MIRA INFORM REPORT

Report Date :

25.04.2012

IDENTIFICATION DETAILS

Name :	ASSET RECONSTRUCTION COMPANY (INDIA) LIMITED
Registered Office :	The Ruby, 10^th Floor, 29 Senapati Bapat Marg, Dadar (West), Mumbai – 400028, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	11.02.2002
Com. Reg. No.:	11-134884
Capital Investment / Paid-up Capital :	Rs.3248.971 Millions
CIN No.: [Company Identification No.]	U65999MH2002PLC134884
TAN No.: [Tax Deduction & Collection Account No.]	MUMA21246B
PAN No.: [Permanent Account No.]	AAECA3878M
Legal Form :	A Closely Held Public Limited Liability Company
Line of Business :	Providing Assets Reconstruction Services.
No. of Employees :	Not Divulged

RATING & COMMENTS

MIRA’s Rating :

B (28)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 57200000
Status :	Moderate
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track. There appears some dip in income and profitability of the company. However, trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. The company can be considered for business dealings with some cautions.

NOTES :

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

INFORMATION DECLINED BY

Name :	Mr. Arindan
Designation :	UP Finance
Contact No.:	91-22-66581300
Date :	24.04.2012

LOCATIONS

Registered Office :	The Ruby, 10^th Floor, 29 Senapati Bapat Marg, Dadar (West), Mumbai – 400028, Maharashtra
Tel. No.:	91-22-66581300
Fax No.:	91-22-66581313
E-Mail :	cs@arcil.co.in
Website :	www.arcil.co.in
Head Office :	Times Tower, 9^th Floor, Kamala Mills Compound, S B Marg, Lower Parel (West), Mumbai – 400013, Maharashtra, India

DIRECTORS

As on 30.09.2011

Name :	Mr. Abhijit Datta
Designation :	Chairman
Address :	South City Apartments, Tower 4, Apartment No. 27 A 375, Prince Anwar Shah Road, Kolkata – 700068, West Bengal, India
Date of Birth/Age :	01.06.1949
Date of Appointment :	09.06.2009
DIN No.:	00790029
Name :	Mrs. Kasturi Mrutyun Jayarao
Designation :	Director
Address :	Flat No. B-15, Peregrine Apartments, Behind Kohinoor Hotel, 400 Veer Savarkar Marg, Mumbai – 400025, Maharashtra, India
Date of Birth/Age :	20.03.1956
Date of Appointment :	12.08.2009
DIN No.:	01077289
Name :	Mr. Ravindranath Bannanje
Designation :	Director
Address :	Jolly Maker Apt. No.2, Flat No. 21, Cuffe Parade, Mumbai – 400005, Maharashtra, India
Date of Birth/Age :	30.04.1955
Date of Appointment :	03.07.2008
DIN No.:	02156076
Name :	Mr. Vikram Mukund Limaye
Designation :	Director
Address :	18, Shreeniwas, 5th Flr, D. V. Deshpande Marg, Dadar (West), Mumbai – 400028, Maharashtra, India
Date of Birth/Age :	22.09.1966
Date of Appointment :	03.04.2007
DIN No.:	00488534
Name :	Mr. Kunnasagaran Chinniah
Designation :	Director
Address :	12, Countryside Grove, Singapore - 789967
Date of Birth/Age :	10.05.1957
Date of Appointment :	18.03.2009
DIN No.:	01590108
Name :	Mr. Sanjaykumar Nandkishore Khemani
Designation :	Director
Address :	1901-A, Jasmine Towers, Vasant Vihar, Poharan Road No. 2, Thane – 400610, Maharashtra, India
Date of Birth/Age :	01.01.1968
Date of Appointment :	14.01.2011
DIN No.:	00072812

KEY EXECUTIVES

Name :	Mr. Arindan
Designation :	UP Finance
Name :	Ms. Neeta Mukerji
Designation :	Manager
Address :	1901/02, A Wing, Raheja Atlantis Ganapat Rao Kadam Marg, Worli, Mumbai – 400018, Maharashtra, India
Date of Birth/Age :	16.10.1965
Date of Appointment :	13.07.2011
PAN No.:	AAPPM4157P

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.09.2011

Names of Shareholders	No. of Shares
State Bank of India, India	64816980
IDBI Bank Limited , India	62323800
ICICI Bank Limited, India	43076000
Punjab National Bank, India	32506486
Lathe Investment Pte Limited	32164818
Infrastructure Development Finance Company Limited, India	27197743
First Rand Bank Limited, India	13358662
Barclays Bank , Plc, India	4866757
The Karnataka Bank Limited, India	8562600
Housing Development Finance Corporation Limited, India	7541137
ICICI Home Finance Company Limited, India	7340000
The Karur Vysya Bank Limited, India	6380000
Quiveo Enterprises Limited, India	4400000
The Federal Bank Limited, India	4139300
The South Indian Bank Limited, India	4139300
HDFC Bank Limited, India	1655720
Sudhamoy Khasnobis	123554
Mudalageeri Sudhendranath	60000
Mihir Nanavati	37855
S. V. Venkatakrishnan	35759
Gurudas Saha	32476
Nilesh Shah	17320
Shruti Kumar	15731
Sanjay Sawant	12500
Prabha Bangia	12415
Mehul Gandhi	11816
Manoj Deepchand Gangwal	11648
S. K. Amarnath	7150
Pankaj Jain	7034
Tshering Samdup	6845
Aalok Dave	6700
Killol Thakore	5057
Dhaval Sampat	5000
Vanita Sawant	4192
Piyush Gundecha	4131
Rosa Mascarenhas	3739
Jigar Dalal	3000
Achrekar Dhananjay Shashikant	2544
Chandan Churiwal	1371
TOTAL	324897140

