MIRA INFORM REPORT

Report Date :

14.01.2012

IDENTIFICATION DETAILS

Name :	AVINEON INDIA PRIVATE LIMITED (w.e.f. 09.10.2003)
Formerly Known As :	KAY AAR SOFTWARE PRIVATE LIMITED
Registered Office :	Cyber Gateway, Plot No.10, Survay No.64, Block A, 1^st Floor, Near Cyber Pearl, Hitech City, Madhapur, Hyderabad – 500081, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	08.06.1998
Com. Reg. No.:	01-029548
Capital Investment / Paid-up Capital :	Rs.40.210 Millions
CIN No.: [Company Identification No.]	U72100AP1998PTC029548
TAN No.: [Tax Deduction & Collection Account No.]	HYDA04101G
PAN No.: [Permanent Account No.]	AADCA7416Q
Legal Form :	Private Limited Liability Company
Line of Business :	Providing Engineering, Technology and Geospatial Solutions and Services.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (49)

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

Maximum Credit Limit :	USD 990000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered normal for 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 :	Cyber Gateway, Plot No.10, Survay No.64, Block A, 1^st Floor, Near Cyber Pearl, Hitech City, Madhapur, Hyderabad – 500081, Andhra Pradesh, India
Tel. No.:	91-40-55632452 / 66632452
Fax No.:	91-40-55687399
E-Mail :	msarupuru@avineonindia.com
Website :	www.avineonindia.com

DIRECTORS

As on : 30.09.2011

Name :

Mr. Bhashya Karlu Rambhala

Designation :

Director

Address :

3018, Robin Ridge, Ct.,Fairfax – 22031, USA, Foreign

Date of Birth/Age :

04.02.1951

Date of Appointment :

16.11.1998

Din No.:

02069220

Name :

Mrs. Soundara Raghavan Rangachari

Designation :

Director

Address :

Rajan Apartments, First Floor 18/6, Bharathi Avenue Kotturpuram, Chennai, Tamilnadu

Date of Birth/Age :

28.10.1948

Date of Appointment :

03.06.2006

Din No.:

00362555

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	U74140AP1987PTC007821	SUPRADEEPA MANAGEMENT CONSULTANTS PRIVATE LIMITED	Additional director	31/08/2005	31/08/2005	15/04/2011	Active	NO
2	U72100AP1998PTC029548	AVINEON INDIA PRIVATE LIMITED	Director	3/6/2006	3/6/2006	-	Active	NO
3	U72200AP2000PTC034836	GLOBARENA WEB TECHNOLOGIES PRIVATE LIMITED	Director	30/09/2008	4/6/2008	-	Amalgamated	NO
4	U72200AP2000PTC034224	GLOBARENA TECHNOLOGIES PRIVATE LIMITED	Director	30/09/2008	4/6/2008	-	Active	NO
5	L26931AP1986PLC006480	RESTILE CERAMICS LIMITED	Whole-time director	7/3/2009	30/08/2008	11/7/2009	Active	NO
6	U52321TN1995PTC032787	RAGHAVENDRA EXPORTS PRIVATE LIMITED	Additional director	10/10/2009	10/10/2009	-	Strike off	NO
7	U55101KA2002PTC031224	WONDERLA HOLIDAYS PRIVATE LIMITED	Whole-time director	31/01/2011	31/01/2011	16/08/2011	Active	NO

Name :

Mr. Raghu P Ganeshan

Designation :

Alternate Director

Address :

7-1-414/45,F. No. 102, Krishna Residency Sreenivasa Nagar (East), Hyderabad, Andhra Pradesh

Date of Birth/Age :

21.12.1972

Date of Appointment :

11.12.2006

Din No.:

01811806

Name :

Mr. Subba Rao Rambhala

Designation :

Director

Address :

Plot No. 791, H. No. 8-2-293/82/A/791, Flat No. 103, Sairam residency, Road No. 40, Jubilee Hills, Hyderabad, Andhra Pradesh.

