MIRA INFORM REPORT

Report Date :

22.02.2013

IDENTIFICATION DETAILS

Name :	BIRLA ERICSSON OPTICAL Limited
Registered Office :	Udyog Vihar, P O Chorhata, Rewa–486006, Madhya Pradesh
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	30.06.1992
Com. Reg. No.:	10-007190
Paid-up Capital :	Rs.300.000 millions
CIN No.: [Company Identification No.]	L31300MP1992PLC007190
TAN No.: [Tax Deduction & Collection Account No.]	JBPB01003C
Legal Form :	A Public Limited Liability Company. The Company's Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturer of Telecom Cables Including Optical Fibre Cables, Jelly Filled Telecom Cables and other items like Insulated Cables, Cords and Flexes.
No. of Employees :	168 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

B (30)

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

Maximum Credit Limit :	USD 2200000
Status :	Moderate
Payment Behaviour :	Slow But Correct
Litigation :	Clear
Listing :	Yes
Banker’s Note :	--
Comments :	Subject is an established company having a moderate track record. There appear some losses recorded by the company. However, trade relations are reported to be fair. Business is active. Payments are reported to be slow but correct. The company can be considered for business with some caution.

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 – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

EXTERNAL AGENCY RATING

Rating Agency Name	ICRA
Rating	BB (Fund Based Rating)
Rating Explanation	Having moderate risk of default regarding timely servicing of financial obligation.
Date	February 2013

LOCATIONS

Registered/ Head Office / Factory :	Udyog Vihar, P O Chorhata, Rewa – 486 006, Madhya Pradesh, India
Tel. No.:	91-7662-500580/ 400580/ 242214 – 16 / 240613/ 254318-19/ 220312- 19
Fax No.:	91-7662-400680/ 240614/ 242239/ 254322/ 280680
E-Mail :	headoffice@birlaericsson.com investorservies@birlacables.com beolrewa@bom6.vsnl.net.in
Website :	http://www.birlacables.com
Marketing Office	Located At: · Mumbai · New Delhi · Goa · Bengaluru · Kolkata

DIRECTORS

AS ON 31.03.2012

Name :	Mr. Mats O. Hansson [Alternate Mr. S. K. Gada]
Designation :	Director
Name :	Mr. D. R. Bansal
Designation :	Managing Director
Name :	Mr. Arun Kishore
Designation :	Director
Name :	Mr. Magnus Kreuger [Alternate Mr. Dinesh Chanda]
Designation :	Director
Name :	Mr. R. C. Tapuriah
Designation :	Director
Name :	Mr. Harsh V. Lodha
Designation :	Chairman
Name :	Mr. K. Raghuraman
Designation :	Director
Name :	Dr. Aravind Srinivasan
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Y. S. Lodha
Designation :	President (Up to 08.05.2012)
Name :	Mr. R Sridharan
Designation :	Manager and Chief Executive Officer (From 04.05.2012)
AUDIT COMMITTEE
Name :	Mr. R. C. Tapuriah
Designation :	Director
Name :	Dr. Aravind Srinivasan
Designation :	Director
Name :	Mr. Arun Kishore
Designation :	Director
Name :	Mr. K. Raghuraman
Designation :	Director

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.12.2012

Category of Shareholder	No. of Shares	% of No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	72241	0.24
Bodies Corporate	10583442	35.28
Any Others (Specify)	1000260	3.33
Societies	1000260	3.33
Sub Total	11655943	38.85
(2) Foreign
Bodies Corporate	8250000	27.50
Sub Total	8250000	27.50
Total shareholding of Promoter and Promoter Group (A)	19905943	66.35
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	500	0.00
Financial Institutions / Banks	2620	0.01
Sub Total	3120	0.01
(2) Non-Institutions
Bodies Corporate	1172908	3.91
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	7209402	24.03
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	1432169	4.77
Any Others (Specify)	276458	0.92
Societies	91240	0.30
Non Resident Indians	102399	0.34
Directors & their Relatives & Friends	7100	0.02
Clearing Members	75719	0.25
Sub Total	10090937	33.64
Total Public shareholding (B)	10094057	33.65
Total (A)+(B)	30000000	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	0	0
(1) Promoter and Promoter Group	0	0
(2) Public	0	0
Sub Total	0	0
Total (A)+(B)+(C)	30000000	0

BUSINESS DETAILS

Line of Business :

Manufacturer of Telecom Cables Including Optical Fibre Cables, Jelly Filled Telecom Cables and other items like Insulated Cables, Cords and Flexes.

