MIRA INFORM REPORT

Report Date :

26.03.2012

IDENTIFICATION DETAILS

Name :	EDUCOMP SOLUTIONS LIMITED
Registered Office :	1211 Padma Tower, 15 Rajendra Place, New Delhi-110008
Country :	India
Financials (as on) :	31.03.2011
Date of Incorporation :	07.09.1994
Com. Reg. No.:	55-061353
Capital Investment / Paid-up Capital :	Rs.191.090 Millions
CIN No.: [Company Identification No.]	L74999DL1994PLC061353
TAN No.: [Tax Deduction & Collection Account No.]	DELE01691E
Legal Form :	Public Limited Liability of the Company. The company shares are listed on stock exchange.
Line of Business :	Providing Educational Services and Technology Equipments.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Aa (73)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 65000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and a reputed company having fine track. Financial position of the company appears to be sound. Directors are reported to be experienced and respectable businessmen. Fundamentals are strong and healthy. Trade relations are reported as fair. Business is active. Payments are reported to be regular 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 :	1211 Padma Tower, 15 Rajendra Place, New Delhi-110008, India
Tel. No.:	Not Available
Fax No.:	Not Available
E-Mail :	mohit.maheshwari@educomp.com
Website :	http://www.educomp.com
Corporate Office :	Educomp Tower, 514, Udyog Vihar, Phase II, Gurgaon-122001, Haryana, India

DIRECTORS

As on 31.03.2011

Name :	Mr. Shantanu Prakash
Designation :	Chairman and Managing Director
Name :	Mr. Jagdish Prakash
Designation :	Whole-Time Director
Name :	Mr. Gopal Jain
Designation :	Independent Non Executive Director
Name :	Mr. Sankalp Srivastava
Designation :	Independent Non Executive Director
Name :	Mr. Shonu Chandra
Designation :	Independent Non Executive Director
Name :	Mr. Rajiv Krishan Luthra
Designation :	Independent Non Executive Director
Name :	Mr. Shyama Chona
Designation :	Independent Non Executive Director

KEY EXECUTIVES

Audit Committee:
Name :	Mr. Sankalp Srivastava
Designation :	Member, Independent Non Executive Director
Name :	Mr. Shonu Chandra
Designation :	Member, Independent Non Executive Director
Name :	Mr. Gopal Jain
Designation :	Member, Independent Non Executive Director
Name :	Mr. Shantanu Prakash
Designation :	Member, Promoter and Executive Director
Remuneration Committee:
Name :	Mr. Sankalp Srivastava
Designation :	Chairman, Independent and Non Executive Director
Name :	Mr. Shonu Chandra
Designation :	Member, Independent Non Executive Director
Name :	Mr. Gopal Jain
Designation :	Member, Independent Non Executive Director
Finance Committee:
Name :	Mr. Sankalp Srivastava
Designation :	Chairman, Independent and Non Executive Director
Name :	Mr. Shantanu Prakash
Designation :	Member, Promoter and Executive Director
Name :	Mr. Mohit Maheshwari
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.12.2011

Category of Shareholder	Total No. of Shares	Total Shareholding as a % of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	47,553,645	49.52
Sub Total	47,553,645	49.52
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	47,553,645	49.52
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	756,001	0.79
Financial Institutions / Banks	514,614	0.54
Foreign Institutional Investors	31,294,118	32.59
Any Others (Specify)	-	-
Sub Total	32,564,733	33.91
(2) Non-Institutions
Bodies Corporate	3,432,872	3.57
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	10,633,393	11.07
Individual shareholders holding nominal share capital in excess of to Rs.0.100 Million	590,645	0.62
Any Others (Specify)	1,252,342	1.30
Non Resident Indians	480,490	0.50
Clearing Members	771,101	0.80
Trusts	751	-
Sub Total	15,909,252	16.57
Total Public shareholding (B)	48,473,985	50.48
Total (A)+(B)	96,027,630	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)	96,027,630	-

BUSINESS DETAILS

Line of Business :

Providing Educational Services and Technology Equipments.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· State Bank of Patiala

· State Bank of Bikaner and Jaipur

· Icici Bank Limited

· Standard Chartered Bank

· Canara Bank

· State Bank of India

Facilities :

Secured Loan	As on 31.03.2011 [Rs. in Millions]	As on 31.03.2010 [Rs. in Millions]
From Banks
Cash Credit	238.800	573.340
Term Loan [Due within one year Rs.1727.570 million, (Previous year Rs.520.500 million)]	2969.870	1647.380
From Financial Institutions/Others
Term Loan	0.000	150.000
Total	3208.670	2370.720
Unsecured Loan
Other Loans (other than bank)
Zero Coupon Foreign Currency Convertible Bonds [US$ 80 Million Zero Coupon Foreign Currency Convertible Bonds In 2007, the Company had issued at par 5-year, Zero Coupon Foreign Currency Convertible Bonds (FCCB) at an exercise price of Rs.2,949.83 per share aggregating to US $ 80 million (Rs.3,237.600 million as on the date of issue) for financing overseas acquisition, capital expenditure and other expenditure as per RBI regulation. Out of the US $ 80 million Zero Coupon Foreign Currency Convertible Bonds (FCCB) aggregating to US $ 1.5 million have been converted into equity shares leading to increase in the capital base by 20,710 Equity Shares and all the proceeds out of US$ 80 million bonds have been utilized as per the terms of the offering of FCCB and as on 31st March, 2011 USD 78.5 million were outstanding.]	3505.030	3543.490
Total	3505.030	3543.490

