTS

MIRA’s Rating :

A (68)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 377936000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and a reputed company having fine track. Financial position of the company appears to be sound. Fundamentals are strong and healthy. Trade relations are reported a fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions. It can we regarded as a promising business partner in medium to long run.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office :	Jeevan Bharti Building, Tower-1, 12^th Floor, 124, Connaught Circus, New Delhi - 110 001, India
Tel. No.:	91-11-23324587
Fax No.:	91-11-23716655
E-Mail :	dcsco@bol.net.in
Plant Locations:	Located At: Delhi Mumbai

DIRECTORS

As on 20.09.2010

Name :	Mr. Kuldip Singh
Designation :	Chairman and Managing Director/ Director (Technical)
Name :	Mrs. Anita Soni
Designation :	Director (Finance)
Name :	Mrs. Usha Sahajpal
Designation :	Director (HR)
Name :	Mr. Adit Jain
Designation :	Director
Name :	Mr. V.S. Iyer
Designation :	Director
Name :	Dr. Vijay Aggarwal
Designation :	Director
Name :	Mr. T.S. Narayanasami
Designation :	Director
Name :	Dr. Rajan Saxena
Designation :	Director
Name :	Mr. N.K. Joshi
Designation :	Director
	BOARD LEVEL COMMITTEES
I. Audit Committee
Name :	Mrs. Usha Sahajpal
Designation :	Chairperson
Name :	Mrs. Anita Soni, Director (Finance)
Designation :	Permanent Invitee
Name :	Mr. V.S. Iyer
Designation :	Member
Name :	Mr. Adit Jain
Designation :	Member
Name :	Mr. S.R. Sayal, Company Secretary
Designation :	Secretary
II. Investors/Shareholders Grievances Committee
Name :	Mrs. Usha Sahajpal
Designation :	Chairperson
Name :	Mrs. Anita Soni, Director (Finance)
Designation :	Member
Name :	Mr. S.R. Sayal, Company Secretary
Designation :	Secretary

KEY EXECUTIVES

Name :	Mr. S.R. Sayal
Designation :	Company Secretary
Name :	Mr. J.S. Deepak
Designation :	Joint Secretary (T), Department of Telecom
Name :	Mr. Manish Sinha
Designation :	DDG (LF)
Name :	Mr. Manjit Singh
Designation :	Executive Director (Delhi)
Name :	Mr. J. Gopal
Designation :	Executive Director (Mumbai), M.T.N.L.

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2010

Category of Shareholder	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Central Government / State Government(s)	354,372,740	59.09
Sub Total	354,372,740	59.09
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	354,372,740	59.09
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	4,017,767	0.67
Financial Institutions / Banks	132,274,526	22.06
Foreign Institutional Investors	38,432,755	6.41
Sub Total	174,725,048	29.14
(2) Non-Institutions
Bodies Corporate	21,077,209	3.51
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	34,145,925	5.69
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	12,111,781	2.02
Any Others (Specify)	3,273,101	0.55
Clearing Members	1,863,749	0.31
Trusts	141,940	0.02
Non Resident Indians	1,267,412	0.21
Sub Total	70,608,016	11.77
Total Public shareholding (B)	245,333,064	40.91
Total (A)+(B)	599,705,804	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	30,294,196	-
Total (A)+(B)+(C)	630,000,000	-

BUSINESS DETAILS

Line of Business :	Basic Telephone, Mobile Telephone and Internet Service Provider.
Services :	Telephone Service Broad Band GSM Telex Circuits

GENERAL INFORMATION

No. of Employees :	44910 (Approximately)
Bankers :	State Bank of India, New Delhi/Mumbai Indian Overseas Bank, New Delhi/Mumbai Punjab National Bank, Mumbai Oriental Bank of Commerce, New Delhi Central Bank of India, Mumbai Dena Bank, Mumbai Union Bank of India, Mumbai United Bank of India, New Delhi Syndicate Bank, Mumbai Vijaya Bank, New Delhi/Mumbai Indian Bank, New Delhi ICICI Bank, Mumbai Axis Bank, Mumbai

