MIRA INFORM REPORT

Report Date :

29.06.2012

IDENTIFICATION DETAILS

Name :	DYNACONS SYSTEMS AND SOLUTIONS LIMITED
Registered Office :	78, Ratnajyoti Industrial Estate, Irla Lane, Vile Parle (West), Mumbai – 400056, Maharashtra
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	26.09.1995
Com. Reg. No.:	11-093130
Capital Investment / Paid-up Capital :	Rs.59.231 Millions
CIN No.: [Company Identification No.]	L72200MH1995PLC093130
TAN No.: [Tax Deduction & Collection Account No.]	MUMD09894D/ MUMD05367F
PAN No.: [Permanent Account No.]	AABCD1621Q
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchange.
Line of Business :	Supply of Hardware and Software as a package in the form of “Solution”.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (44)

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

Maximum Credit Limit :	USD 560000
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 :	78, Ratnajyoti Industrial Estate, Irla Lane, Vile Parle (West), Mumbai – 400056, Maharashtra, India
Tel. No.:	91-22-66889900
Fax No.:	91-22-26716641
E-Mail :	dharmesh@dynacons.com sales@dynacons.com
Website :	http://www.dynacons.com

DIRECTORS

(AS ON 31.03.2011)

Name :	Mr. Shirish M. Anjaria
Designation :	Chairman and Managing Director
Name :	Mr. Parag J. Dalal
Designation :	Executive Director
Name :	Mr. Dharmesh S. Anjaria
Designation :	Executive Director
Name :	Mr. Mukesh P. Shah
Designation :	Director
Name :	Mr. Dilip P. Palicha
Designation :	Director ( Nominee Of Shareholders)
Name :	Mr. Viren C. Shah
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Ravishankar Singh
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 31.03.2012)

Names of Category	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	1,710,969	28.89
Bodies Corporate	46,475	0.78
Sub Total	1,757,444	29.67
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	1,757,444	29.67
(B) Public Shareholding
(1) Institutions	--	--
(2) Non-Institutions
Bodies Corporate	372,917	6.30
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	3,143,564	53.07
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	584,440	9.87
Any Others (Specify)	64,715	1.09
Clearing Members	1,746	0.03
Non Resident Indians	62,969	1.06
Sub Total	4,165,636	70.33
Total Public shareholding (B)	4,165,636	70.33
Total (A)+(B)	5,923,080	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	5,923,080	100.00

BUSINESS DETAILS

Line of Business :

Supply of Hardware and Software as a package in the form of “Solution”.

Products :

Products Description	Item Code No.
Computer Systems	847100
Computer Software	852400
Computer Peripherals	847300

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· Dena Bank

Facilities :

Secured Loans	31.03.2011	31.03.2010
	(Rs. In Millions)
Working Capital facilities with Banks (Secured against hypothecation of inventories, book debts and personal guarantees of some of the Directors)	79.737	72.728
Term Loans with Banks (Secured by way of exclusive change on the equipment out of the proceeds of loan and personal guarantees of some of the Directors)	8.740	0.000
Vehicles Loans (Secured against hypothecation of Motor Vehicles)	1.400	1.702
Total	89.877	74.430

Banking Relations :	--
Auditors :
Name :	P. C. Ghadiali and Company Chartered Accountant
Address :	Mumbai, Maharashtra, India

CAPITAL STRUCTURE

(AS ON 29.09.2011)

Authorised Capital :