Banking Relations :	--
Auditors :
Name :	Anupam Bansal and Company Chartered Accountants
Name :	Haribhakti and Company Chartered Accountants
Subsidiaries :	· Wheitstone Productions Private Limited Subsidiary · Edumatics Corporation Inc., USA Companies · Educomp Learning Private Limited · Educomp Infrastructure and School Management Limited · Educomp School Management Limited · Educomp Learning Hour Private Limited · Educomp Asia Pacific Pte Limited, Singapore · Ask N Learn Pte Limited, Singapore · Singapore Learning.com Pte Limited, Singapore · Vidya Mandir Classes Limited · Pave Education Pte Limited, Singapore · Wiz Learn Pte Limited, Singapore · Authorgen Technologies Limited · Shikhya Solutions Inc., USA · Educomp Software Limited · Educomp Infrastructure Services Private Limited · Educomp Professional Education Limited · Learning Internet Inc., U.S.A. · Educomp APAC Services Limited, BVI · Savvica Inc. Canada · Euro Kids International Limited · Eurokids India Limited · Educomp Child Care Private Limited · Educomp Online Supplemental Service Limited · Educomp Intelprop Ventures Pte. Limited, Singapore · Educomp Investment Management Limited · Falcate Builders Private Limited · Newzone Infrastructure Private Limited · Rockstrong Infratech Private Limited · Reverie Infratech Private Limited · Herold Infra Private Limited · Growzone Infrastructure Private Limited · Hidream Constructions Private Limited · Leading Edge Infratech Private Limited · Strotech Infrastruture Private Limited · Markus Infrastructure Private Limited · Orlando Builders Private Limited · Crosshome Developers Private Limited · Good Luck Structure Private Limited · Evergreen Realtech Private Limited · Zeta Buildcon Private Limited · Onega Infrastructure Private Limited · Grider Infratech Private Limited · Boston Realtech Private Limited · Modzex Infrastructure Private Limited · Virtual Buildtech Private Limited · Laservision Estates Private Limited · Euro School International Limited · Euro School Properties and Infrastructure Limited · Knowledge Vistas Limited
Associates :	· Greycells18 Media Limited · Gateforum Educational Services Private Limited
Joint Venture :	· Educomp Raffles Higher Education Limited · Educomp Higher Initiatives Pte Limited, Singapore

CAPITAL STRUCTURE

As on 31.03.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
125000000	Equity Shares	Rs.2/- each	Rs.250.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
95544396	Equity Shares	Rs.2/- each	Rs.191.090 Millions

NOTE:

1. Out of the above 5,27,65,560 equity shares of `2 each were allotted as bonus shares by capitalization of General Reserve.

2. Out of the above 1,08,259 equity shares of `2 each were allotted pursuant to a contract without payments being received in cash.

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		191.090	190.030	172.860
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		15875.610	11903.130	3922.550
4] (Accumulated Losses)		0.000	0.000	0.000
5] Employee Stock Option Outstanding		189.450	147.280	144.560
NETWORTH		16256.150	12240.440	4239.970
LOAN FUNDS
1] Secured Loans		3208.670	2370.720	1027.530
2] Unsecured Loans		3505.030	3543.490	4199.580
TOTAL BORROWING		6713.700	5914.210	5227.110
DEFERRED TAX LIABILITIES		0.000	10.290	449.340
Translation Difference Account (FCMITDA)		0.000	3.420	0.000
TOTAL		22969.850	18168.360	9916.420
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1280.550	1252.930	3954.200
Capital work-in-progress		36.040	75.110	244.960
INVESTMENT		13743.470	7866.480	2067.140
DEFERREX TAX ASSETS		0.240	0.000	0.000
Foreign Currency Monetary Items Translation Difference Account (FCMITDA)		0.000	0.000	264.580
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	361.430	291.200	288.380
	Sundry Debtors	5066.260	5018.030	2661.630
	Cash & Bank Balances	2946.340	6199.080	728.440
	Other Current Assets	43.770	177.830	28.520
	Loans & Advances	2314.730	490.940	1253.940
Total Current Assets		10732.530	12177.080	4960.910
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1229.220	699.190	266.170
	Other Current Liabilities	1252.560	956.480	1065.150
	Provisions	341.200	1547.570	244.050
Total Current Liabilities		2822.980	3203.240	1575.370
Net Current Assets		7909.550	8973.840	3385.540
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		22969.850	18168.360	9916.420

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2011	31.03.2010	31.03.2009
	SALES
		Income	10206.630	8322.210	5011.700
		Other Income	411.100	404.910	163.600
		TOTAL (A)	10617.730	8727.120	5175.300
Less	EXPENSES
		Cost of Goods Sold	2856.800	1627.630	1033.420
		Personal Expenses	1406.410	999.250	611.310
		Administrative Expenses	1041.780	1076.050	622.000
		Miscellaneous Expenses	0.000	0.000	0.390
		TOTAL (B)	5304.990	3702.930	2267.120
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		5312.740	5024.190	2908.180
Less	FINANCIAL EXPENSES (D)		540.940	370.590	137.390
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		4771.800	4653.600	2770.790
Less/ Add	DEPRECIATION/ AMORTISATION (F)		411.140	907.390	752.170
	PROFIT BEFORE TAX (E-F) (G)		4360.660	3746.210	2018.620
Less	TAX (H)		474.370	1499.610	688.860
	PROFIT AFTER TAX (G-H) (I)		3886.290	2246.600	1329.760
Add / Less	Prior Period Items		(2.390)	27.940	13.880
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		3852.300	2166.030	1032.390
Less	APPROPRIATIONS
		Interim Dividend	0.000	94.930	0.000
		Proposed Dividend Final	57.590	171.720	43.280
		Tax on Interim Dividend	0.000	16.130	0.000
		Tax on Proposed Dividend (Net)	0.290	27.740	7.360
		Transfer to General Reserve	388.870	221.870	131.590
	BALANCE CARRIED TO THE B/S		7294.230	3852.300	2166.040
	EARNINGS IN FOREIGN CURRENCY
		Revenue from Content Licensing	29.190	30.900	279.310
		Revenue from Services	8.270	3.200	0.000
		Interest	0.000	1.660	71.920
		Sponsorship	0.000	2.050	0.000
	TOTAL EARNINGS		37.460	37.810	351.230
	IMPORTS
		Capital Goods	0.000	71.960	61.080
		Trading Goods	483.150	103.620	10.460
	TOTAL IMPORTS		483.150	175.580	71.540
	Earnings Per Share (Rs.) Basic		40.74	23.99	15.23
	Earnings Per Share (Rs.) Diluted		37.76	22.52	14.86

