MIRA INFORM REPORT

Report Date :

12.04.2012

IDENTIFICATION DETAILS

Name :	HUBLI ELECTRICITY SUPPLY COMPANY LIMITED
Registered Office :	Navanagar, P B Roadm Hubli – 580025, Karnataka
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	30.04.2002
Com. Reg. No.:	08-30437
Capital Investment / Paid-up Capital :	Rs. 2333.361 Millions
CIN No.: [Company Identification No.]	U04010KA2002SGC030437
TAN No.: [Tax Deduction & Collection Account No.]	BLRH02784F/ BLRH01596A/ BLRH02572D
Legal Form :	A Closely Held Public Limited Liability Company.
Line of Business :	Distribution and Supply of Electricity more Efficiently and Economically.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (47)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is a government of India company engaged in power distribution in various districts of Karnataka. It is an established company having satisfactory track. There appears accumulated losses recorded by the company. However, since it is government company. The creditors and the lenders can be confident of their exposure in the company. Trade relations are fair. Business is active. Payments are reported to be usually correct 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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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 :	Navanagar, P B Roadm Hubli – 580025, Karnataka, India
Tel. No.:	91-836-2322711
Fax No.:	91-836-2324307
E-Mail :	rsridhara48@rediffmail.com
Website :	http://www.hescom.co.in
Head Office :	2, Samadhan, 1^st Floor, Agarkar Chowk, Opposite Railway Station, Andheri (East), Mumbai – 400069, Maharashtra, India
Telefax No.:	91-26836946/ 6948/ 55061030/ 1031/ 1032
Email :	suvishwa@mtnl.net.in yardiprabhu@vsnl.net
Branch Office :	Sheshagiri Nivas, Maratha Galli, Hubli – 580020, Karnataka, India
Tel No.:	91-836-2368670
Email :	Trimalle-s@eth.net

DIRECTORS

AS ON 28.09.2011

Name :	Mr. Shamim Banu Mehboobjan
Designation :	Director
Address :	81, 5^th Cross, 16^th Main, Ias Officers Colony, MCHS, II Stage, Bangalore-560076, Karnataka, India
Date of Birth/Age :	23.01.1952
Date of Appointment :	29.07.2010
Date of Cession :	31.01.2012
DIN No.:	01900021
Name :	Mr. Pankaj Kumar Pandey
Designation :	Managing Director
Address :	MDS Banglow # NBQ 3, Corporate Office Premises, Hescom, PB Road, Navanagar, Hubli, Dharwad-580025, Karnataka, India
Date of Birth/Age :	30.07.1976
Date of Appointment :	11.11.2010
DIN No.:	03376149

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U85110KA1940PLC000264	THE MYSORE MATCH COMPANY LIMITED	Nominee director	21-10-10	21-10-10	Active	NO
2	U31401KA2002SGC030437	HUBLI ELECTRICITY SUPPLY COMPANY LIMITED	Managing director	11-11-10	11-11-10	Active	NO
3	U31101KA1975PLC002954	KARNATAKA VIDYUTH KARKHANE LIMITED	Director	02-12-10	02-12-10	Active	NO
4	U40101KA2007SGC043640	POWER COMPANY OF KARNATAKA LIMITED	Director	09-12-10	09-12-10	Active	NO

Name :	Mr. Naveen Kumar Mangalore
Designation :	Director
Address :	#551, Dollars Colony, 13^th Cross Bangalore-560094, Karnataka, India
Date of Birth/Age :	05.01.1956
Date of Appointment :	15.09.2009
DIN No.:	02801160

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U40101KA2007SGC043640	POWER COMPANY OF KARNATAKA LIMITED	Managing director	25-06-09	25-06-09	Active	NO
2	U31401KA2002SGC030437	HUBLI ELECTRICITY SUPPLY COMPANY LIMITED	Director	15-09-09	15-09-09	Active	NO
3	U04010KA2002SGC030436	GULBARGA ELECTRICITY SUPPLY COMPANY LIMITED	Director	15-09-09	15-09-09	Active	NO
4	U75112KA1996PLC020020	KARNATAKA RENEWABLE ENERGY DEVELOPMENT LIMITED	Nominee director	28-04-10	28-04-10	Active	NO
5	U40102DL2007GOI157615	Coastal Tamil Nadu Power Limited	Nominee director	30-08-10	30-08-10	Active	NO
6	U04010KA2002SGC030438	BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED	Director	17-06-11	17-06-11	Active	NO
7	U40109KA2004SGC035177	CHAMUNDESHWARI ELECTRICITY SUPPLY CORPORATION LIMITED	Director	21-10-11	21-10-11	Active	NO