No. of Shares	Type	Value	Amount
30000000	Equity Shares	Rs.10/- each	Rs.300.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
5923080	Equity Shares	Rs.10/- each	Rs.59.231 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2011	31.03.2010
		(Standalone)
SHAREHOLDERS FUNDS
1] Share Capital		59.231	59.231
2] Share Application Money		0.000	0.000
3] Reserves & Surplus		81.742	74.051
4] (Accumulated Losses)		0.000	0.000
NETWORTH		140.973	133.282
LOAN FUNDS
1] Secured Loans		89.877	74.430
2] Unsecured Loans		0.000	0.000
TOTAL BORROWING		89.877	74.430
DEFERRED TAX LIABILITIES		8.755	7.149
TOTAL		239.605	214.861
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		102.763	101.933
Capital work-in-progress		3.250	4.950
INVESTMENT		15.111	15.111
DEFERREX TAX ASSETS		0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	51.158	21.149
	Sundry Debtors	63.307	88.412
	Cash & Bank Balances	17.802	9.690
	Other Current Assets	0.000	0.000
	Loans & Advances	6.489	26.271
Total Current Assets		138.756	145.522
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	12.681	46.143
	Other Current Liabilities	6.881	6.027
	Provisions	0.713	0.485
Total Current Liabilities		20.275	52.655
Net Current Assets		118.481	92.867
MISCELLANEOUS EXPENSES		0.000	0.000
TOTAL		239.605	214.861

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010
			(Standalone)
	SALES
		Sales of Hardware, Software, Development and Services	423.334	380.610
		Other Income	0.018	0.192
		TOTAL (A)	423.352	380.802
Less	EXPENSES
		Cost of Sales and Development	365.975	335.728
		Operating and Establishment Expenses	27.269	22.959
		TOTAL (B)	393.244	358.687
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		30.108	22.115
Less	FINANCIAL EXPENSES (D)		9.515	5.061
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		20.593	17.054
Less/ Add	DEPRECIATION/ AMORTISATION (F)		9.181	7.275
	PROFIT BEFORE TAX (E-F) (G)		11.412	9.779
Less	TAX (H)		3.721	2.510
	PROFIT AFTER TAX (G-H) (I)		7.691	7.269
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		55.004	47.739
Less	Short Provision for Taxation for Earlier years		0.000	0.004
	BALANCE CARRIED TO THE B/S		62.695	55.004
	Earnings Per Share (Rs.)		0.13	0.12

QUARTERLY RESULTS

PARTICULARS	30.06.2011	30.09.2011	31.12.2011	31.03.2012
Type	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Net Sales	107.160	115.020	121.780	178.000
Total Expenditure	99.500	106.150	112.280	167.560
PBIDT (Excl OI)	7.660	8.870	9.500	10.440
Other Income	0.000	0.010	0.010	0.000
Operating Profit	7.660	8.880	9.510	10.440
Interest	2.370	2.500	3.270	4.010
Exceptional Items	0.000	0.000	0.000	0.000
PBDT	5.290	6.380	6.240	6.430
Depreciation	2.210	2.560	2.320	2.770
Profit Before Tax	3.080	3.820	3.910	3.650
Tax	0.600	0.700	0.700	2.160
Provisions and contingencies	0.000	0.000	0.000	0.000
Profit After Tax	2.480	3.120	3.210	1.500
Extraordinary Items	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000
Net Profit	2.480	3.120	3.210	1.500

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010
		(Standalone)
PAT / Total Income	(%)	1.82	1.91
Net Profit Margin (PBT/Sales)	(%)	2.70	2.57
Return on Total Assets (PBT/Total Assets}	(%)	4.73	3.95
Return on Investment (ROI) (PBT/Networth)		0.08	0.07
Debt Equity Ratio (Total Liability/Networth)		0.78	0.95
Current Ratio (Current Asset/Current Liability)		6.84	2.76

LOCAL AGENCY FURTHER INFORMATION

Check list by info Agents	Available in Report (Yes/ No)
Year of Establishment	Yes
Locality of the Firm	Yes
Constitution of the Firm	Yes
Premises details	No
Type of Business	Yes
Line of Business	Yes
Promoter’s Background	Yes
No. of Employees	No
Name of Person Contacted	No
Designation of Contact person	No
Turnover of Firm for last two years	Yes
Profitability for last two years	Yes
Reasons for variation <> 20%	-----
Estimation for coming financial year	No
Capital in the business	Yes
Details of sister concerns	No
Major Suppliers	No
Major Customers	No
Payments Terms	No
Export/ Imports Details (If applicable)	No
Market Information	-----
Litigations that the firm/ Promoters Involved in	-----
Banking details	Yes
Banking Facility Details	Yes
Conduct of the Banking Account	-----
Buyer visit details	-----
Financials, if provided	Yes
Incorporation details is applicable	Yes
Last Accounts filed at ROC	Yes
Major Shareholders, if available	No