QUARTERLY RESULTS

PARTICULARS	30.06.2011	30.09.2011	31.12.2011
Type	1^st Quarter	2^nd Quarter	3^rd Quarter
Net Sales	1856.790	2192.670	2633.950
Total Expenditure	1042.620	1591.930	1798.620
PBIDT (Excl OI)	814.170	600.740	835.330
Other Income	74.400	24.240	40.640
Operating Profit	888.570	624.980	875.970
Interest	202.890	175.170	219.140
PBDT	685.680	449.810	656.830
Depreciation	118.360	112.630	118.300
Profit Before Tax	567.320	337.180	538.530
Tax	131.880	76.100	128.540
Profit After Tax	435.440	261.080	409.990
Net Profit	435.440	261.080	409.990

KEY RATIOS

PARTICULARS		31.03.2011	31.03.2010	31.03.2009
PAT / Total Income	(%)	36.60	25.74	25.69
Net Profit Margin (PBT/Sales)	(%)	4.51	45.01	40.28
Return on Total Assets (PBT/Total Assets}	(%)	36.30	27.89	22.64
Return on Investment (ROI) (PBT/Networth)		0.27	0.31	0.48
Debt Equity Ratio (Total Liability/Networth)		0.59	0.74	1.60
Current Ratio (Current Asset/Current Liability)		3.80	3.80	3.15

LOCAL AGENCY FURTHER INFORMATION

Operating Results and Business:

In year 2010-11, Company’s performance was quite satisfactory and has shown a CAGR over a period of 3 years of 28.5% on consolidated basis and 26.8% on standalone basis.

On Standalone basis Company’s Total revenue increased to Rs.10617.730 million as on March 31, 2011 from Rs. 8727.120 million as on March 31, 2010, registering a growth of 21.66%.The profit before tax and after prior period items increased to Rs.4363.050. million (42.75% of Net Sales) as on March 31, 2011 from Rs.3718.270 million (44.68% of Net Sales) as on March 31, 2010.The profit after tax and prior period items increased to Rs.3888.680 million (38.10% of Net Sales) as on March 31, 2011 from Rs.2218.660 million (26.66 % of Net Sales) as on March 31, 2010.

On Consolidated basis Company’s Total revenue increased to Rs.13970.240 million as on March 31, 2011 from Rs.11650.150 million as on March 31, 2010, registering a growth of 19.91%.The profit before tax and after prior period items increased to Rs.4083.070 million (30.22% of Net Sales) as on March 31, 2011 from Rs.4391.730 million (42.25 % of Net Sales) as on March 31, 2010.The profit after tax, minority and pre-acquisition profits and prior period items increased to Rs.3366.720 million (24.92% of Net Sales) as on March 31, 2011 from Rs.2758.640 million (26.54 % of Net Sales) as on March 31, 2010.

The Company’s performance over the years has shown a consistent and upward trend. The Profit Before Depreciation, Tax and Interest and Misc. expenditure (operating profit) decreased by Rs.212.910 million to Rs.5903.000 million (42.25% of total revenues) as on March 31, 2011 from Rs.6115.910 million (52.50% of total revenues) as on March 31, 2010.

Segmental Performance (Standalone):

The EBIT margins in the School learning solutions (SLS) Segment of the Company for the year amounted to Rs. 5201.960 million or 52.08% of SLS revenues as on March 31, 2011 as compared to Rs.4517.740 million or 56.27% of SLS revenues as on March 31, 2010. The EBIT margins in the K-12 Segment of the Company for the year amounted to Rs.8.990 million or 34.37% of K-12 segment revenues as on March 31, 2011 as compared to Rs.6.200 million or 7.11% as on March 31, 2010. The EBIT margins in the Higher learning solutions (HLS) segment of the Company for the year amounted to Rs.48.260 million or 28.57% of HLS revenues as on March 31, 2011 as compared to Rs.55.930 million or 28% of professional development revenue as on March 31, 2010. The EBIT margins in Online and Retail segment of the Company for the year amounted to Rs.59.480 million as on March 31, 2011 as compared to Rs.5.020 million of Online and Retail revenues as on March 31, 2010.

Changes in Capital Structure:

Authorized Share Capital

Shareholders of the company on 26th July, 2011 by passing special resolution through postal ballot approved increase in Authorised Share Capital of the Company. Authorised Share Capital of the Company as on 4th August 2011 is Rs.300.000 millions. Divided into 15,00,00,000 equity shares of Rs.2/- each.

Issued and Paid-up Share Capital

During the year, the Company allotted 4,74,102 Equity Shares of face value of Rs.2/- each upon exercise of stock options by the eligible employees/ Directors of the Company/subsidiaries under Employee Stock Option Scheme 2006, 2007 and 2008. On 29th September 2010, Company in accordance with Chapter VII of SEBI (ICDR) Regulations, 2009, has allotted 55,643 Equity Shares on Preferential Basis. The said shares are under Lock in for a period of one year from the date of allotment. Post 31st March, 2011 and till 4th August 2011, Company has allotted 4,53,434 Equity Shares of Rs.2/- each under Employee Stock Option Scheme 2006 and on Preferential Basis in accordance with Chapter VII of SEBI (ICDR) Regulations, 2009 The paid up capital after taking the effect of changes as above, stood at Rs.191.995 millions as on 4th August 2011.