Date of Birth/Age :

24.03.1953

Date of Appointment :

01.04.2007

Din No.:

01943769

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.09.2011

Names of Shareholders	No. of Shares
Dr. Ravindranath Tagore Ravi	600
Ram Kumar Chilukuri	367260
Avineon Insurance	2561100
Bhashya Karlu Rambhala	732057
Anupama Rambhala	360000
R. S. Raghavan	1
Raghu P Ganeshan	1
Subba Rao Rambhala	1
Total	4021020

AS ON 30.09.2011

Equity share breakup
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)	90.86
Directors or relatives of directors	0.01
Other top fifty(50) shareholders (other than listed above)	9.13
Total	100.00

BUSINESS DETAILS

Line of Business :

Providing Engineering, Technology and Geospatial Solutions and Services.

GENERAL INFORMATION

No. of Employees :	Not Available
Bankers :	ICICI Bank Limited, ICICI Towers, Bandra Kurla Complex, Mumbai-400051, Maharashtra, India.
Facilities :	---

Banking Relations :	---
Auditors :
Name :	Walkar Chandiok and Company Chartered Accountants
Address :	Coramandel House, 1-2-10, Sardar Patel Road, Secunderabad – 500003, Andhra Pradesh, India
Pan No.:	AAAFW4298E
Holding Company:	Avineon Inc, USA
Fellow Subsidiary :	Avineon Europe, UK

CAPITAL STRUCTURE

AS ON 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
10000000	Equity Share	Rs.10/- Each	Rs.100.000 Million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
4021020	Equity Share	Rs.10/- Each	Rs.40.210 Millions

Of the above :

1)2561100 Equity shares of Rs.10/- each, fully paid up are held by Avikneon Inc, USA, the Holding Company.

2)3350850 equity shares Rs.10/- each are allotted as fully paid-up by way of bonus shares by capitalization of balance in share premium account and profit and loss account.

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		40.210	40.210	40.210
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		209.419	201.446	162.255
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		249.629	241.656	202.465
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	0.000	0.000
TOTAL		249.629	241.656	202.465
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		42.214	60.685	46.351
Capital work-in-progress		0.000	0.848	0.000
INVESTMENT		82.841	20.004	26.350
DEFERREX TAX ASSETS		22.242	20.864	4.059
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	0.000	0.000	0.000
	Sundry Debtors	87.412	160.562	127.858
	Cash & Bank Balances	21.768	24.365	16.233
	Other Current Assets	0.000	0.000	7.546
	Loans & Advances	52.732	30.605	26.775
Total Current Assets		161.912	215.532	178.412
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	13.543	32.574	25.480
	Current Liabilities	9.428	10.567	12.882
	Provisions	36.609	33.136	14.345
Total Current Liabilities		59.580	76.277	52.707
Net Current Assets		102.332	139.255	125.705
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		249.629	241.656	202.465

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income from services	367.959	429.955	393.881
		Other Income	7.016	1.987	8.819
		TOTAL	374.975	431.942	402.700
Less	EXPENSES
		Personnel expenses	220.926	249.420	209.612
		Selling, general and administrative expenses	118.792	125.881	100.721
		TOTAL	339.718	375.301	310.333
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		35.257	56.641	92.367
Less/ Add	DEPRECIATION/ AMORTISATION		24.214	21.410	21.462
	PROFIT BEFORE TAX		11.043	35.231	70.905
Less	TAX		3.070	5.412	2.753
	PROFIT AFTER TAX		7.973	40.643	68.152
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		201.446	162.255	99.091
	BALANCE CARRIED TO THE B/S		209.419	201.446	162.255
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	321.445	403.580	374.723
	TOTAL EARNINGS		321.445	403.580	374.723
	IMPORTS
		Capital Goods	0.000	0.627	0.757
	TOTAL IMPORTS		0.000	0.627	0.757
	Earnings Per Share (Rs.)		1.98	9.75	15.71

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	2.12	0.09	15.68
Net Profit Margin (PBT/Sales)	(%)	3.00	8.19	16.37
Return on Total Assets (PBT/Total Assets}	(%)	5.40	12.75	29.33
Return on Investment (ROI) (PBT/Networth)		0.04	0.14	0.33
Debt Equity Ratio (Total Liability/Networth)		0.23	0.31	0.26
Current Ratio (Current Asset/Current Liability)		2.71	2.82	3.38