Banking Relations :	--
Statutory Auditors:
Name 1 :	Bansal Sinha and Company Chartered Accountants
Address :	18/19, Old Rajinder Nagar, New Delhi - 110 016, India.
Tel. No.:	91-11-25722270/ 25853424
Fax No.:	91-11-41046530
Email:	bsc@bansalsinha.com
Website:	http://www.bansalsinha.com
Name 2 :	Goel Garg and Company Chartered Accountants
Address :	18, National Park, Lajpat Nagar - IV, New Delhi – 110 024, India
Tel. No.:	91-11-41636825, 826
Branch Auditors 1:	C.V.K and Associates Chartered Accountant
Address:	No. 2, Samarath Apartments, D.S. Baprekar Road, Dadar (W), Mumbai-400028, Maharashtra, India.
Branch Auditors 2:	Goel Garg and Company Chartered Accountant
Address:	H-4, Masjid Moth, Greater Kailash-II, New Delhi-110048, India.
Joint Ventures :	United Telecom Limited MTNL STPI IT Services Limited
Subsidiaries :	Millennium Telecom Limited Mahanagar Telecom Mauritius Limited Department of Telecommunications (Holding 56.25% shares of the Company)

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
800000000	Equity Share	Rs.10/- each	Rs.8000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
630000000	Equity Share	Rs.10/- each	Rs.6300.000 Millions

Note:

Out of above Shares

i) 599998400 equity shares are allotted as fully paid up pursuant to a contract without payment being received in cash out of which 354372740 shares are held by the Government of India.

ii) 30000000 equity shares are allotted as fully paid up represented by Global Depository Receipt (GDRS) through an international offering in US Dollars. One GDR represented two equity shares. In November 2001, the GDRS were exchanged in American Depository Shares (ADSS) on a one for one basis. One ADS also represents two of our equity shares.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		6300.000	6300.000	6300.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		111714.100	114293.680	112913.580
4] (Accumulated Losses)		(23530.140)	0.000	0.000
NETWORTH		94483.960	120593.680	119213.580
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		0.000	0.000	0.000
DEFERRED TAX LIABILITIES		0.000	3552.960	4865.160
TOTAL		94483.960	124146.640	124078.740
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		165549.760	62838.340	63197.960
Capital work-in-progress		11779.600	9504.790	9649.850
INVESTMENT		5095.370	4650.920	5573.920
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1585.120	1912.680	1607.050
	Sundry Debtors	7200.370	7824.670	9417.970
	Cash & Bank Balances	48753.900	48027.980	33693.600
	Other Current Assets	3115.910	3430.750	2385.170
	Loans & Advances	105000.050	95252.510	94512.740
Total Current Assets		165655.350	156448.590	141616.530
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	15906.930	12061.830	43093.000
	Other Current Liabilities	155037.530	36290.750
	Provisions	82651.660	61910.320	54458.220
Total Current Liabilities		253596.120	110262.900	97551.220
Net Current Assets		(87940.770)	46185.690	44065.310
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
DEFERRED REVENUE EXPENDITURE		0.000	966.900	1591.700
TOTAL		94483.960	124146.640	124078.740

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income from Services	36561.000	44559.990	47225.170
		Other Income	14017.230	7942.750	6074.160
		TOTAL (A)	50578.230	52502.740	53299.330
Less	EXPENSES
		Employees' Remuneration other than retirement Benefits	19681.410	14393.680	39914.420
		Employees' Remuneration for retirement Benefits-Provisions	29981.090	6880.280
		Revenue Sharing	5256.780	7525.730
		Licence Fee	3837.020	4285.750
		Administrative, Operating & Other Expenses	8403.450	9779.380
		TOTAL (B)	67159.750	42864.820	39914.420
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		(16581.520)	9637.920	13384.910
Less	INTEREST (D)		12.610	11.530	27.820
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(16594.130)	9326.390	13357.090
Less/ Add	DEPRECIATION/ AMORTISATION (F)		17594.940	6988.470	7040.600
	PROFIT BEFORE TAX (E-F) (G)		(34189.070)	2637.920	6316.490
Less	TAX (H)		(8079.350)	520.750	2248.310
	PROFIT AFTER TAX (G-H) (I)		(26109.720)	2117.170	4068.180
	Transfer from Contingency Reserve		2579.580	--	NA
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		--	--	--
Less	APPROPRIATIONS
		Interim / Final Dividend	--	630.000	NA
		Tax on Dividend	--	107.070	NA
		Transfer to General Reserves	--	1380.100	NA
	BALANCE CARRIED TO THE B/S		(23530.140)	--	NA
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	48.300	59.300	66.700
	TOTAL EARNINGS		48.300	59.300	66.700
	Earnings Per Share (Rs.)		(41.44)	3.36	9.32