Foreign Currency Convertible Bonds

US$ 80 Million Zero Coupon Foreign Currency Convertible Bonds

In year 2007-08, the company had issued at par 5-year, Zero Coupon Foreign Currency Convertible Bonds (FCCB) at an exercise price of Rs.2949.83 per share aggregating to US $ 80 million (Rs.3237.600 million as on the date of issue) for financing overseas acquisition, capital expenditure and other expenditure as per RBI regulation. As per terms and condition of the Offering Circular issued by the company for FCCB, the Bond are convertible by holders of the Bonds (the “Bondholders”) into fully paid equity shares of the company with full voting rights with par value Rs.2 per share of the Company (the “Shares”) at any time on or after 4th September 2007 (or such earlier date as is notified to the Bondholders by the Company) and prior to the close of business on 19th July 2012, unless previously redeemed, converted or repurchased and cancelled. The Bonds may be redeemed in cash in whole, but not in part, at their Early Redemption Amount, at the option of the Company at any time on or after 25^th July 2009 and on and prior to 19th July 2012, subject to satisfaction of certain conditions. These bonds are redeemable at 141.087% of the principal amount on July 26, 2012 unless previously converted, redeemed or purchased and cancelled. As on date US$ 78.5 Million Zero Coupon Foreign Currency Convertible Bonds are outstanding. The Company intends raise fresh FCCB to utilize the proceeds to pay existing bondholders and will take necessary regulatory approvals, if applicable.

Awards, Achievements and Recognitions:

Franchise India presented the “Entrepreneur of the Year” award to Mr. Shantanu Prakash in the Indian Education Awards 2011, organized to recognize and acknowledge the initiatives and achievements of certain individuals and institutions that have contributed significantly towards the growth of the education sector in India in the recent times. The April 2011 issue of Dare Magazine chose Shantanu Prakash in its list of “50 Inspiring Entrepreneurs – 2011” because “Shantanu Prakash, founder of Educomp, is the man who is responsible for bringing the much-awaited change in the Indian education system”. In March 2011, Shantanu Prakash won the prestigious ET Now “Leap of Faith” Award in the category of Education. “Leap of Faith” Awards attempt to recognize the best and brightest of India’s young entrepreneurs; men and women who have stood against all odds and emerged winners.

Sangeeta Gulati, their Chief Financial Officer, was presented with the ICAI Women CFO 2010 Award by the prestigious Institute of Chartered Accountants of India for exceptional performance and achievements as a chief financial officer and recently bagged best CFO award in Sustained Wealth Creation in mid-Size Category hosted by Yes Bank and Business Today. Shantanu Prakash won the Dataquest “Pathbreaker of the Year Award” for 2010 in recognition of their business model, which aimed at making quality education available in schools across different parts of the country. 15 students trained by IndiaCan secured positions in the top 50 highest scores in the Chartered Accountancy Intermediate exam results in May 2010. In September 2010, they were conferred the e-India 2010 “Citizen’s Choice #1 Award for Teaching Learning Paradigm through ICT Intervention” in Digital Learning Magazine, in recognition of their achievement in ushering a whole new teaching learning paradigm in schools across India.

MANAGEMENT DISCUSSION AND ANALYSIS

Fiscal Year 2010-11 saw the company deliver an exceptional performance driven by strong growth in its offerings across the education value chain. The Smart Class business entered a new growth trajectory; quadrupling the number of school and classroom additions in the year. Being front-runners of innovation, the company continued to pioneer with new products and services in the Smart Class business further raising the barriers to entry for their competition. In line with the vision to provide ‘quality’ and ‘access to’ education, the company has increased both depth and range of presence across the Education Ecosystem - from pre-school, to K-12, to higher and vocational education and online and supplemental education specifically in the field of online and supplemental education.

The year saw the company achieve huge growth in the Smart Class Business with number of schools increasing from 3,077 to 6,538 with the addition of 3,461 schools. This strong growth was primarily driven by change of the business model from BOOT to Securitization led Sale. Smart Class is currently present in 600 districts and the company continues to increase its penetration in the tier-2 and tier 3 cities with the company having a presence within 5 kms from every school. The company, being the largest education company in the country, retained its leadership position on the back of flawless execution by their teams. During the year, Educomp retained its position as the No.1 player in the Educational Multimedia Content business, reaching out to 4.3 million students; No.1 player in the PPP model-based Edureach business, reaching out to 5.8 million students.

The year also saw the company continue its transition towards becoming a core education infrastructure company, involved in running pre-schools, providing services to high schools, colleges and vocational education centers. This is an important step in their evolution given the scenario of shortages in learning centers capacity in India across verticals which may continue for several decades. Educomp is building a uniquely differentiated and extremely high value infrastructure that offers perpetual annuity. In the K-12 segment the company provides educational infrastructure to various non profit schools. Currently 56 operational schools are using varied services

such as Content/IP services, Educational Infrastructure Services and Other Allied Services. The K-12 segment has also witnessed change in the business model from Capital Intensive to Joint Venture which is a capital light model.

With strong footholds in K-12 and higher education space, the year saw the company begin pushing rapid growth outside this space in all its business segments specifically vocational and supplemental segments. In order to consolidate its positioning in Supplemental space, a niche segment with huge addressable market space of $7 billion, Educomp has re–structured all its online initiatives including WiZiQ, Learnhub, Mathguru , VMC (Vidya Mandir Classes), Gateforum, EOL (Educomp Online), EduIgnite, Learning Hour and Studyplaces under one umbrella. With over 339 points of presence in the vocational training space and e-learning footprint of over 2.9 million global users, Educomp is one of the largest vocational and supplemental education players in the country.