Equity Share Break up (Percentage of Total Equity)

As on 30.09.2011

Category	Percentage
Foreign holdings( Foreign institutional investor(s), Foreign companie(s) Foreign financial institution(s), Non-resident Indian(s) or Overseas Corporate bodies or Others	15.36
Bodies corporate	4.59
Other top fifty shareholders	0.13
Total	100.00

BUSINESS DETAILS

Line of Business :

Providing Assets Reconstruction Services.

GENERAL INFORMATION

No. of Employees :

Not Divulged

Bankers :

Not Divulged

Facilities :

Secured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Rupee term loans banks secured	0.000	694.380
Total	0.000	694.380
Unsecured Loan	As on 31.03.2011 (Rs. in Millions)	As on 31.03.2010 (Rs. in Millions)
Other debt unsecured	0.000	3504.683
Total	0.000	3504.683

Banking Relations :	--
Auditors 1 :
Name :	N. M. Raiji and Company Chartered Accountant
Address :	Universal Insurance Building, 6th Floor, Sir P.M. Road, Fort, Mumbai 400 001, Maharashtra, India
PAN.:	AAAFN4217G
Auditors 2:
Name :	Kalyaniwalla and Mistry Chartered Accountant
Address :	Kalpataru Heritage, 127, M.G. Road, Fort, Mumbai 400 001, Maharashtra, India
PAN.:	AAAFK7554R

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
500000000	Equity Shares	Rs.10/- each	Rs.5000.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
324897140	Equity Shares	Rs.10/- each	Rs.3248.971 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		3248.971	3248.971	3248.971
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		11058.624	11024.671	10600.073
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		14307.595	14273.642	13849.044
LOAN FUNDS
1] Secured Loans		0.000	694.380	2026.824
2] Unsecured Loans		0.000	3504.683	3637.382
TOTAL BORROWING		0.000	4199.063	5664.206
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		14307.595	18472.705	19513.250
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		144.618	244.175	192.279
Capital work-in-progress		370.269	6.971	102.240
INVESTMENT		9970.130	14599.952	16014.952
DEFERREX TAX ASSETS		256.418	19.033	57.536
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	0.000	0.000	0.000
	Sundry Debtors	915.676	982.930	851.379
	Cash & Bank Balances	3307.959	1453.346	1078.374
	Other Current Assets	175.643	1360.624	1081.501
	Loans & Advances	943.385	759.531	967.213
Total Current Assets		5342.663	4556.431	3978.467
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	33.447	29.825	42.572
	Other Current Liabilities	1651.953	517.556	344.173
	Provisions	91.103	406.476	445.479
Total Current Liabilities		1776.503	953.857	832.224
Net Current Assets		3566.160	3602.574	3146.243
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		14307.595	18472.705	19513.250

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	1391.656	1192.578	890.464
		Other Income	799.398	1263.850	1792.317
		TOTAL (A)	2191.054	2456.428	2682.781
Less	EXPENSES
		Manufacturing service costs	0.000	0.000	0.000
		Employee related expenses	270.262	253.290	168.980
		Administrative selling other expenses	1511.577	565.327	433.562
		TOTAL (B)	1781.839	818.617	602.542
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		409.215	1637.811	2080.239
Less	FINANCIAL EXPENSES (D)		268.550	484.920	944.284
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		140.665	1152.891	1135.955
Less/ Add	DEPRECIATION/ AMORTISATION (F)		68.385	76.612	42.962
	PROFIT BEFORE TAX (E-F) (G)		72.280	1076.279	1092.993
Less	TAX (H)		38.330	348.789	409.259
	PROFIT AFTER TAX (G-H) (I)		33.950	727.490	683.734
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1437.968	1272.882	886.609
Less	APPROPRIATIONS
		Transfer to Contingency Reserve	99.315	259.318	37.579
		Dividend		43.169	222.131
		Tax on Dividend		259.918	37.751
	BALANCE CARRIED TO THE B/S		1372.603	1437.968	1272.882
	Earnings Per Share (Rs.)		0.10	2.24	2.46