Name :	Mr. Padam Kumar Garg
Designation :	Director
Address :	B-4, senior Police Officers Quarters, 24-25, Housr Road, Shoolay Circle, Bangalore-560025, Karnataka, India
Date of Birth/Age :	26.04.1961
Date of Appointment :	23.10.2010
DIN No.:	01959681

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	L15428KA1933SGC000142	MYSORE SUGAR COMPANY LIMITED	Managing director	25-05-05	25-05-05	11-02-08	Active	YES
2	U04010KA2002SGC030436	GULBARGA ELECTRICITY SUPPLY COMPANY LIMITED	Director	23-10-10	23-10-10	-	Active	NO
3	U40109KA2002SGC030425	MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED	Director	23-10-10	23-10-10	29-12-11	Active	NO
4	U04010KA2002SGC030438	BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED	Director	23-10-10	23-10-10	-	Active	NO
5	U31401KA2002SGC030437	HUBLI ELECTRICITY SUPPLY COMPANY LIMITED	Director	23-10-10	23-10-10	-	Active	NO
6	U40109KA2004SGC035177	CHAMUNDESHWARI ELECTRICITY SUPPLY CORPORATION LIMITED	Director	23-10-10	23-10-10	-	Active	NO
7	L99999KA1936SGC000173	THE MYSORE PAPER MILLS LIMITED	Managing director	02-02-11	02-02-11	-	Active	NO

Name :	Mr. Ramaprasad
Designation :	Director
Address :	# 297, 14^th Cross, 5^th Main RMV 2^nd Stage, Dollors Colony, Bangalore-580094, Karnataka, India
Date of Birth/Age :	07.06.1955
Date of Appointment :	02.08.2010
Date of Cession :	21.10.2011
DIN No.:	02344335
Name :	Mr. Randeep Devendran
Designation :	Director
Address :	3367-O, 13^th Main road, Hal 2^nd Stage, Bangalore (East)-560008, Karnataka, India
Date of Birth/Age :	03.07.1979
Date of Appointment :	17.06.2011
DIN No.:	03019734

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U17122KA1976PLC003650	KARNATAKA SILK MARKETING BOARD LIMITED	Nominee director	29-01-10	29-01-10	14-12-11	Active	NO
2	U31401KA2002SGC030437	HUBLI ELECTRICITY SUPPLY COMPANY LIMITED	Director	17-06-11	17-06-11	-	Active	NO
3	U75112KA1960SGC001384	KARNATAKA STATE SMALL INDUSTRIES DEVELOPMENT CORPORATION LIMITED	Director	01-08-11	01-08-11	-	Active	NO
4	U85110KA1980SGC003871	KARNATAKA SOAPS AND DETERGENTS LIMITED	Director	23-08-11	23-08-11	-	Active	NO
5	U01224KA1980PLC003802	KARNATAKA SILK INDUSTRIES CORPORATION LIMITED	Director	25-08-11	25-08-11	-	Active	NO
6	U60100KA2000PLC028171	RAIL INFRASTRUCTURE DEVELOPMENT COMPANY (KARNATAKA) LIMITED	Nominee director	25-08-11	25-08-11	-	Active	NO
7	U75112KA1976SGC003055	KARNATAKA STATE ELECTRONIC DEVELOPMENT CORPORATION LIMITED	Nominee director	22-09-11	22-09-11	-	Active	NO

Name :	Mr. Haladodderi Raghavendra Rao Nagendra
Designation :	Director
Address :	417, Hrbr Layout, 2^nd Block, 5^th B Main Road, Bangalore-560043, Karnataka, India
Date of Birth/Age :	30.08.1955
Date of Appointment :	02.05.2011
Date of Cessation :	29.12.2011
DIN No.:	03537500
Name :	Mr. Pinne Gowda Bore Gowda
Designation :	Director
Address :	318, Dollars Colony, Hig Rmv, 2^nd Stage, Bangalore-560094, Karnataka, India
Date of Birth/Age :	16.07.1952
Date of Appointment :	17.06.2011
Date of Cessation :	21.10.2011
DIN No.:	02266070
Name :	Mr. Chikkananjappa Nanjaiah
Designation :	Director
Address :	No.49, 03-Cross Vallbha Nagar, Konankunte Crs Near Manasa, Bangalore-560062, Karnataka, India
Date of Birth/Age :	01.06.1958
Date of Appointment :	20.06.2009
DIN No.:	02451522