QUARTERLY RESULTS

PARTICULARS	30.06.2010	30.09.2010
Type	1^st Quarter	2^nd Quarter
Net Sales	9716.260	10633.450
Total Expenditure	11123.570	12132.620
PBIDT (Excl OI)	(1407.310)	(1499.170)
Other Income	622.700	318.910
Operating Profit	(784.610)	(1180.260)
Interest	277.690	1438.850
Exceptional Items	0.000	0.000
PBDT	(1062.300)	(2619.110)
Depreciation	3445.040	3428.540
Profit Before Tax	(4507.340)	(6047.650)
Tax	0.460	0.450
Provisions and contingencies	0.000	0.000
Profit After Tax	(4507.780)	(6048.100)
Extraordinary Items	(6.570)	(0.790)
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	(4514.350)	(6048.890)

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(51.62)	4.03	11.85
Net Profit Margin (PBT/Sales)	(%)	(93.51)	5.92	13.37
Return on Total Assets (PBT/Total Assets}	(%)	(10.32)	1.20	3.08
Return on Investment (ROI) (PBT/Networth)		(0.36)	0.02	0.05
Debt Equity Ratio (Total Liability/Networth)		2.68	0.91	0.82
Current Ratio (Current Asset/Current Liability)		0.65	1.42	1.45

LOCAL AGENCY FURTHER INFORMATION

SUBSIDIARY COMPANIES

The company has two subsidiary companies namely:-

(i) MILLENNIUM TELECOM LIMITED (MTL):

Subject through MTL, a 50:50 joint venture of subject and BSNL had earlier invited global tender for laying of submarine cable, connecting both East and West coast of India to South –East Asia and Middle –East with an ultimate intent to connect to Europe and USA. However, because of decline in bandwidth prices and high cost of laying the cable, many operational and financial reasons, the project has got delayed. Since the cost of the tender was coming very high, it would not be possible for subject and BSNL alone to invest such a huge amount, hence, the possibility of forming a consortium with other operators was felt.

(ii) MAHANAGAR TELEPHONE (MAURITIUS) LIMITED (MTML)

MTML is a 100% subsidiary of subject. The company is having license for fixed telephone service, mobile service, international long distance services and internet services.

MTML is providing cost effective services for its customers. It has already rolled out its CDMA based fixed and mobile services as well as internet and ILD services. Presently. MTML has a customer base of appx. 104 K subscribers.

In addition, the company has also got GSM spectrum and have finalized the GSM equipment vendor for deployment of network.

JOINT VENTURES

The company has two joint ventures viz. UNITED TELECOMMUNICATIONS LIMITED (UTL) and MTNLSTPI IT SERVICES Limited

(i) UNITED TELECOMMUNICATIONS LIMITED (UTL)

The Joint Venture was incorporated in the year 2001 under the Companies Act of Nepal.

UTL has a total customer base of more than 4,16,825 in numbers and the PCOs are 1646.

UTL’s engineering team follows the O and M procedures scrupulously thereby ensuring a fault free network round the clock. The management closely monitors the overall performance of the network. The quality of services, parameters, subscriber complaints, fault rates, BTS wise traffic and ILD traffic are continuously kept under watch.

The company is sustaining its entire operations from internal revenue generations only. Monthly OPEX including the interest payment and other IUC charges, repayment of term loans, etc. are fully met within its bill collections.

(ii) MTNLSTPI IT SERVICES Limited

It is a 50:50 Joint-venture between Software Technology Parks of India (STPI) and Subject. The JV is setting up a data centre for Web-farming application at Chennai with the aim to provide exclusive date centre services, messaging services, business application services to the identified sectors of economic activity.

Order for infrastructure creation for data centre has been placed on M/s Wipro and the work has been completed. In the meantime, JV has already started commercially exploiting the created infrastructure by hosting servers of M/s TCS for MEA’s Passport Seva Service on commercial terms. Presently, The Company has floated tender for establishment of data centre equipments in Chennai. Further, the JV is also exploring the possibility of establishment of data centre at two more locations i.e. Delhi and Hyderabad in addition to Chennai.

CENTRE FOR EXCELLENCE IN TELECOM TECHNOLOGY AND MANAGEMENT (CETTM)

Their dream for having a world-class in house Training Centre furthered one step when CETTM (Centre of Excellence in Telecom Training and Management) was awarded ISO 9001:2000 certification. CETTM is slowly taking the lead role and becoming the nodal center for HRD. Induction Training programme for newly recruited executive Trainees in the field of Telecom, Finance, Marketing, HR, Legal have been conducted at CETTM. CETTM has started generating revenues by leasing out infrastructure and providing training to other organizations of repute.