Segment –Wise Performance:

During the year, the company witnessed continuous growth across the entire education value chain. The total consolidated income of the company increased by 30% YoY and net profit after taxes increased by 22% YoY driven on the back of strong growth across all segments including School Learning Solutions (up by 25%), K-12 schools (up by 36%), Higher Learning Solutions (147%) and Online, Supplemental and Global (up by 32%). The company continued its concerted efforts to increase the penetration levels and broad-base the growth trajectory of its flagship project – Smart Class, which saw its reach increase to 6,538 schools in FY11 from +3,000 schools in FY10. Significant investments in sales and marketing including addition of 160 sales personnel taking total sales force to 380 people and a successful media advertising campaign helped the company create unprecedented awareness and penetrate deeper in private school markets of tier I, tier II, tier III cities and towns across the country.

Also in a recent circular CBSE has advised all affiliated schools to setup at least 1 ICT enabled classroom for each grade from 1 through 12. Further, schools are encouraged to progressively increase the number of classrooms with digital content usage and move towards enabling every single classroom with such learning infrastructure. They believe that while CBSE has taken the lead to push digital content usage in schools, there is a strong likelihood that all other state (provincial) education boards will follow soon. This validates their thesis that Smart Class is poised to rapidly grow and eventually each classroom in India is target market opportunity for Smart Class.

In line with the company’s focus on continuous innovation, the company developed and unleashed Smart Class 3-D, a unique three dimensional digital content for schools, developed using the 3D stereoscopic technology. This is the first time in the history of Smart Class and probably in the history of classroom teaching across the world that the students would engage in learning using 3D glasses. Further, the company launched the next generation Smart Class in schools called Smart Class “Class Transformation System” (CTS) and fully integrated Smart Class “Digital Teaching System” (DTS). Smart Class “Class Transformation System” (CTS) is the next generation Smart Class consisting of features like hundreds of thousands of multiple choice questions, real life applications, topic synopsis, simulations, diagram makers and step-bystep illustrations apart from teaching ideas and strategies. Smart Class “Digital Teaching System” (DTS) is the world’s first fully integrated one switch digital interactive teaching system designed with real classroom challenges and Indian classroom conditions in mind. Its unique features consist of an integrated compact design where all the different hardware components have been seamlessly moulded into a single compact unit to enhance efficiency, convenience and durability along with reduction in the installation time.

Another fast growing and important growth engine for the company’s business is the K-12 segment comprising pre-school business through “Roots-to-Wings” and “EuroKids” and core and strategic high school business structured under the subsidiary Educomp Infrastructure and School Management. The company provides Educational Infrastructure Services, Content/IP services and Other Allied Services to various non profit organisations which run schools under multiple brands including Millennium schools, Takshila schools, Universal Academy, co-branded schools including Shriram schools, PSBB schools, and recently added Vasant Valley school facilitated by Universal Learn Today, an India Today group company. With the rapid opening up of the higher education space, the company is now gearing up to become a mainstream higher education player with the presence across all disciplines like engineering, management, design and commerce. A major stride in this space was taken with the company receiving the AICTE approval to launch Engineering and PGDM programs starting from the current academic year in its Greater Noida campus under the brand of JRE Group of Institutions.

The company’s higher learning solutions segment comprises two exciting joint ventures with world leading organizations - Raffles and Pearson in the areas of higher education and vocational education, respectively. In joint venture with Raffles Education Corporation, the company has 7 premium Raffles Millenium colleges operational in cities of Delhi, Bangalore, Chandigarh, Kolkata, Hyderabad, Ahmedabad and Chennai.

Moving onto the vocational part of the business, IndiaCan, the joint venture with Pearson Plc, has been one of the phenomenal growth stories within Educomp. Within a year and a half of operations, IndiaCan has expanded its reach to over 339 points of presence operational across the country covering 63,000 students. The JV includes unique programs like ETEN CA (VSAT technology based CA coaching program), PurpleLeap (programs for engineering and MBA students to make them workplace ready), and retail vocational centres (courses in English language training, sales, retail, IT and media).

To consolidate its position in rapidly growing supplemental education space, the company took several inorganic growth initiatives including acquisition of Vidya Mandir Classes Private Limited and Gateforum Educational Services Private Limited in test-prep space and joint venture with Zeebo India in wireless education space. The company acquired a strategic stake in Vidya Mandir Classes Private Limited and increased its presence from 3 to 6 centres catering to over 2,200 students during the year. The year saw the company take another leap forward with acquisition of majority stake in Gateforum, leading GATE (Graduate Aptitude Test in Engineering) prep company present in more than 40 cities across India through a mix of own and franchisee centres. Pioneering in the field of wireless education platform, the company entered into a JV with Zeebo Inc. to form Zeebo India for introducing 3-G connected education and entertainment system for Indian markets.

The company also has a unique portfolio of online products including Educomp Online, MathGuru, Wiziq, Learnhub, Eduignite, Studyplaces, Learning.com and AsknLearn catering to domestic as well as international markets and which will lead to significant growth of its supplemental business. Overall, during the year, the company consistently moved forward in building uniquely differentiated and extremely high value education infrastructure in a scenario where shortages are expected to continue for several decades. You would be happy to know that various business segments the company operates in provide huge opportunities for growth. While Smart Class is in an Exponential growth phase and the other segments namely K-12, Higher education, Vocational Education and Supplemental Education are in Investment/Take Off phase and would provide strong opportunities to expand and grow.

Industry Overview

Indian Education - One of the Largest Education Markets in the World

Indian Education Sector is one of the largest education markets (in terms of the potential number of students) in the world. The potential education market of India comprises of 464 million people (in the age group of 5-24 years in 2006), approximately 42% of the total population. India’s $60bn education market is a large and underpenetrated industry with significant upside for future growth. While India spends close to 4.1% of its GDP on education, literacy rates remain low at 62-63% of the adult population, compared to 90-95% in other emerging markets such as China and Brazil.