LOCAL AGENCY FURTHER INFORMATION

BACKGROUND

Subject ('the Company’ or ‘Avineon’) was incorporated on 8 June 1998 as a private limited company under the provisions of the Companies Act, 1956 ("the Act") of India. The Company is headquartered in Hyderabad, India and is a 63.69% majority owned subsidiary of Avineon Inc, USA ("the Parent"). The Company is in the business of providing Information Technology Enabled Services (ITeS) in the areas of technical data management, storage and retrieval. The range of services offered by the Company include drawing, conversion and digitization of maps, enterprise software solutions, engineering consultancy and other services using software applications such as Computer Aided Design (CAD), Computer Aided Manufacturing (CAM) and geospatial information system (GIs). The principal markets for the Company's services are USA, Europe and Middle East.

FINANCE :

The Company delivered reasonably good performance in cash generation during the year driven by business performance and efficient collection of receivables. The cash surplus was invested in balanced portfolio of safe and liquid debt market instruments.

MANAGEMENT DISCUSSION AND ANALYSIS

GEO-SPATIAI INFORMATION SYSTEM DIVISION

During the year 2010-2011, the Division shows a decrease in growth DF 11 % over the previous year, However, the Division is showing a robust growth with parental support from Avineon Inc,, USA.

ENGINEERING SEWICES DIVISION

This Division shows a decrease in growth of 19% over the previous year. However opportunities are plenty and the Division is focusing on growth in Middle East and Asia Pacific region. Domestic business potential also is very high.

IT SERVICES DIVISION

This Division has not shown the growth it has the potential for- Attention is not focused La attract business in a sustained manner. The Directors are confident that this Division will contribute in a great way to revenue generation in the coming years.

CONTINGENT LIABILITY :

(a) Income tax

During the year ended 3 1 March 2011, the Company has received an assessment order from Income Tax Officer for Transfer Pricing adjustment of Rs. 6.359 millions amounting to total tax demand of Rs. 3.133 millions (including interest) under Section 92CA of Income Tax Act for the Assessment Year 2006-07. The Company has approached the Income Tax Appellate Tribunal after rejection of petition by the Dispute Resolution Panel and filed their objections against the order. Further the Company has received a draft assessment order from Income Tax Officer for Transfer Pricing adjustment of Rs. 28.002 millions amounting to total tax demand of Rs.9.517 millions Section 92CA of Income Tax Act for the Assessment Year 2007-08. The Company has approached the Dispute Resolution Panel under Section 144 of the Income Tax Act and filed their objections against the order.

(b) Value added tax

During the previous year the Company has received assessment order of Value Added Tax from Commercial Tax Officer for the period from April 2005 to March 2009 for Rs. 4.764 millions by classifying the services provided by the Company under the category 'Transfer of Technical Know-how; Goods of Intangible or Incorporeal Nature'. The Company has filed an appeal before the appellate authority which is pending disposal. Further the Company has obtained stay from Honorable High Court of Andhra Pradesh.

FORM : 8

BANKERS CHARGES REPORT AS PER REGISTRY

Name of the company	AVINEON INDIA PRIVATE LIMITED
Presented By	Mr. Ram Kumar Chilukuri AVINEON INDIA PRIVATE LIMITED
Date and description of instrument creating the change	Loan Cum Hypothecation Agreement dated 31.05.2004 Between the company and ICICI Bank Limited Pursuant to the resolution passed by the company on the 22 day of April 2004.
Amount secured by the charge/amount owing on the securities of charge	For Rs.1.235 Millions (Herein referred to as the facility)
Gist of the terms and conditions and extent and operation of the charge.	To be as per terms of the loan agreements. In consideration of ICICI Bank having agreed to land and advance to the company the facilities, agreement and declaration by the company, inter alla, as follows: Covenant by the company to repay the facility and pay interest and all other monies in the manner set out in the facility agreement dated. Between the company and ICICI Bank and to comply with the terms and conditions of the said facility agreements. The said (Herein referred to as the said facility Agreement) Goods were there by hypothecated to ICICI Bank, as and by way of first charge as security for and be charged with the repayments of the facility with all interest, liquldated damage, commitment charge, premla on prepayment or on redemption, costs, charge and expenses and all other monies payable by the company to ICICI Bank in respect thereof. The company to keep the said goods in marketable and good condition and also insured as provided therein. Power of entry, Power to take charge and/or possession of, seize, recover, receive, appoint receivers of and reabove and/or sale by public auction or private contract, dispatch for realization or otherwise dispose off or deal with all or any part of the said goods, etc. as provided therein.
Name and Address and description of the person entitled to the charge.	ICICI Bank Limited ICICI Tower, Bandra Kurla Complex, Mumbai - 400051
Date and brief description of instrument modifying the charge	Nil
Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	Nil