VIGILANCE

The Vigilance organization of subject is headed by Chief Vigilance Officer. He is an officer in the rank of Joint Secretary, Government Of India. Presently Shri Khushi Ram, IRSSE, is the CVO of subject. The CVO is responsible for complete vigilance administration. During the period 2009-10 emphasis was laid on efficiency and transparency in working. During the period various steps were taken to empower customer oriented services of the organization. Training programmes/seminars and workshops have been conducted during the period to update the knowledge and skills of the officer working in vigilance. The Vigilance Awareness Week was celebrated from 03.11.09 to 07.11.09. During the Vigilance Awareness Week various activities including interaction with field staff and customers was undertaken to further improve the customer services based on the feedback/suggestions received from them. During the Vigilance Awareness Week information, booklets indicating various services provided by the subject and the complaint handling policy was distributed among the customers through Sanchar Hatts. Monthly Vigilance meetings were held regularly at HQs, Delhi and Mumbai to monitor the progress of Vigilance/Disciplinary cases. Remedial action was also undertaken for timely settlement of these cases. During the period, the vigilance Branch received 228 complaints and 139 Disciplinary cases were finalized. These complaints were expeditiously examined and necessary action taken thereupon. Regular inspections were also carried out by the vigilance officers and corrective action was suggested wherever required.

MANAGEMENT DISCUSSIONS AND ANALYSIS

This discussion contains forward looking statements, the performance of the company for the year 2009-10 and an outlook for the future. The report conveys expectations on future performance based on an assessment of current business environment. These could vary based on future developments.

INDUSTRY STRUCTURE AND DEVELOPMENTS

There has been a structural shift in the Indian economy over the past few years. The pace of growth has accelerated to a new level and there have been major productivity gains across a range of industries and services. The ensuing economic momentum has given rise to new and rising levels of income and prosperity. This has brought about a sea change in consumer preferences and life styles, opening up tremendous new opportunities in the telecom sector

OPPORTUNITIES AND THREATS

Given the headstart that the company has got in 3G services when compared with private operators, this lead could attract high end customers form other network to subject’s network.

The Government has extended full exemption from special additional duty of custom on components and accessories of mobile handset including cell phones for a year thereby ensuring the affordability of owning a mobile connection by general public.

MARKET RISKS

The telecommunications market in the cities of Delhi and Mumbai are among the most competitive markets. Subject faces intense competition from the other mobile operators and the basic service operators. This has led to an increased pressure on margins due to reducing tariffs and also on the customer retention and acquisition. The Average revenue per user is also going down. With new operators coming in Delhi and Mumbai, such competitive pressures are likely to increase further, putting a further strain on the margins. Recently DOT has issued LOIs to a number of new players which will lead to increased competition to market share. Subject is confirmed only in two cities i.e. Delhi and Mumbai, therefore subject is not able to expand its telecom services beyond its area of jurisdiction.

POLICY AND REGULATORY RISKS

The telecommunications sector in India is one of the highest taxed sector. The high level of license fee is a big strain on the finances of the company. This is paid over and above all other taxes and duties which are levied on all other businesses. Regulatory policies cannot be foretold and may at time, be such as to affect the financials of the company.

MANPOWER RISKS

There is a huge workforce and a large percentage of revenue is spent on staff. In comparison of the staff costs of other operators, it is much high in subject. This is a major risk which the company faces, as it has little flexibility in the matter and may have to continue to carry the cost.

Considering the tremendous growth of private sector and opportunities that have become available and availability of employment in telecom and IT sectors, retention of suitable manpower is a big challenge.

OUTSTANDING DUES

Over the years, the amount owned to subject by its customers had been increasing and accumulated significantly. Realisation of dues from customers has become even more difficult in the increasingly competitive telecom market as the customers can close the connection and take services of other operators. Efforts are being made to reduce the outstanding and some success has been achieved in bringing down total outstanding in a multi operator environment, this risk remains.

BRIEF RESUME OF DIRECTORS APPOINTED DURING THE YEAR/PROPOSED TO BE APPOINTED/ REAPPOINTED AT THE ANNUAL GENERAL MEETING

(i) Shri Adit Jain — Independent Director

Shri Adit Jain is the Chairman of IMA India, a business information company established in 1994. Previously Adit worked with Lazard India, an investment bank, as Vice President and Head, Corporate Advisory Services and was responsible for the Mergers and Acquisitions business. He has successfully handled assignments in the areas of public policy, entry strategy planning, location audits, competitor analysis, scenario planning, joint ventures etc. He has deposed, as an expert witness, at commercial litigations in the United States and in Parliamentary proceedings in India and Australia. He has authored over five hundred articles and papers in the domain of politics, international affairs, foreign policy, defence, the environment and business practices. He is also non-executive Director on the Corporate Board of the Sanmar Group; Shriram Transport Finance Company Limited; Indosolar Limited; PR Pundit Public Relations Limited and BMR Associates. He is a member of the Board of Trustees of the Centre for Civil Society, an independent free-market think tank and the Adit Jain Foundation. He has a bachelor’s degree in mechanical engineering from the Birla Institute of Technology and a master’s degree in business administration from the Henley Management College, UK. He is a Fellow of the Royal Geographical Society.