Products :

Product Description	ITC Code
Optical Fibre Cables	854470.90 and 900110.00
Jelly Filled Telephone Cables	854449.90
Insulated Cables Cords and Flexes	854449.30

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Licensed Capacity*	Installed Capacity	Actual Production
Optical Fibre Cables (Metal Free/Armoured/Aerial)	KMs	48000	39984	7899
Jelly Filled Telephone Cables	CKMs	4325000	4027000	139102
Insulated Cables, Cords and Flexes	Mtrs.	50000000	50000000	9649151
Automotive wires and Cables	KMs	200000	30000	4928
Co-axial Cables	KMs	10000	1000	631

* Capacity for which Memorandum filed pursuant to Scheme of delicensing vide Notification No. 477(E) dated 25th July, 1991, as amended.

GENERAL INFORMATION

No. of Employees :

168 (Approximately)

Bankers :

· State Bank of India

Facilities :

Secured Loan	Rs. In Millions 31.03.2012	Rs. In Millions 31.03.2011
Buyer Credit	17.778	25.955
Cash Credit Facilities	1.190	13.668
Buyer’s Credit	126.949	43.637
Export Packing Credit	26.010	14.955
TOTAL	171.927	98.215
Unsecured Loan	Rs. In Millions 31.03.2012	Rs. In Millions 31.03.2011
Sales tax loans (Interest free)	1.265	124.090
Less: Current maturities of long-term borrowings at the year end	(11.852)	(133.207)
Other short term loans / intercorporate Deposits
From bodies corporate (repayable on demand)	120.000	0.000
TOTAL	109.413	(9.117)
NOTES: (a) The buyer’s credit is secured by way of hypothecation of stock of Inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, bills, invoices, documents, contracts, etc., both present and future, and are further secured by way of hypothecation of moveable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of immovable properties of the Company. The buyer’s credit is repayable in six half yearly installments commencing from 6th December, 2010 and carries interest @ 2.75% (rate as on the reporting date). (b) Sales tax loans are as per scheme of State Government and for administration of these loans, Madhya Pradesh State Industrial Development Corporation Limited (MPSIDC Limited) has been specified by the State Government as the Implementing Agency. As per the governing scheme for conversion of deferred sales tax into loan, the final sales tax loan liability subsists up to a period of ten years, commencing from the expiry of each financial year covered by the period of eligibility and is payable thereafter within 30 days in one installment subject to compliance with the terms and conditions as specified in the scheme. (c) Working capital loans/trade credits from banks being working capital credit facilities, sanctioned by a bank are generally renewable within twelve months from the date of sanction or immediately previous renewal, unless otherwise stated. The lender bank has a right to cancel the credit limits(either fully or partially) and, interalia, demand repayment in case of non-compliance of terms and conditions of sanctions or deterioration in the loan account in any manner whatsoever, etc. (d) Working capital loans (both fund and non-fund based) are secured by way of hypothecation of stock of inventories, cash and other current assets, book debts, outstanding moneys, receivables, claims, bills, invoices, documents, contracts, etc., both present and future, and are further secured by way of hypothecation of moveable fixed assets, both present and future, and first charge created by way of joint mortgage by deposit of title deeds of immovable properties of the Company. As a collateral security, working capital loans are also backed by a cross corporate guarantee of Vindhya Telelinks Limited, a joint venture.

Banking Relations :	--
Auditors :
Name :	V. Sankar Aiyar and Company Chartered Accountants
Address :	New Delhi
Solicitors :
Name :	NMS and Company
Address :	New Delhi, India
Venturers in respect of which the Company is a joint venture:	· Universal Cables Limited (UCL) · Vindhya Telelinks Limited (VTL) · Ericsson Cables AB, Sweden (ECA)

CAPITAL STRUCTURE

AS ON 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
42500000	Equity Shares	Rs.10/- each	Rs. 425.000 Millions
7500000	Preference Shares	Rs.10/- each	Rs. 75.000 Millions
	TOTAL		Rs. 500.000 Millions

Issued, Subscribed & Paid-up Capital :

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

NOTES:

(a) There is no variation or change in the issued, subscribed and fully paid-up equity share capital structure during the year. Therefore, no separate disclosure of reconciliation of the number of equity share outstanding as at the beginning and at the end of the year is required.

(b) The Company has issued only one class of shares referred to as equity shares having nominal value of Rs.10/-. The holders of equity shares are entitled to one vote per share.

