MIRA INFORM REPORT

Report Date :

29.03.2011

IDENTIFICATION DETAILS

Name :	MICROSOFT INDIA (R AND D) PRIVATE LIMITED
Registered Office :	F 40 NDSE Part 1, New Delhi 110049
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	15.05.1998
Com. Reg. No.:	55 - 093824
CIN No.: [Company Identification No.]	U72200DL1998PTC093824
Legal Form :	Private Limited Liability Company
Line of Business :	Information Technology Services – Software Development and Product Support Services

RATING & COMMENTS

MIRA’s Rating :

A (64)

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 29000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a subsidiary of Microsoft Ireland Research Limited, Ireland. It is a well established and reputed company having fine track. Available information indicates high financial responsibility of the company. Trade relations are fair. Payments are reported to be regular and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

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

INFORMATION DECLINED BY

Management Non Co Operative (Name Not Disclosed)

LOCATIONS

Registered Office :	F 40 NDSE Part 1, New Delhi 110049, India
E-Mail :	raman.sharma@azbpartners.com
Website :	www.microsoft.com
Global Technical Support Center :	Signature Building, Embassy Golf Links Business Park, Off Intermediate Ring Road, Domlur, Bangalore 560071, Karnataka, India
Tel. No.:	91-80-66587000

DIRECTORS

AS ON 30.09.2010

Name :	Mr. Raman Sharma
Designation :	Director
Date of Birth/Age :	03.11.1959
Date of Appointment :	14.03.2001
Name :	Mr. Hardeep Sachdeva
Designation :	Director
Date of Appointment :	21.12.2004
Name :	Mr. Srinivas Koppolu
Designation :	Director
Date of Appointment :	20.10.2000
Name :	Mr. Keith Ranger Dolliver
Designation :	Director
Date of Appointment :	21.12.2004
Name :	Mr. John Alfred Seethoff
Designation :	Director
Date of Appointment :	14.03.2001
Name :	Mr. Benjamin Owen Orndorff
Designation :	Director
Date of Birth/Age :	07.09.1971
Date of Appointment :	17.08.2010
Name :	Mr. Amit Chatterjee
Designation :	Director
Date of Birth/Age :	23.08.1962
Date of Appointment :	14.09.2010

KEY EXECUTIVES

Name :	Mr. Mohan Singh
Designation :	Secretary
Date of Appointment :	01.01.2008

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2010

Names of Shareholders	No. of Shares
Microsoft Ireland Research, Ireland	4236001
Round Island One Limited, Ireland	1
Total	4236002

AS ON 30.09.2010

Equity Share Breakup		Percentage of Holding
Category
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]		100.00
	Total	100.00

BUSINESS DETAILS

Line of Business :

Information Technology Services – Software Development and Product Support Services

GENERAL INFORMATION

No. of Employees :

Not Divulged by the Management

Bankers :

Scheduled Bank

Facilities :

Rs. In Millions

UNSECURED LOAN	31.03.2010	31.03.2009
External Commercial Borrowing from Microsoft Ireland Research Limited (Formerly known as M/S Microsoft Ireland Capital Limited), Ireland, the Holding Company	2045.745	2299.990
ADD: Interest Accrued and Due on the above	41.917	59.631
TOTAL	2087.662	2359.621
Amount repayable within one year	1907.102	1344.621

Banking Relations :	--
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountant
Address :	ASV N Ramana Tower 52 Venkatnarayana Road, T Nagar, Chennai 600017, Tamil Nadu, India
Tel. No.:	91-44-66885000
Fax No.:	91-44-66885050
Ultimate Holding Company:	Microsoft Corporation, USA
Holding Company :	Microsoft Ireland Research, Ireland (Formerly known as M/S Microsoft Ireland Capital Limited)
Subsidiaries :	Microsoft Global Resources, GmbH Microsoft Global Services Centre (India) Private Limited Microsoft Operations Pte. Limited, Singapore Round Island One Limited, Ireland

CAPITAL STRUCTURE

AS ON 30.09.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Shares	Rs. 10 each	Rs.100.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4236002	Equity Shares	Rs. 10 each	Rs.42.360 millions

Note:

Out of the above 4236001 equity shares of Rs. 10 each are held by Microsoft Ireland Research Limited (Formerly known as M/S Microsoft Ireland Capital Limited), Ireland, the Holding Company and 1 equity shares is held by M/s Round Island One Limited, Ireland. The Ultimate Holding Company is M/s. Microsoft Corporation, USA

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		42.360	42.360	42.360
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		7275.380	8098.229	6944.135
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		7317.740	8140.589	6986.495
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		2087.662	2359.621	2082.019
TOTAL BORROWING		2087.662	2359.621	2082.019
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		9405.402	10500.210	9068.514
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		4995.399	5960.273	6780.504
Capital work-in-progress		21.044	6.482	214.089
INVESTMENT		0.000	0.000	0.000
DEFERREX TAX ASSETS		851.347	764.113	739.349
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	0.000	0.000	0.000
	Sundry Debtors	1262.529	246.093	1407.301
	Cash & Bank Balances	6000.535	4760.106	2918.716
	Other Current Assets	880.866	1164.444	47.388
	Loans & Advances	901.541	959.746	429.592
Total Current Assets		9045.471	7130.389	4802.997
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	2027.232	2161.404	3079.648
	Other Current Liabilities	795.993	847.113	160.272
	Provisions	2684.634	352.530	228.505
Total Current Liabilities		5507.859	3361.047	3468.425
Net Current Assets		3537.612	3769.342	1334.572
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		9405.402	10500.210	9068.514

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Sales	12449.792	9873.054	14053.000
		Other Income
		TOTAL (A)	12449.792	9873.054	14053.000
Less	EXPENSES
		Selling and Distribution Expenses
		Office Expenses	10657.671	8519.555	11988.300
		Administrative Expenses
		Advertising Expenses
		TOTAL (B)	10657.671	8519.555	11988.300
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		1792.121	1353.499	2064.700
Less	FINANCIAL EXPENSES (D)		NA	NA	NA
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		1792.121	1353.499	2064.700
Less/ Add	DEPRECIATION/ AMORTISATION (F)		NA	NA	NA
	PROFIT BEFORE TAX (E-F) (G)		1792.121	1353.499	2064.700
Less	TAX (H)		462.978	201.065	(46.200)
	PROFIT AFTER TAX (G-H) (I)		1329.143	1152.434	2110.900
	EARNINGS IN FOREIGN CURRENCY
		Software Development Service	9443.934	7499.495	11330.643
		Product Support Service	2764.943	2063.818	2601.432
	TOTAL EARNINGS		12208.877	9563.313	13932.075
	IMPORTS
		Capital Goods	295.514	309.679	933.300
	Earnings Per Share (Rs.)		313.77	272.06	498.26

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	10.67	11.67	15.02
Net Profit Margin (PBT/Sales)	(%)	14.39	13.70	14.69
Return on Total Assets (PBT/Total Assets}	(%)	12.76	10.34	17.82
Return on Investment (ROI) (PBT/Networth)		0.24	0.16	0.29
Debt Equity Ratio (Total Liability/Networth)		1.03	0.70	0.79
Current Ratio (Current Asset/Current Liability)		1.64	2.12	1.38

LOCAL AGENCY FURTHER INFORMATION

SUNDRY CREDITORS DETAILS

Particulars	31.03.2010	31.03.2009	31.03.2008
Due to Micro Enterprises and Small Enterprises	1.046	0.000	0.000
Due to Others	2026.186	2161.404	3079.648
Sundry Creditors	2027.232	2161.404	3079.648

BACKGROUND

The Company was incorporated in India on is May 1998 and is engaged in the business of software development and product support services. The Company operates out of two units, one situated at Hyderabad and the other at Bangalore. The Company is a subsidiary of M/s. Microsoft Ireland Research Limited (formerly M/s. Microsoft Ireland Capital Limited), Ireland. The Ultimate Holding Company is Microsoft Corporation, USA. The Company is a closely held Company with 4,236,001 Equity Shares being held by M/s. Microsoft Ireland Research Limited, the Holding Company, and the balance 1 Share being held by M/s. Round Island One Ltd., Ireland.

FIXED ASSETS:

• Land
• Buildings
• Leasehold Improvements
• Computer Equipments
• Office Equipments
• Furniture and Fixtures
• Vehicles

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.44.78
UK Pound	1	Rs.71.64
Euro	1	Rs.62.96

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		64

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.