Underpenetrated and Inefficient Market driving shift towards Private Institutions

Indian Education is characterized by low enrolment rates and inefficient public spend. In the school going bracket, only 212 million of the eligible 360 million are in school. The gap is due to a combination of reasons including children not enrolled in schools, high dropout ratios at different levels and the demand supply gap. The poor quality of education in public institutes is driving the demand towards private education institutes. The number of private K-12 schools grew at doubledigit growth rates over the last decade. Also, the average enrolments per private schools stood at 288 as against 132 in public schools in 2009–10.

Favourable Demographics to drive growth

India is projected to have the world’s largest population under 20 years - 468 million in 2015 which is 40% higher than China’s population under 20 years at 318 million. Also, India is expected to grow at 8.5%-9.5% over 2011-12 and accelerate to a sustainable 9-10% by 2013-15 with improvement in demographics being the key growth factor. However favourable demographics need to be converted into a virtuous cycle of acceleration in growth and Education is one of the critical inputs to securing this demographic dividend.

Higher Education

The Indian higher education sector is one of the largest in the world with a total of 26,455 institutes. Government’s focus on higher education is of vital importance to India in reaping the demographic dividend and is reflected in 900% increase in the outlay on higher education in XIth Five Year Plan. The plan aims at aggressive expansion with the establishment of 30 new universities, 8 new IITs, 7 new IIMs, 20 new IIITs, 5 new Indian Institutes of Science, 2 Schools of Planning and Architecture, 10 NITs, 373 new degree colleges and 1000 new polytechnics. Driven by increasing government focus and rising private spend, higher education sector has witnessed high growth in enrolments at a CAGR of 10% to reach 16 million over FY06-10. However, not only is India’s gross enrolment ratio (GER) low at 12.4% but also growth in GER at 3% CAGR lags the growth registered by Brazil (13%) and China (19%). Government’s target to achieve 30% GER by 2020 would translate to an enrolment of 40 million representing an incremental increase of 24 million from the current enrolment and would require an additional ~33,000 institutions. Spends in the Indian Higher Education Sector are estimated to be `462 billion in 2010 with private sector accounting for almost 67% of the spends. Higher Education Spends are expected to grow at a CAGR of 18% till 2020 and provides a strong opportunity for growth.

Vocational Training

The private vocational education market is expected to grow at a strong CAGR of 25% from $1.5 billion in 2008 to $3.7 billion in 2012 on the back of India’s unique demography, providing it an advantageous position to be the source for bulk of skilled and semi-skilled workforce to the world in near future. The Indian government is also increasing its focus on vocational education and has set a target to train 500 million people by 2022. Private and foreign participation is being actively encouraged by the government both through private entities and PPPs. National Skill Development Council has been set up in partnership with the private sector and the Government has announced fiscal incentives including financial assistance, for private participation in running ITIs, with a target to add 1,000 new polytechnics in Govt/ PPP and the private sector by 2012. It has sanctioned 26 projects with a total funding of `6.58 billion in FY’11. These projects alone are expected to create a skilled workforce of 40 million people over the next 10 years. In the current year, skill training has so far been provided to 20,000 persons. Of these, 75% have found placements. India has only 5,100 ITIs and 1,745 polytechnics as compared to China, which has 500,000 VET institutes. There is strong growth potential as VET is at a nascent stage in India. Only 171 trades and skills programmes are available, as compared to the US where students can choose from 1,500 VET programmes.

Global Scenario

Malaysia

The government aims at restructuring and strengthening of education with the sum of RM 29.3 billion allocated for Education Ministry, RM 10.2 billion for Higher Education Ministry and RM 627 million for Human Resource Ministry. For the Ministry of Education, a sum of RM 6.4 billion is allocated for development expenditure to build and upgrade schools, hostels, facilities and equipment. The Government will increase pre-school enrolment rate to a targeted 72% by end 2011 through additional 1,700 classes, strengthen the curriculum as well as appoint 800 pre-school graduate teachers.

Singapore

Education spending is expected to go up by $1.0 billion to $47.1 billion with increased funding to Institutions of Higher Learning (IHLs), and for development projects such as the 3rd Regional Campus for the Institute of Technical Education (ITE) and infrastructure enhancements of primary schools.

China

In July 2010, China announced its outline of China’s National Plan for Medium and Long-term Education Reform and Development (2010-2020). It sets a series of concrete goals to be achieved by 2020 including universalizing preschool education, improving 9-year compulsory education, raising the senior high school GER to 90% and increasing the higher education GER to 40%.

USA

Highlights of the federal budget 2012 are as follows:

• Government continued its thrust on K-12 education with a budget allocation of $77.4 billion;

• Provide $1.4 billion for new competition, modelled on the successful Race to the Top initiative, to strengthen and reform early childhood education, improve district performance in elementary and secondary education and improve outcomes in higher education;

• Invest $26.8 billion, an increase of 6.9%, in a reformed Elementary and Secondary Education Act (ESEA) focused on raising standards, encouraging innovation, and rewarding success, while allowing states and districts more flexibility to invest resources in high impact areas;

• Strengthen the effectiveness of teachers with $975 million in competitive initiatives to recruit, prepare, reward, and retain great teachers; and

• Provide over 13 million students with low-cost loans to attend college and provide new rewards for colleges and universities that achieve outcomes for disadvantaged students.

Company Outlook and Strategy for 2010–11

The company expects robust growth across all its business segments on the back of organic and inorganic initiatives in the domestic as well global market. In the current fiscal year, the Company will further strengthen its position as the only company catering to the full “Education Value Chain” through further IP consolidation, innovation and investment in R and D and focus on its current breadth of products and services with major emphasis on SmartClass business, K-12 business, and Higher Education and Supplemental businesses. They believe change in its business model from BOOT to the “Securitization led Sale” basis, consistent culture of product innovation and investments in sales force would drive rapid growth in the Smart Class segment.