(c) Shareholders holding more than 5%shares based on legal ownership in the subscribed share capital of the Company is set out below:

	AS AT MARCH 31, 2012
Name Of The Shareholder	No. Of shares	% Held
Ericsson Cables AB, Sweden	8250000	27.50
Vindhya Telelinks Limited	4000100	13.13
Universal Cables Limited	3900100	13.00

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		300.000	300.000	300.000
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		265.562	313.801	357.561
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		565.562	613.801	657.561
LOAN FUNDS
1] Secured Loans		171.927	98.215	55.563
2] Unsecured Loans		109.413	(9.117)	185.292
TOTAL BORROWING		281.340	89.098	240.855
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		846.902	702.899	898.416
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		322.606	352.514	321.063
Capital work-in-progress		1.914	0.628	7.643
INVESTMENT		140.619	140.619	140.619
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	175.555	147.747	159.337
	Sundry Debtors	275.966	162.245	234.435
	Cash & Bank Balances	58.658	55.565	91.236
	Other Current Assets	2.789	1.910	2.703
	Loans & Advances	74.856	68.246	64.594
Total Current Assets		587.824	435.713	552.305
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	152.352	52.100	85.039
	Other Current Liabilities	31.994	154.668	22.795
	Provisions	21.715	19.807	15.380
Total Current Liabilities		206.061	226.575	123.214
Net Current Assets		381.763	209.138	429.091
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		846.902	702.899	898.416

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	751.031	677.863	986.655
		Other Income	22.628	23.339	18.229
		TOTAL (A)	773.659	701.202	1004.884
Less	EXPENSES
		Raw Material Consumed	574.178	504.656	691.051
		Purchase of Stock-in-trade	13.383	23.879	60.637
		Employees Benefits Expenses	73.884	69.213	62.844
		Operating and other Expenses	90.572	89.790	107.181
		Increase or decrease in stock	(16.807)	0.345	10.025
		TOTAL (B)	735.210	687.883	931.738
Less	PROFIT / (LOSS) BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		38.449	13.319	73.146
Less	FINANCIAL EXPENSES (D)		49.032	20.639	14.487
	PROFIT / (LOSS) BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(10.583)	(7.320)	58.659
Less/ Add	DEPRECIATION/ AMORTISATION (F)		37.977	36.472	35.876
	PROFIT / (LOSS) BEFORE TAX (E-F) (G)		(48.560)	(43.792)	22.783
Less	TAX (H)		(0.321)	(0.032)	(0.037)
	PROFIT / (LOSS) AFTER TAX (G-H) (I)		(48.239)	(43.760)	22.820
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		NA	NA	(25.304)
	BALANCE CARRIED TO THE B/S		NA	NA	(2.484)
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	140.987	222.075	229.751
		Indian Rupees	19.857	41.486	0.000
	TOTAL EARNINGS		160.844	263.561	229.751
	IMPORTS
		Raw Materials	277.885	239.591	175.995
		Stores & Spares	1.427	0.946	2.898
		Capital Goods	6.287	54.264	15.188
	TOTAL IMPORTS		285.599	294.801	194.081
	Earnings / (Loss) Per Share (Rs.)		(1.61)	(1.46)	0.76

QUARTERLY RESULTS

PARTICULARS	30.06.2012	30.09.2012	31.12.2012
	1^st Quarter	2^nd Quarter	3^rd Quarter
Net Sales	216.050	364.930	287.400
Total Expenditure	214.610	307.130	265.200
PBIDT (Excl OI)	1.440	57.800	22.200
Other Income	14.740	5.070	8.500
Operating Profit	16.180	62.870	30.600
Interest	1.140	13.040	13.800
Exceptional Items	0.000	0.000	0.000
PBDT	15.040	49.830	16.800
Depreciation	9.290	9.170	9.000
Profit Before Tax	5.750	40.660	7.800
Tax	0.000	0.000	0.000
Provisions and contingencies	0.000	0.000	0.000
Profit After Tax	5.750	40.660	7.800
Extraordinary Items	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000
Net Profit	5.750	40.660	7.800

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	(6.24)	(6.24)	2.27
Net Profit Margin (PBT/Sales)	(%)	(6.47)	(6.46)	2.31
Return on Total Assets (PBT/Total Assets}	(%)	(5.33)	(5.56)	2.61
Return on Investment (ROI) (PBT/Networth)		(0.09)	(0.07)	0.03
Debt Equity Ratio (Total Debts/Networth)		0.50	0.15	0.37
Current Ratio (Current Asset/Current Liability)		2.85	1.92	4.48

LOCAL AGENCY FURTHER INFORMATION

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

GENERAL AND CORPORATE MATTERS

During the year, the Company's revenue from operations was slightly higher than the previous year by 13%. This is appreciable given the fact that telecommunications sector in India has been facing fair amount of uncertainty in the recent past in the regulatory environment based on judicial pronouncements, which have severely impacted cash flows and slowed the infrastructure investments of the telecom operators. As a consequence telecommunications cables manufacturers have had to struggle for business with lower volumes and longer credit periods. Despite this major but temporary aberration leading to reduced telecommunications cables consumption during the year, pent-up demand is expected to remain strong. However the magnitude and timing will depend upon clarity on major policy issues and consequent resource allocations by the Government and the telecom operators.