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	1.55	29.62	25.49
Net Profit Margin (PBT/Sales)	(%)	5.19	90.25	122.74
Return on Total Assets (PBT/Total Assets}	(%)	1.32	22.42	26.21
Return on Investment (ROI) (PBT/Networth)		0.01	0.07	0.08
Debt Equity Ratio (Total Liability/Networth)		0.12	0.36	0.47
Current Ratio (Current Asset/Current Liability)		3.04	4.78	4.78

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) Constitutions of the firm	Yes
4) Premises details	No
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	No
18) Major customers	No
19) Payments terms	No
20) Export / Import details (if applicable)	No
21) Market information	--
22) Litigations that the firm / promoter	--
23) Banking Details	No
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

Details of Sundry Creditors

Sundry Creditors	31.03.2011	31.03.2010	31.03.2009
	Rs. In Millions
Creditors due small micro enterprises	0.000	0.000	0.000
Creditors due others	33.447	29.825	42.572
TOTAL	33.447	29.825	42.572

Note: The registered office of the Company was shifted to the above address from Times Tower 9^th Floor, Kamala Mills Compound, Lower Parel (West), Mumbai - 400013 w.e. f. May 30, 2011.

Business overview

During the year the Indian economy continued its growth momentum driven largely by strong domestic demand reflected in GDP growth of over 8.5% in real terms. In order to address the high inflation rate, the RBI’s raised the benchmark rates. This monetary transmission is increasingly visible in rise in borrowing and lending rates of the banks and moderation of credit growth during third and fourth quarter of FY 2010-11.The rising interest rate scenario could have impact on credit growth and may also impact quality of credit book of the banking system at margin.

The market for non-performing loans (NPLs) in India continued to be seller driven with a significant gap in price offered by prospective buyers of NPLs and banks’ expectations, which led to a low success rate of consummation of sale of NPLs. Further, the RBI guidelines requiring banks to achieve provision coverage ratio (PCR) of 70% by September 30, 2010 was expected to lead to more NPLs being offered for sale. However, consequent to the amendment allowing written-off NPLs to be considered in computing the PCR, banks were better off retaining the well provided / written off NPAs, as it helped them in achieving the PCR. Case specific extensions / exemptions granted by RBI to the banks as regards achievement of the PCR also impacted the flow of NPLs in the market for sale. There was thus, no significant pressure on banks during the period under review to sell NPLs, as a result of which only a small percentage of NPLs offered for sale actually got sold. The RBI recently clarified that the requirement of PCR of 70% applies only to accounts classified as ‘non-performing’ upto September 30, 2010 and did not apply to NPLs generated subsequent to that date, which will further impact the flow of NPLs in the market.

As the banks are better off retaining the well provided / written off NPAs, the Company proactively stepped up efforts to offer end-to-end NPL servicing solutions under a fee based agency model by leveraging its experience, expertise, and infrastructure and branch network. This arrangement would enable banks to accelerate collections while retaining the NPLs in its books and reckoning the provisions in respect thereof in computation of the PCR. The Company has finalized contracts with leading banks for servicing their NPL portfolios in the retail as well as SME segments and the portfolios are expected to be taken over for servicing during the current year.

II. Operating performance the operating performance of the Company during the year under review is summarized below:

• Acquisition

During the year financial assets involving total dues of Rs.10980.000 millions were acquired from 11 banks /financial institutions (sellers) for an aggregate consideration of Rs.2520.000 millions. The primary reasons for lower acquisition performance are the restricted flow of NPLs for sale in the market, substantial gap in banks’ expectation of value and Arcil’s offer and lack of selling pressure on banks. Low success rate of deal consummation by banks in auction scenarios continues to be an issue. The gap in banks’ price expectation and ARCs offer arises mainly due to difference in cost of funds of ARCs and banks. The flow of NPLs in the market continued to be restricted due to regulatory forbearance for restructuring of stressed exposures which also led to lack of selling pressure on banks. While NPLs with aggregate principal debt of Rs.66000.000 millions were offered by banks during FY 2010–11, on quite a few occasions, the portfolios were withdrawn by the banks. The overall success rate of consummation of deals by banks in NPL auctions where the Company participated was about 20% and that where the Company’s bid was the highest is estimated at 45%.

Another factor, though not very significant, was that ARCs which had recently become operational were aggressive in their bids so as to commence acquisition and build a portfolio. Some of these ARCswere willing to dilute certain standard commercial terms (e.g. indemnity clauses) which the Company was not in favour of, which could have led a part of the deals going to other ARCs. Upto March 31, 2011, theCompany had acquired an aggregate debt of Rs.484730.000 millions at an average price of 25% of the debt acquired.

During the year, the Company established first time relationship with 4 sellers, thereby broadening the relationship to 62 banks / financial institutions, who collectively account for over 80% of the NPAs in the banking system.

FIXED ASSETS

• Office Building
• Leasehold Improvements
• Office Equipment
• Computers
• Furniture and Fixture
• Vehicles
• Software

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.52.79
UK Pound	1	Rs.85.17
Euro	1	Rs.69.53

INFORMATION DETAILS

Information Gathered by :	PDT
Report Prepared by :	MYI

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	3
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	3
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		28

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.