To augment its future growth, the Company has following strategies:

Increase the penetration of their Smart Class™ program - They seek to increase the penetration of their Smart Class™ program in what is still a large, underpenetrated market in India. They intend to focus on two areas:

• They intend to deepen their marketing efforts by increasing their existing sales force.. By increasing their sales force and broadening their penetration, they aim to be in the best possible position to exploit these new opportunities to further expand their Smart Class™ business; and

• They intend to introduce new products and consolidate and enhance their product offering by continual investments to develop new content and technological delivery platforms. For example, they recently launched their digital teaching system and class transformation system, and are also in the process of developing their content for provision in five regional languages.

Further investment in their higher learning solutions business - They intend to capitalize on the shortage of skill based higher education institutes in India by providing quality education through highly skilled faculty

Further investment in their online, supplementary and global solutions businesses - They have developed their online, supplementary and global solutions product

Portfolio to offer their content and solutions through new channels. They believe these markets provide a compelling growth opportunity due to growing penetration of internet/broadband in India, and the strong demand for high quality education technology solutions in developed and developing markets around the world. They also seek to develop products for the commercial market based on their institutional products, such as their EducompOnline.com product which offers complimentary content to the Smart Class™ modules to home users.

To efficiently allocate capital and resources amongst their various businesses and potential opportunities - They allocate capital to their most profitable and scalable businesses that generate strong returns. Further, when they introduce new products and services to the market, they invest heavily in product development, marketing, and customer financing in order to penetrate the market. As their businesses become established, they seek outside partners to provide financing to their customers so that they can accelerate their growth while freeing up their capital to fund other growth initiatives. One example of this is their shift from the build-ownoperate- transfer model to a securitization-led sale model in their Smart Class™ business, whereby third party financing sources provide capital to their customers to purchase their products. They will continue to allocate capital and resources to areas of their business which are either presently profitable or highly scalable so as to maximize future profitability.

Focus on developing and expanding existing businesses organically - The focus of their overall growth strategy is to up-sell and cross-sell their products and services across their various business segments in order to retain customers throughout the education lifecycle. Their aim is to decrease the necessity to market their various products and services on their own and leverage on the synergies of their broad service offerings. Since they service the entire education value-chain, they are able to provide services to students throughout their entire education lifecycle, starting at the pre-school level, through grade 12 and higher education and, where needed, through their vocational and supplementary education. To pursue strategic inorganic growth opportunities - They will continue to pursue selective strategic acquisitions, minority investments and joint venture opportunities to augment their capabilities, broaden their service offerings, enhance their cross-selling opportunities and increase their geographical presence. In relation to strategic acquisitions in particular, their strategy is to endeavor to retain the promoters of companies where they acquire an equity stake, with an expectation of these promoters continuing to promote these companies so as to prevent any drain on the resources of their own management team.

ICT (now Edureach)

Edureach business covers ICT Government and computer-aided learning projects and the provision of technology enabled 3D multimedia content to Government schools for students from Kindergarten to Grade 12. Under Edureach, the company partners with various state governments on the BOOT model to set up and maintain IT Infrastructure. It incurs an upfront expenditure and receives quarterly payments from the government for services rendered. The company has built a unique core competence in handling logistics to manage projects that are distributed across large and diverse geographies and also provides content to Government schools currently available in 10 regional languages. The scope of Edureach contract covers supply of IT infrastructure, multimedia curriculum content, supply of consumables, provision of full-time faculty or training of existing faculty, amongst others. However, the deliverables are dependent upon the tender specifications. In this model, capital expenditure for setting up IT Infrastructure is borne upfront by the company, while the Government normally chooses the option on BOOT (Build, Own, Operate and Transfer) basis. ICT program currently reaches 10,572 schools and 5.8 million students and the company continues to retain its number 1 ranking in this segment in India. During FY11, the company added 540 government schools under the ICT program in Maharashtra at a contract value of `679.3 million. It further bagged two multimedia content development projects from the Government of Gujarat and Assam covering 3,500 schools and 2,199 schools respectively for a total contract value of `68.1 million for installation and development of 2D, 3D-based multimedia content across schools of these two states and development of a web portal for learning management. They are glad to share that the company recently won the “Excellence Award” by the Institute of Economic Studies (IES) for its outstanding contribution towards developing the education sector in India through excellence in productivity, quality, innovation and management of holistic range of educational products and services. IES also awarded Soumya Kanti, President of Edureach with the “Udyog Rattan Award”. The company has strategically defocused its capital allocation to the ICT business due to lower margins and longer receivable cycle in the segment. The company would continue to enter into selective contracts only which offer good margins.

FIXED ASSETS:

• Land (Freehold)
• Building
• Leasehold Improvements
• Office Equipments
• Computers and Accessories
• Vehicles
• Software
• Knowledge Based Content