FIXED ASSETS:

• Computers
• Office Equipments
• Electrical Installation
• Furniture and Fixture
• Vehicles

AS PER WEB DETAILS:

Karlu Rambhala

President and Chief Executive Officer

Karlu Rambhala founded Avineon in 1992 and serves as President and Chief Executive Officer. As the company’s top executive, Karlu oversees all of Avineon’s divisions and strategically guides the company as it delivers sophisticated information technology (IT) systems and solutions to U.S. Government and commercial clients.

Karlu’s experience spans more than twenty two years in the technology sector with significant expertise in a wide range of computer aided engineering, database management and software engineering environments. Under Karlu’s leadership, Avineon has grown from a small start up to a global enterprise with subsidiaries in the UK, France and India and more than 700 employees worldwide. Prior to founding Avineon, Karlu worked in various technical and management positions in the manufacturing and the defense industry.

Karlu earned undergraduate degrees in Marine Engineering and Mathematics/Physics. He holds Bachelor of Science and Master of Science degrees in Engineering from the University of Michigan where he also completed the Executive Program at the Stephen M. Ross School of Business.

Raghu Ganeshan

President, Avineon India Private Limited

Raghu Ganeshan serves as President of Avineon India Private Limited (AIPL), the India-based subsidiary of Avineon, Inc.,where he oversees more than 900 employees and holds direct responsibility for AIPL’s operational affairs in engineering, computer-aided design, geographic information systems (GIS) and IT services. In addition, Raghu is responsible for ensuring AIPL maintains stringent requirements for information security management to protect confidential company and customer information.

Raghu’s technical experience includes GIS data modeling, requirements study, large scale database creation and maintenance, systems integration, application development and data migration. Since joining Avineon in 1999, he has held a number of top management roles within the company’s operations in the United States and India.

Raghu earned a Bachelor of Technology degree in Civil Engineering from Indian Institute of Technology and a Master of Science degree in Civil Engineering from Georgia Institute of Technology.

Subba Rao

Executive Vice President, Avineon India Private Limited

Mr. Subba Rao Rambhala has over thirty years of vast industry experience in engineering and management. As Executive Vice President of the Engineering Division, Mr. Rambhala plans, organizes, and directs the activities of the division and ensures that Engineering services to meet the required quality objectives. His responsibilities include all phases of project management for multiple projects and he leads a workforce of 350+ engineering staff. In addition, he oversees engineering, feasibility studies, design and development, specification development, proposal development, quality management, engineering design review and contract administration operations of the division.

Mr. Subba Rao’s technical expertise is spread across various aspects of engineering design, project management, selection and procurement of equipment and material, schedule and cost control, commissioning and startup, operation, maintenance, cost estimating and assessment of economic justification, review and approval, and associated equipment and he has executed projects across the globe from India, South East Asia, and United States.

Mr. Subba Rao is a Bachelor of Mechanical Engineering (Power group) and has also secured a Boiler Operation Engineers Certificate from Andhra Pradesh State Government Board. He is accredited with training programs in Methodologies of turbines, from BHEL, Special techniques training for boilers, from Institute of Energy Management, Bombay and is also trained in ISO-9000 procedures.

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. 51.43
UK Pound	1	Rs. 79.10
Euro	1	Rs. 66.17

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	5
--RESERVES	1~10	6
--CREDIT LINES	1~10	5
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		49

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.