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Date of cessation	Company Status	Defaulting status
1	U40109KA2004SGC035177	CHAMUNDESHWARI ELECTRICITY SUPPLY CORPORATION LIMITED	Director	08-09-08	08-09-08	05-11-08	Active	NO
2	U40109KA2002SGC030425	MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED	Director	05-11-08	05-11-08	20-06-09	Active	NO
3	U31401KA2002SGC030437	HUBLI ELECTRICITY SUPPLY COMPANY LIMITED	Director	20-06-09	20-06-09	-	Active	NO
4	U85110KA1945PLC000367	THE MYSORE ELECTRICAL INDUSTRIES LIMITED	Director	27-06-09	27-06-09	-	Active	NO

Name :	Mr. Mohamed Ahmed Hussain
Designation :	Director
Address :	#42/3, Mosque Road, Basavanagudi, Bangalore-560004, Karnataka, India
Date of Birth/Age :	30.05.1953
Date of Appointment :	07.03.2009
DIN No.:	02729374
Name :	Mr. Lepakshi Ravi
Designation :	Director
Address :	68, LE Prakshi, saraswathi Nilaya, 1^st Cross, 4^th Main Domlur, 2^nd Stage, Bangalore-560071, Karnataka, India
Date of Birth/Age :	20.02.1955
Date of Appointment :	24.09.2008
Date of Cessation :	21.10.2011
DIN No.:	02376999
Name :	Mr. Munivenkatappa Nagaraja
Designation :	Director
Address :	29/1, 2^nd Cross Kanakanapalya 4^th Block, Jayanagar, Bangalore-580094, Karnataka, India
Date of Birth/Age :	08.10.1956
Date of Appointment :	06.09.2011
DIN No.:	02893520

Other Directorship:

S.No.	CIN	Name of the Company	Current designation of the director	Date of appointment at current designation	Original date of appointment	Company Status	Defaulting status
1	U04010KA2002SGC030436	GULBARGA ELECTRICITY SUPPLY COMPANY LIMITED	Director	17-12-08	17-12-08	Active	NO
2	U04010KA2002SGC030438	BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED	Director	17-12-08	17-12-08	Active	NO
3	U40109KA1999SGC025521	KARNATAKA POWER TRANSMISSION CORPORATION LIMITED	Director	17-12-08	17-12-08	Active	NO
4	U40109KA2002SGC030425	MANGALORE ELECTRICITY SUPPLY COMPANY LIMITED	Director	17-12-08	17-12-08	Active	NO
5	U40109KA2004SGC035177	CHAMUNDESHWARI ELECTRICITY SUPPLY CORPORATION LIMITED	Director	08-10-09	08-10-09	Active	NO
6	U31401KA2002SGC030437	HUBLI ELECTRICITY SUPPLY COMPANY LIMITED	Director	06-09-11	06-09-11	Active	NO

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 28.09.2011

Names of Shareholders	No. of Shares
Shamim Banu Mehboobjan	233336094
Munivenkatappa Nagaraja	1
Pankaj Kumar Pandey	1
Mohamed Ahmed Hussain	1
Chikkananjappa Nanjaiah	1
Haldodderi Raghavendra Rao Nagendra	1
Lepakshi Ravi	1
Total	233336100

AS ON 14.03.2012

Names of Allottees	No. of Shares
Hon’ble Governor, State of Karnataka	474191700
Total	474191700

AS ON 28.09.2011

Equity Shares Break Up	Percentage
Government [Central and State]	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :

Distribution and Supply of Electricity more Efficiently and Economically.

Products :

Products Description	Item Code No.
Audio Magnetic Tape	8253.11
Unrecorded Cassettes Disc	8523.90

GENERAL INFORMATION

Suppliers :

· Vishwanath Sugurs Limited

· Godavari Sugurs Limited

· Valley Developers

· Logistics Limited

· GEM Sugurs Limited

· MRP Wind Farms

· Jindal Steels

· Shilpa Medicate Limited

· Pragathi Aroma Oil Distillers Private Limited

· Indian Designs

· B. D. Patil and Company

· ILC Industries Limited

No. of Employees :

Not Available

Bankers :

· State Bank of Mysore, Deshpande Nagar, Hubli Branch, Hubli-580023, Karnataka, India

· Canara Bank, Traffic Island, Court Circle, Hubli-585029, Karnataka, India

· State bank of India

· Syndicate Bank

· Vijaya Bank

· Bank of India

· Corporation Bank

· Axis Bank

· ING Vysya Bank Limited

Facilities :