Shri Venkitaraman S. Iyer — Independent Director

Shri Venkitaraman S. Iyer is Post Graduate in Commerce and a Chartered Accountant. He has a decade of experience in Managerial Positions in the areas of Corporate Finance and Accounts, Internal Audits and Management Audits, Commercial and Legal functions in big Corporate Houses.

He Worked with Prebon Yamane Group of Companies in its Indian Operations during the 1993-2006. He was also involved in advisory capacity in number of Blue chip Companies. He has been associated with leading structural and design consultants for feasibility study of BOT and BOOT projects of NHAI regarding Tuticorin Port Road Connectivity Project, Chelari-Kuttipuram Highway widening project, Cochin Airport (CIAL) proposal and Pondicherry Government Proposed entertainment complex. Besides, he has vast experience of Venture capital, Strategic partnership, management of Private equity funds and Mergers and Acquisitions and Corporate Finance.

Presently, he is a Director in Ruttonsha International Rectifiers Limited, Proprietor in Iyer and Associates, Chartered Accountants and Advisor in Mukta Arts Limited.

Dr. Vijay Aggarwal — Independent Director

Dr. Vijay Aggarwal has been their Director w.e.f 29.3.2010. Dr. Vijay Aggarwalis Professor and Chairperson of Operations Management at the Management Development Institute, Gurgaon. He is an engineering graduate of 1970 in Mechanical and Industrial Engineering from the Indian Institute of Technology, Bombay. He has received his M.S. and Ph.D. in Operations Research and Computer Science in 1973 from the Case Western Reserve University, Cleveland (USA).

He has been a consultant to several organizations and has undertaken action research and developmental projects funded by NSERC, CIDA, USAID, UNDP, ESCAP and EU-Asia.

He has several research publications covering various facets of management and decision sciences in major national and international refereed journals. He has received a range of awards, honors and recognitions including key editorial board roles on some of the prestigious international journals.

Dr. Rajan Saxena — Independent Director

Dr. Rajan Saxena has been their Director w.e.f. 29.3.2010. Dr. Rajan Saxena is former Director of IIM, Indore, S.P. Jain Institute of Management and Research and Dean of Narsee Monjee Institute of Management Studies, Mumbai. He has over 35 years of professional experience in management education, research , consulting and institution building . He is an alumnus of Shri Ram College of Commerce, Delhi, from where he did his Bachelor and Master’s program in commerce. He did his Ph.D. work at Delhi School of Economics in marketing area and was awarded the degree by Delhi University. He has taught in top management Institutes in India like XLRI, SPJIM and R, IIM Calcutta, NMIMS and IIM Indore etc. He has also taught in University of Calgary , Canada and has been a British Council visitor at the University of Sterling, U.K. where he also taught in the entrepreneurship program. He is a Visiting Professor at Pace University, NY.

Dr. Saxena has been awarded several awards during the period from 1990 to 2002.

Dr. Saxena is/has been on the advisory and corporate board of several institutions and companies.

T.S. Narayanasami — Independent Director

Shri T.S. Naraynasami has been their Director w.e.f. 29.3.2010. Shri T.S. Naraynasami is Bachelor of Science. He has worked in various capacity in Union Bank of India upto December 2000. Thereafter he held the position of Executive Director PNB from December 2002 to April 2004. He was Chief Managing Director of Andhra Bank from April 2004 to May 2005, Chief Management Director of Indian Oversees Bank from June 2005 to May 2007 and Chief Managing Director of Bank of India from June 2007 to May 2009. He has held various important positions in the Banking and Financial Sector like GIC, Indian Institute of Banking and Finance, Governing Board of Institute of Banking, National Institute of Bank Management, Primary market advisory Committee of SEBI etc. Presently he is Director Asset Management Company, Axis Mutual Fund, Managing Director and CEO of United Stock Exchange of India.