MANAGEMENT ANALYSIS AND DISCUSSIONS

COMPANY PERFORMANCE

The company earned total revenues of Rs.423.352 Millions compared with Rs.380.802 Millions during the previous year, reflecting a growth of 11% over the previous year. The profit before tax stood at Rs.11.412 Millions as compared to Rs.9.779 Millions in the previous year, a growth of 17% over the previous year. The Company has made a provision of tax totaling to Rs.3.721 Millions and the profit after tax stood at Rs.7.691 Millions for the current year.

The business transformation initiatives taken in the last few years have yielded good results. The Company has decided to defocus from the low margin equipment business and grow the high value services. The operating profit (earnings before interest, tax and depreciation) increased by 36% to Rs 30.107 Millions from Rs 22.114 Millions in the previous year.

The company has continued to grow its solutions and services portfolio to address business and customer needs. There is a strong focus on driving operational efficiencies due to which it has posted a strong performance during the previous year.

REVIEW OF OPERATIONS

The Global economy has continued to recover and this trend is expected to continue in the coming years. Developed economies are sluggish in recovery and emerging economies continue to show a good growth rate. The Indian growth story continues in spite of inflationary pressures and the technology spending in India is expected to grow significantly higher as compared to the other countries. The domestic market continues to have a strong services and solutions driven component. Investment in IT is increasingly been seen as an important element of growth strategies and also a fundamental enabler of cost reduction and cost optimization.

Changing economic and business conditions, and globalization are creating an increasingly competitive market environment that is driving corporations to transform the manner in which they operate. Customers are increasingly demanding improved products and services with accelerated delivery times and at lower prices. To address these needs adequately, corporations are focusing on their core competencies and are using outsourced technology service providers to help improve productivity, reduce business risk, and manage operations more effectively.

The Company's System Integration capability, experience, quality processes, proven track record of selling and servicing high-end IT products and multi-platform technical knowhow have helped it benefit from the enhanced traction in the market place. They have a team of specialists with experience in leveraging technology to help improve efficiency and security. The company provides dynamic technology solutions and has the capability to address the increased complexity, cost and risk associated with these technology platforms.

Dynacons' multi technology, multi product offering to customers ensures that they have the convenience and benefit of sourcing their IT products and solutions from a single source. They deliver value to their customers through a comprehensive portfolio of services and solutions that meets the entire lifecycle needs of a business.

The continued focus on the BFSI and the Government verticals has yielded spectacular results. The Company has added several key customers such as State Bank of India, Punjab National Bank, Central Bank, Bank of India etc, towards managing the IT Infrastructure and Networking for their offices and braches. There is a continued focus on Infrastructure Services which enabled the company get into deeper engagement with existing customers and win large domestic deals in facility management, nationwide systems rollout and helpdesk services.

The company has done several solution deployments that include turnkey project implementations, integration and set-up of centralized data centres and end-to-end security deployments. The successful deployment and completion of the order from Municipal Corporation of Greater Mumbai demonstrates the System Integration expertise of the company to undertake such large deployments. This order has paved the way for regular business from MCGM and other such entities. Their track record of delivering high quality solutions across the entire Information Technology life cycle and the strong domain expertise helps them to solidify these relationships and gain increased business from the existing clients.

Company provides comprehensive, end-to-end technology-based solutions which enables the company to extend their network of relationships, improve interaction with key decision makers within each client, increase the points of sale for new clients and diversify their service-mix. This integrated approach helps the company take advantage of growth opportunities available by becoming a vendor of choice for customers.

During the year, the key focus was on increasing the reach and market presence of the company and leveraging on the partnerships with global IT majors to increase the spectrum of offerings for customers. Taking a comprehensive view of business processes, applications, infrastructure, IT processes and tools, the customers transform their IT Infrastructure to optimize their investments and achieve maximum return on investments. The role of technology has evolved from supporting corporations to transforming them.