Secured Loan	Rs. In Millions 31.03.2011	Rs. In Millions 31.03.2010
Loans From Financial Institutions and Banks :
Loan from Syndicate Bank	216.100	316.300
Loan drawn from State Bank of India, Hubli by HFSCOM	2992.600	3547.000
Loan from Canara Bank, Hubli by HESCOM	3254.300	3756.100
Loan from Corporation Bank	819.390	974.998
Loan from Power Finance Corporation Limited R-APDRA Scheme	157.847	157.846
Loan drawn from REC in respect of ongoing SPA Scheme works by KPTCL for HESCOM	4609.031	4745.851
Borrowings for Working Capital:
Cash Credit from Banks (SBI Hubli)	1216.172	1215.215
Total	13265.440	14713.310
Note: The company has offered Securities of its fixed assets and Sundry debtors against the above loans.
Unsecured Loan	Rs. In Millions 31.03.2011	Rs. In Millions 31.03.2010
Loans From Financial Institutions:
Loans Released from GoK through KPTCL towars PMGY works	46.231	49.621
APDRP – GOK Loan Payable to KPTCL	652.682	707.072
APDRP – REC Loan Payable to KPTCL	1294.963	1544.874
Loan from Power Finance Corporation Limited KPTCL	79.655	113.007
Loan from GOK towards Energisation of IP sets under Ganga Kalyana Scheme	26.250	31.500
Loand from GOK towards Central Additional Assistance to Power Sector Automation	9.135	13.050
Total	2108.916	2459.124
Notes: The above loans are drawn by KPTCL and transferred by adjustments and are repayable through KPTCL only and the details of the loan wise securities offered are not provided by KPTCL.

Banking Relations :	---
Auditors :
Name :	Vijay Panchappa and Company Chartered Accountant
Address :	2^nd Floor, Maruti Complex, Line Bazar, Dharwad-580010, Karnataka, India
Pan No.:	AAGFV4636B

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
250000000	Equity Shares	Rs.10/- each	Rs. 2500.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
233336100	Equity Shares	Rs.10/- each	Rs. 2333.361 Millions

AS ON 28.09.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
1000000000	Equity Shares	Rs.10/- each	Rs. 10000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
707527800	Equity Shares	Rs.10/- each	Rs. 7075.278 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010	31.03.2009
SHAREHOLDERS FUNDS
1] Share Capital		2333.361	2333.361	2222.403
2] Share Application Money		3935.216	3239.062	0.000
3] Reserves & Surplus		0.000	0.000	0.000
4] (Accumulated Losses)		(7237.857)	(6590.810)	(4854.418)
NETWORTH		(969.280)	(1018.387)	(2632.015)
LOAN FUNDS
1] Secured Loans		13265.440	14713.310	11074.156
2] Unsecured Loans		2108.916	2459.124	5003.892
TOTAL BORROWING		15374.356	17172.434	16078.048
DEFERRED TAX LIABILITIES		0.000	0.000	56.625
SERVICE LINE & SECURITY DEPOSITS		3756.261	3476.667	2977.236
TOTAL		18161.337	19630.714	16479.894
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		13727.558	13537.757	11985.373
Capital work-in-progress		258.479	333.289	476.983
INVESTMENT		25.100	25.100	0.100
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	348.568	344.153	372.989
	Sundry Debtors	15655.640	13646.341	12062.107
	Cash & Bank Balances	333.690	323.955	843.049
	Other Current Assets	9915.858	9000.632	5600.255
	Loans & Advances	762.477	637.311	648.459
Total Current Assets		27016.233	23952.392	19526.859
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	978.769	664.794	456.140
	Other Current Liabilities	21887.435	17554.549	15054.920
	Provisions	0.000	0.000	0.000
Total Current Liabilities		22866.204	18219.343	15511.060
Net Current Assets		4150.029	5733.049	4015.799
MISCELLANEOUS EXPENSES		0.171	1.519	1.639
TOTAL		18161.337	19630.714	16479.894