N.K. Joshi —

N. K. Joshi is an ITS officer of 1983 batch. Born on 6th October, 1959, Shri Joshi did his B.E. Degree in Electronics and Communication Engineering with Distinction from Indian Institute of Science, Bangalore. Joined TATA STEEL as Graduate Engineer Trainee in July 1981. Joined DOT as ADET in 1985. On promotion, worked as DET in Jorbagh, Tis-Hazari and Shakti Nagar areas in-charge of maintenance of outdoor plants. Worked as DGM in-charge of outdoor plants in South-II area. Worked as DGM (OP) and TDM, Mandi in HP Circle.

Posted on deputation to TCIL as Project Director, Kuwait for developing new businesses for the company and successfully completing existing ones. On repatriation worked as Dy. Administrator in USOF in DOT H/Q. On promotion to SAG worked as Jt. Administrator in USOF. Worked as GM in planning, Technical, Field area in Corporate and Delhi units of subject.

Since Sept., 2008 working as Dy. Director General (Service Unit) in DOT H/Q responsibility to act as Nodal Officer for TCIL, ITI VSNL and HTL besides co-ordinating SCT cell. He has been nominated as Government Director as the Board of subject w.e.f. August, 2010.

FIXED ASSETS:

Intangible Assets:-

· Application Software

· 3G and BWA Licence Fees

Tangible Assets:-

· Freehold Land

· Leasehold Land

· Building

· Leased Premises

· Lines and Wires

· Cable

· Apparatus and Plant

· Vehicles

· Furniture and Fixtures

· Office Machinery

· Office Equipment

· Electrical Appliances

· Computer

· Assets Scrapped / Decommissioned

CONTINGENT LIABILITIES:

Particular	As on 31.03.2010 (Rs. In Millions)
(a) Income Tax Demands disputed and under appeal	12161.970
(b) Sales Tax, Service Tax, Excise duty, Municipal Tax Demands Disputed and under Appeal	9429.220
(c) Disputed Demand under Lease Act*	--
(d) i Interest to DDA on delayed payments/Pending Court Cases/ Tax cases	Amount Indeterminate
ii Stamp duty payable on land and buildings acquired by the Company	Amount Presently Unascertainable
(e) Claims against the Company not acknowledged as Debts	10372.830
(f) Bank guarantee and Letter of Credit	950.890
(g) Directory dispute	2858.340
(h) Interest demanded by DOT and disputed by company on account of delay in payment of Leave Salary and Pension Contribution	1738.100
(i) Pending court cases against land acquisition	Indeterminate

WEBSITE DETAILS:

History:

Historical Development
1911	Establishment of Delhi telephones system with manual exchange
1926	Opening if 1st automatic exchange (Lothian exchange)
1937	Opening of Connaught Place exchange.
1945	First Manual Trunk exchange opened.
1950	Opening of Cantt exchange
1953	Tiz Hazari Exchange (Lothian exchange ceased working) commissioned.
1955	Secretariat exchange commissioned
1958	Karol Bagh exchange (SXS) commissioned.
1961	Jor Bagh exchange (SXS) commissioned.
1961	Shahadara exchange (SXS) commissioned.
1962	Opening of First STC service to Agra.
1963	Delhi Gate (27) exchange commissioned.
1964	Delhi telephone crosses 50,000 lines.
1966	Opening of exchanges at Nangloi, Narela, Najafgarh, Bahadurgarh and Ballabgarh.
1967	Rajpath (38) exchange commissioned
1968	1st X-Bar exchange (KB58) commissioned. X-Bar exchange (JB62) commissioned
1969	Trunk automatic exchange (TAX) commissioned
1970	Okhla X-Bar exchange commissioned.
1972	Opening of Idgah-I (51) Strowger exchange.
1972	X-Bar (31) Janpath-I exchange commissioned. Delhi telephones crosses 1 lac lines.
1973	Opening of X-Bar (67) Chanakya Puri exchange.
1975	X-Bar Janpath-IV (34) exchange commissioned. X-Bar Shahdara East (20) exchange commissioned.
1976	Shakti Nagar (74) exchange commissioned. Idgah-II (52) X-Bar exchange inaugurated by Mr. Fakhuriddin Ali Ahmed, President of India, on 28.8.76 and presided over by Mr S.D. Sharma (Minister of Communications) Opening of Shahdara East (20) Extension-I, X-Bar exchange on 31.8.76. It was inaugurated by Mr H.K.L Bhagat (Minister of State for Works and Housing) and Mr S.D. Sharma (Minister of Communications). Opening of Hauz Khas (65) X-Bar exchange on 18.10.76. It was inaugurated by Mr S.D. Sharma (Minister of Communications) and presided over by Mr Radha Raman (Chief Executive Councillor, Delhi).
1977	Opening of STD Service to Indore and Ambala on 5.10.77 by Mr Brij Lal Verma (Minister of Communications).
1978	Opening of Rajouri Garden-I (59) X-Bar exchange in Feb 78 Opening of Hauz Khas -II (66) X-Bar exchange on 15.2.78, by Mr Brij Lal Verma (Minister of Communications). Opening of Janpath-V (35) X-Bar exchange. Opening of Nehru Place (68) Strowger exchange on 4.11.78 by Mr Brij Lal Verma (Minister of Communications) and presided over by Mr R.K. Gupta (Mayor of Delhi).
1986	Creation of Mahanagar Telephones Nigam Limited
1986	First digital exchange world technology brought to India
1987	Largle Scale introduction of push button telephone made dialling easier.
1988	Phone Plus services multiplied benefits to telephone users.
1992	Voice Mail Service Introduced
1996	ISDN services introduced
1997	Wireless in Local loop introduced
1999	Internet services introduced.
2000	Millennium Telecom Limited, a wholly owned subsidiary of subject is born
2001	Launched GSM Cellular Mobile service under the brand name Dolphin Launched WLL Mobile services under the brand name Garuda. The company listed at New York stock exchange(NYSE) United telecom Limited, MTNL Joint venture in Nepal, for providing WLL based services in Nepal became operational. CLI based Internet express services introduced.
2002	Launched pre-paid GSM Mobile services under the brand name Trump. Email on PSTN lines introduced under the brand name mtnlmail.
2003	Introduced CDMA 1x 2000 Technology under the brand name Garuda 1-x.Introduced pilot project of ADSL based Broadband services. Introduced Virtual Phone services. Mahanagar Telephone Mauritius Limited bagged second operator license in Mauritius.
2004	Expanded GSM and CDMA capacity by 800,000 lines each (total 1.6 million lines expanded) STD/ISD rates slashed by almost 60%. MTNL subsidiary MTML obtained license to provide fixed, mobile and ILD services in Mauritius. Launched Wi-Fi and digital certification services. State of the art training centre “CETTM” commissioned.
2005	Leading market in GSM customer additions. Launched broadband services under the brand name “TRI BAND”. Floated tender for 1 million 3G GSM lines.

JOINT VENTURE:

United Telecom Limited (UTL)

Subject has formed a Joint Venture company in Nepal by the name of United Telecom Limited (UTL) in collaboration with Telecom Consultants India Limited (TCIL), Videsh Sanchar Nigam Limited (VSNL) and NVPL (Nepal Ventures Private Limited, a Nepalese Company) The Company is operational since 10th October, 2001 for providing WLL based basic services in Nepal. In Nepal against the switching capacity of 50K, 21K telephone connections are working.

Mahanagar Telephone Mauritius Limited (MTML)

Subject has set up its 100% subsidiary .Mahanagar Telephone Mauritius Limited. (MTML) in Mauritius, for providing basic, mobile and international long distance services as 2^nd. operator in Mauritius. Necessary licenses have been obtained in January 2004. MTML has already started its ILD and CDMA based basic services in Mauritius. In Mauritius against the switching capacity of 50K, 8K telephone connections are working.   

Looking for new horizons

Incorporated on 17th Feb., 2000, Millennium Telecom Limited is a wholly owned subsidiary of subject that has been formed to do practically any type of Telecom Business with a focus on value added services. It intends to be a Universal Telecom solution provider to meet the needs of the customers, both Telecom and its Applications, on a one stop basis through Service Level Agreements using Multi Service, Flexible, customized access supported by a strong billing system. It intends to roll out a router-based packetised telecom network and create facilities like Application Development Centre, Internet Data Centre, STP facilities and payment gateway. Presently, it has a category ?A? ISP licence and is in the process of application development and rolling out the services.

The company also started its operation in Himachal Pradesh in association with HPSEDC from 25 th Feb, 2002.Web Enabled Tendering has also been started from 14.1.2002 for information on various tenders by logging on to nividasewa.com.

The company has signed MOUs for co-operation with

1.West Bengal Electronics Limited.

2.Karnataka State Electronics Limited.

The company is in the process of signing further MOUs with

1.Bihar State Electronics Corporation

2.Kerala State Electronics Corporation

MTNL-STPI IT Services Limited

MTNL-STPI IT Services Limited is a 50:50 Joint Venture between Software Technology Parks of India (STPI) and Subject. The JV formed in 2006 combines the STPI.s rich experience as an ISP and subject’s track record of being India.s leading telecom operating company to offer niche portal services to the Indian community. The JV was formed to realize one of the 10-point agenda of MoC and IT, which are of extreme importance to India for bringing about an all round economic development. The JV aims to provide exclusive data center services, messaging services, business application services to the identified sectors of economic activity and thereby also popularizing the .in domain in the networked community across the world.