Businesses today face a considerable challenge to effectively optimize their IT infrastructure and related operations and deliver ever improving service levels to meet and exceed the expectations of their business-users without compromising on quality and security. Remote Infrastructure Management (RIM) is a mission-critical service requiring sophisticated tools and reflects high customer confidence and relationships. The company has successfully demonstrated its RIM service capability and is moving towards becoming a fully integrated service provider.

Going forward, the company is looking making strategic investments/acquisitions, investing in the right business solutions, leverage its expertise in providing IT infrastructure solutions to further enhance the spectrum of offerings and focus on services expansion and become a vendor of choice for organizations. These will help in accelerating the company's growth through the new customers and geographical markets, improving the profitability through cost reduction, economies of scale and efficient utilization of resources.

STRENGTHS

The company provides the entire spectrum of Information Technology services including Business Planning, Business Availability and Business Continuity Services. The company provides high quality, 24 hour, seven days a week support services by leveraging its expertise in managing IT Infrastructures for its customers. They undertake a systematic, aggressive and customer oriented approach to cater to this business segment.

The Company undertakes all activities related to IT infrastructure including infrastructure design and consulting services, turnkey systems integration of large network and data centre infrastructures including supply of associated equipment and software; on-site and remote facilities management of multi- location infrastructure of domestic clients. Their key differentiators include an end-to-end services and solutions driven model with a strong focus on quality in every aspect of service and product delivery.

This integrated approach helps the company take advantage of growth opportunities available by becoming a vendor of choice for customers.

They believe that with their diverse portfolio of solutions and services, domain expertise and increasing value-add to customers, they are best suited to be a strategic partner to their customers.

OUTLOOK

The growth in the economy as well as significant technology changes is presenting several opportunities to their company. The economic growth in the country has led to an increase in IT spends on infrastructure and services. In India, the higher growth is expected to come from the 2nd and 3rd tier towns and cities. The company's pan India presence will help to capitalize on this growth.

Cloud Computing and virtualization are changing the dynamics for providing solutions and services. The technology provides flexibility, convenience as well as reliability along with cost optimization. The Company is adapting this technology for its own use as well as for its offerings.

Several initiatives have been launched to identify new growth areas and simultaneously restructure existing growth engines. The company to enrich its company profile and build value for customers. The process of improving profitability and productivity has taken the required shape leading to better Leadership Development, Corporate Governance, Risk Management and Human Resources.

They believe their strong brand, the robust quality process and the access to skilled talent base at lower costs of providing services places to them in a unique position to take advantage of the trend towards outsourcing IT services. The IT services segment is expected to grow significantly and the company is gearing itself to derive the benefits of this growth.

CONTINGENT LIABILITIES

a) Claims against the Company not acknowledged as debts: NIL

b) Guarantees given by the company's bankers Rs.21.982 Millions (Previous year Rs.3.886 Millions)

FIXED ASSETS:

Tangible

· Premises Computer

· Computers

· Office Equipments

· Furniture and Fixtures

· Motor Car

Intangible

· Software Development Expenses

WEBSITE DETAILS:

PROFILE:

Subject is an IT company with global perspectives with its headquarters at Mumbai and branches all over India and at Multiple Locations abroad.

Company was evolved by a Team of Professionals with expertise in IT Solutions. These activities started Twenty Years ago with Management Consultancy, which created the need for a Software Consultancy, which carved the Niche of supply of Hardware and Software as a package in the form of “Solution”.

They have created a niche market and image with 3 main aspects - Innovation, Technology and Services. All these made Dynacons a reliable source for providing IT solutions to Customers.

They have the technical expertise and the Service delivery infrastructure to serve Customers at a level of quality consistent with their expectations. Company helps in the selection of the right technology and application that will yield the greatest return and build a business case for implementation based on lower Total cost of ownership and higher performance.

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.56.92
UK Pound	1	Rs.88.91
Euro	1	Rs.71.25

INFORMATION DETAILS

Report Prepared by :

NIT

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	4
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	4
--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	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		44

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.