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Revenue from Sale of Power	31021.648	22775.874	18689.496
		Other Income	178.751	130.977	126.453
		TOTAL (A)	31200.399	22906.851	18815.949
Less	EXPENSES
		Purchase of Power	24783.491	17905.132	19259.425
		Repairs and Maintenance	220.854	233.858	217.617
		Employee Costs	3060.117	2238.442	2088.670
		Administrative Expenses	453.996	461.695	411.620
		Other Debits	80.961	93.800	147.611
		Prior Period Credits / (Debts)	(542.195)	185.761	(157.287)
		TOTAL (B)	28057.224	21118.688	21967.656
Less	PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		3143.175	1788.163	(3151.707)
Less	FINANCIAL EXPENSES (D)		2895.363	2701.822	1937.942
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		247.812	(913.659)	(5089.649)
Less/ Add	DEPRECIATION/ AMORTISATION (F)		894.858	822.733	515.412
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)		(647.046)	(1736.392)	(5605.061)
Less	TAX (H)		0.000	0.000	(2.578)
	PROFIT / (LOSS) AFTER TAX (G-H) (I)		(647.046)	(1736.392)	(5602.483)
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		(6590.810)	(4854.418)	748.065
	BALANCE CARRIED TO THE B/S		(7237.856)	(6590.810)	(4854.418)
	Earnings (Loss) Per Share (Rs.)		(2.77)	(7.00)	--

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	(2.07)	(7.58)	(29.76)
Net Profit Margin (PBT/Sales)	(%)	(2.09)	(7.62)	(29.99)
Return on Total Assets (PBT/Total Assets}	(%)	(1.59)	(4.63)	(17.77)
Return on Investment (ROI) (PBT/Networth)		0.67	1.71	2.13
Debt Equity Ratio (Total Liability/Networth)		(39.45)	(34.75)	(12.02)
Current Ratio (Current Asset/Current Liability)		1.18	1.31	1.26

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report (Yes / No)
1. Year of Establishment	Yes
2. Locality of the firm	Yes
3. Constructions of the firm	Yes
4. Premises details	Yes
5. Type of Business	Yes
6. Line of Business	Yes
7. Promoter’s background	Yes
8. No. of Employees	No
9. Name of person contacted	Yes
10. Designation of contact person	Yes
11. Turnover of firm for last three years	Yes
12. Profitability for last three years	Yes
13. Reasons for variation <> 20%	------
14. Estimation for coming financial year	No
15. Capital in the business	Yes
16. Details of sister concerns	No
17. Major suppliers	Yes
18. Major customers	No
19. Payments terms	No
20. Export / Import details	No
21. Market information	------
22. Litigations that the firm / promoter involved	------
23. Banking Details	Yes
24. Banking facility details	Yes
25. Conduct of the banking account	------
26. Buyer visit details	------
27. Financials, if provided	Yes
28. Incorporation details, if applicable	Yes
29. Last accounts filed at ROC	Yes
30. Major Shareholders, if available	Yes

FINANCIAL HIGHLIGHTS

During the year the revenue from operations has increased by 36% from Rs.22775.900 Millions to Rs.31021.600 Millions. The Company has displayed a good performance by reducing its losses by 63%. This has been possible because of receipt of additional subsidy of Rs.2029.500 Millions from GoK pertaining to the previous years.

The Company has purchased 8677.21 M.Us (at Generating Point) of power during the year.

The Power purchase cost has increased by 37% as compared to the previous year. During the year the Company has purchased High Cost Energy of 1400.10 M.U. at a cost of Rs.6989.200 Millions as per the GOK's decision. During the year, the Company has paid Rs.10409.600 Millions by cash and Rs.11071.300 Millions by way of subsidy adjustment towards power purchase payments to KPCLAPPs. The outstanding power purchase liability of the Company as on 31.03.2011 is Rs.15862.200 Millions.

FORM 8

Corporate identity number of the company	U31401KA2002SGC030437
Name of the company	HUBLI ELECTRICITY SUPPLY COMPANY LIMITED
Address of the registered office or of the principal place of business in India of the company	Navanagar, P B Roadm Hubli – 580025, Karnataka, India
This form is for	Creation of charge
Type of charge	Book debts Movable property (not being pledge)
Particular of charge holder	State Bank of Mysore, Deshpande Nagar, Hubli Branch, Hubli-580023, Karnataka, India
Nature of instrument creating charge	Letter of Credit and Hypothecation Agreement of Book Debts
Date of instrument Creating the charge	29.02.2012
Amount secured by the charge	Rs. 500.000 Millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest Not applicable. Terms of repayment On Demand/Repayment/Renewable within 12 months. Margin 25% on Receivables Extent and operation of the charge First charge
Short particulars of the property charged (Including location of the property)	The whole of the moveable properties of the Borrower's indicated in Letter of Credit and Hypothecation Agreement of SL No. 8

FIXED ASSETS:

• Plant and Machinery
• Building
• Civil Works
• Lines, Cable Net Work
• Vehicles
• Furniture and Fixtures
• Office Equipment

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. 51.54
UK Pound	1	Rs. 81.94
Euro	1	Rs. 67.56

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--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	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.