STANDALONE UNAUDITED FINANCIAL RESULT FOR THE QUARTER ENDED 31^ST DECEMBER 2011

Rs. In Millions

Particular	Quarter Ended		Nine Months Ended
	30.09.2011	31.12.2011	31.12.2011
(a) Net Sales / Income from operations	2192.672	2633.954	6683.410
(b) Other Operating Income	0.000	0.000	0.000
Total Income	2192.672	2633.954	6683.410
Expenditure
(Increase) / Decrease in stock in trade and work in progress	(86.636)	137.886	(194.588)
Purchase of traded goods	687.187	862.745	2253.097
Personnel expenses	422.700	503.762	1305.242
Depreciation	112.626	118.301	349.284
Administration and other expenses	194.535	294.226	689.896
Total	1330.412	1916.920	4402.931
Profit from operations before other income, interest and exceptional Items	862.260	717.034	2280.479
Other income	24.243	26.376	125.015
Profit before interest and exceptional Items	886.503	743.410	2405.494
Interest	175.169	219.136	597.190
Foreign exchange fluctuation	374.153	(14.259)	365.275
Profit after Interest but before Exceptional Items	337.181	538.533	1443.029
Exceptional Items	0.000	0.000	0.000
Profit (+)/Loss(-) from Oridinary Activities before tax	337.181	538.533	1443.029
Tax expense
Current tax including for earlier years (net)	84.697	137.475	354.808
MAT credit entitlement / reversal	0.000	0.000	0.000
Deferred tax	(8.600)	(8.933)	(18.295)
Net Profit (+)/Loss(-) from Ordinary Activities after tax	261.084	409.991	1106.516
Extraordinary items	0.000	0.000	0.000
Net Profit (+) / Loss (-) for the year period	261.084	409.991	1106.516
Paid up equity share capital (Face value of Rs.10/- per share)	192.019	192.055	192.055
Reserves excluding revaluation reserves as per balance sheet of previous accounting year	--	--	0.000
Earning per share (EPS)
(a) Basic and diluted EPS before Extraordinary items for the period, for the year to date and for the previous year (not to be annualised)	2.72	4.27	11.53
(a) Basic and diluted EPS before Extraordinary items for the period, for the year to date and for the previous year (not to be annualised)	2.70	3.46	11.45
Public shareholding
Number of shares	48455685	48473985	48473985
Percentage of shareholding	50.47	50.48	50.48
Promoters and Promoters group Shareholding-
a) Pledged /Encumbered
Number of shares	--	--	--
Percentage of shares (as a % of total shareholding of the promoter and promoter group)	--	--	--
Percentage of shares (as a % of total share capital of the company)	--	--	--
b) Non Encumbered
Number of shares	47553645	47553645	47553645
Percentage of shares (as a % of total shareholding of the promoter and promoter group)	100.00	100.00	100.00
Percentage of shares (as a % of total share capital of the company)	49.53	49.52	49.52

STANDALONE SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED

Rs. In Millions

Particular	Quarter Ended		Nine Months Ended
	30.09.2011	31.12.2011	31.12.2011
SEGMENT REVENUE
Higher Learning Solutions	27.945	35.818	105.586
School Learning Solutions	2153.323	2475.941	6428.912
K-12 Schools	7.004	0.000	13.873
Online Supplements and Global	4.400	122.195	135.039
Total Net Sales / Income From Operations	2192.672	2633.954	6683.410
SEGMENT RESULTS (PROFIT BEFORE INTEREST AND TAX FROM EACH SEGMENTS)
Higher Learning Solutions	5.529	11.993	37.240
School Learning Solutions	1017.499	906.914	2767.121
K-12 Schools	6.845	(0.137)	13.571
Online Supplements and Global	(3.339)	(2.300)	(13.169)
Total	1026.534	916.470	2804.763
Less: Interest	175.169	219.136	597.190
Other Unallocable Expenses	538.427	185.177	889.559
Unallocable Income	24.243	26.376	125.015
Total Profit Before Tax	337.181	538.533	1443.029
CAPITAL EMPLOYED
Segment Assets – Segment Liabilities
Higher Learning Solutions	(180.518)	(159.945)	(159.945)
School Learning Solutions	8717.236	9192.666	9192.666
K-12 Schools	6.750	6.019	6.019
Online Supplements and Global	16.639	6.062	6.062
Total	8560.107	9044.802	9044.802

NOTE:

1. The Un-audited Standalone Financial Results for the quarter ended on 31'' December 2011 have been reviewed by the Audit Committee and approved by the Board of Directors at their meeting held on 14' February 2012 and these have been subjected to Limited review by the Statutory auditors.

2. The Company has exercised option available to it under paragraph 46A of Accounting Standard 11 as amended by the Companies (Accounting Standards)(Second Amendment) Rules 201 1 in respect of accounting for fluctuations relating to "Long Term Foreign Currency Monetary Items". Accordingly during the quarter the Company has adjusted a sum of Rs. 394.283 millions to Foreign Currency Translation Difference Account on account of such differences arising for the nine months ended 3 1st December 201 1 on account of FCCB due in July 2012

3. The reported numbers for quarter and nine months ended 31st Dec 2010 include the impact of one-time business transfer revenue of Rs. 982.400 millions ( Q3FY1 l), Rs. 1402.400 millions ( 9MFY 11). On a like to like comparison basis, after eliminating the impact of one time business transfer revenue, the numbers will be as follows:

Rs. in Millions

	Quarter Ended			Nine Months Ended
	31.12.2011	31.12.2010	% Growth	31.12.2011	31.12.2010	% Growth
Total Revenue	2633.954	1781.757	48%	6683.410	5011.310	33%
EBIDTA	835.334	644.351	30%	2630.896	1765.933	49%
Profit After Tax	409.991	342.083	20%	1106.516	1057.279	5%

4. Company has launched multi-variants like Smart-Class 3D, Smart-Class, EduClass totake advantage of rising product demand of all sections of schools. Company in this quarter has signed more than 10,000 classrooms in a quarter (43% up on YOY basis), highest ever since the company has launched the product.

5. During the quarter, Company has allotted 18,300 equity shares of face value of Rs. 21- each pursuant to exercise of Stock options under ESOP Scheme 2006. Paid up capital of company as on date is Rs. 192.055 millions.

6. Status of Investor complaints received by the Company is as follows:

Particular	Pending as on 01.10.2011	Received during the quarter	Disposed during the quarter	Pending as on 31.12.2011
No of Complaints	0	22	19	3

7. The Segment Report is prepared in accordance with the Accounting Standard-17 Segment Reporting" as notified in the Companies (Accounting Standards) Rules 2006.

8. The basic and diluted earning per share has been calculated in accordance with the AS-20 earning per share as notified in the companies (accounting standard) rules 2006.

9. Previous year/period figures have been regrouped and rearranged, wherever considered necessary for comparison purpose.

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.50.91
UK Pound	1	Rs.80.77
Euro	1	Rs.67.40

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	7
--RESERVES	1~10	9
--CREDIT LINES	1~10	9
--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	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		73

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.