Millenium Telecom Limited (MTL)

Subject has restructured Millenium Telecom Limited (MTL) as a Joint Venture company of subject and BSNL with 50% and 50% equity participation respectively. The company will now be entering into new business stream of international long distance operations and will be executing a project of submarine cable system, both east and west from India.

SERVICES:

PSTN
Plain Old Telephone Service through digitalised Public Switched Telephone Network with variety of Phone Plus Services such as call waiting, call forwarding, time alarm, abbreviated dialing, dynamic STD/ISD locking, answering machine, DID facility of EPABXs etc. Subscriber base of Basic services of subject was 3877608 as on 31.03.2006.

I-NET
Date Service through X.25 based Packet Switched Public Data Network called I-Net. The network supports CCITT protocols, X.3, X.25, X.28, X.29, X.32, X.75 and Frame Relay Service with vast range of facilities. Subscriber base of I-NET services of subject was 275 as on 31.03.2006.

ISP
In addition to services earlier being provided in Mumbai and Delhi, they have introduced CLI based internet services in 2002. They have also started ISP service from 25^th Feb,2002 in Himachal Pradesh in association with HPSEDC. Subscriber base of internet (dial-up) services of subject was 1188204 as on 31.03.2006.

ISDN
Integrated Services Digital Network (ISDN) to meet the requirements of customers for voice data and video on single line, both in Basic Rate Access (64kbps) and Primary Rate Access (2 Mbps). Subscriber base of ISDN services of subject was 23117 as on 31.03.2006.

IN
Intelligent Network Services (IN-Services) e.g., Free Phone, Premium Rate Service, Virtual Calling Card/ Accounts Calling Card, Tele Voting, Virtual Private Network, Universal Access Network. Subscriber base of IN services of subject was 1059 as on 31.03.2006.

WLL (GARUDA)

Wireless in Local Loop (WLL) : Services offered are both in fixed mode as well as portable mode (mobile).Recently the network has been upgraded to CDMA 1X 2000 technology providing higher bandwidth(144 kbps) data services alongwith voice. The upgraded service is launched under 'Garuda 1x' banner. Subscriber base of Garuda mobile services of subject was 105665 as on 31.03.2006.

CELLULAR MOBILE SERVICE (DOLPHIN)

GSM based cellular mobile service with advanced features and value added services like Auto-roaming, Pre-Paid, Voice Mail service (VMS), Short Message Service (SMS), Multi Party Conference, Closed User Group (CUG) etc. Subscriber base of GSM based cellular mobile services of subject was 1941155 as on 31.03.2006.

LEASED LINE

For voice and data with local, national and international connectivity on point-to-point basis, subject pioneered and became market leader in introducing MLLN Network providing highest QoS to its esteemed subscribers. No of leased line ccts. of subject was 49685 as on 31.03.2006.

BROADBAND
subject has launched broadband services under Brand name TriBand. The service is provided on the existing copper infrastructure, initially Broadband Internet Service, other services such as VPN, multicasting, video conferencing, video-on-demand and broadcast application shall also be added in future.

Broadband service is provided through the deployment of ADSL 2+ technology, a type of digital subscriber line (DSL).

All Payments / Billing for the service will be included in the regular MTNL Telephone Bill. Subscriber base of broadband services of subject was 211935 as on 31.03.2006.

Wi-Fi SERVICES

MTNL.s .Wi-Fine. provides high-speed Wi-Fi wireless Internet access through hotspots located at prominent public locations. The service meets the need of Internet browsing on move.

VIRTUAL PHONE

Virtual Phone Card, a unique and innovative service provides the facility to receive messages and faxes, and also make calls from any phone, without physically owning a phone or fax machine.

PHONE MAIL SERVICE

Another innovation from MTNL enables subscribers to send and receive E-mail using normal telephone lines and instruments, without a PC.

In the new millennium, MTNL makes sure that it gets connected to communicate with a rapidly shrinking world and that every resident of Delhi and Mumbai is provided access to the latest in telecom services.

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.44.67
UK Pound	1	Rs.69.45
Euro	1	Rs.59.37

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--MARGINS	-5~5	-
DEMERIT POINTS
--BANK CHARGES	YES/NO	NO
--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	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		68

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	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
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.