The gross revenue from operations for the year increased to Rs.811.227 Millions as compared to Rs.719.301 Millions during the previous year mainly due to increased competitive abilities of the Company driven by a paradigm shift in approach to focus on overseas markets while maintaining its domestic market share. However, inspite of increase in the revenue, the Company suffered a gross loss of Rs.10.583 Millions for the year as against the gross loss of Rs.7.320 Millions during the previous year mainly on higher finance costs and losses on account of foreign exchange rate fluctuation. Emphasis on control on the material consumption and monitoring of factory and other overheads have restricted the losses to a considerable extent. The Company has been consistently working on reducing the costs at all levels and on improving the margins despite overall sluggishness in the sector in which it operates.

The Company still awaits the final outcome of a tender floated by BSNL for supply and laying of a dedicated nationwide alternate communication network for Defence forces in which the Company had emerged as the lowest bidder along with a consortium partner for one of the packages.

Having realized that increased broadband access and adoption are key goals for the inclusive growth, the Government of India has formed a special purpose vehicle, "Rajiv Gandhi National Information Super-Highway", for setting up a National Fibre Optic Network (NFON) and has approved an investment of Rs.200000.000 Millions towards broadband connectivity to Panchayats, e-governance, online banking and health service initiatives. This ambitious plan of investment in broadband infrastructure, interalia, consists of laying nationwide OFC network to bring more than one million villages into the high speed internet which is anticipated to generate sustainable demand for optical fibre cables in the near term. In addition, the robust increase in mobile broadband traffic augers well for telecommunications cables industry as the exponential bandwidth growth will drive the need for backhaul capacity expansion which is increasingly optical fibre based. The company is well poised to seize these opportunities having equipped itself with the state of art technology and dedicated marketing and technical teams.

In view of fast changing trends in the industry, the Company continues to accord priority for development of new products as per evolving industry standards by cannibalizing its internal systems and business processes using the best-in-class available technologies which will further strengthen its competitive abilities in domestic and overseas market places and improve upon operational performance.

INDUSTRIAL RELATIONS

Industrial relations remained cordial throughout the year. The Directors recognize and appreciate the sincere and hard work, loyalty, dedicated efforts and contribution of all the employees that ensured sustained improvement in operational efficiencies of the Company in most difficult and challenging business environment during the year.

The Company continues to accord a very high priority to both industrial safety and environmental protection and these are ongoing processes at the Company's plant and facilities.

MANAGEMENT DISCUSSION AND ANALYSIS

INDUSTRY STRUCTURE AND DEVELOPMENTS

The Company's operations are predominantly classified into Wires and Cables comprising primarily Telecommunication Cables and other types of Wires and Cables.

Optical Fibre Cable (OFC) is mainly used in long distance networks and generally forms the backbone of all telecom networks. The overall trend for the technologies is focused on data and converged services, and making the solutions more robust.

OFC is the noticeable preference of service providers for new network rollouts and upgrades of existing ones to meet growing traffic demands, with its virtual limitless capacity to transfer bandwidth. The deployment of fourth-generation wireless networks in India is likely to propel growth of OFC in the Indian subcontinent. Hence, the next level of demand for bandwidth for data and video can only be met by fiber.

The Indian market for copper telecom cable viz. Jelly Filled Telephone Cable (JFTC) has been passing through a very difficult time in the last few years. The number of fixed line telephone subscribers in India is witnessing stagnant or declining trend whereas wireless services continue to grow at a phenomenal pace, presently, the market for JFTC is primarily driven by repair and maintenance activities of the existing telecommunication networks.

There is no material change in the industry structure as was reported last year.

OVERALL REVIEW

BUSINESS REVIEW AND OUTLOOK

At the end of the financial year 2011-12, the government has ensured their interest to settle the controversies surrounding the telecom sector. The 2G spectrum issue has taken its toll on the industry. Its credibility and morale are low, FDI flows into the sector have been impacted by the current policy and regulatory ambiguity, and the Indian telecom market, which was witnessing monthly subscriber additions of 20 million in early 2011, has been drawing less than 8 million users in the past few months.

At a recent telecom event organized by FICCI and DoT, the Prime Minister and the telecom minister highlighted the role of the National Telecom Policy 2011 and assured telecom operators that the government was aware of their concerns and was committed to formulate forward-looking policies to sustain sector growth. NTP 2011 is expected to be implemented in early 2012. The year 2012, the industry hopes, will bring greater policy clarity and see the emergence of business opportunities to the entire telecom sector including the telecom cable industry.

TELECOMMUNICATION CABLES

(A) Optical Fibre Cables (OFC)

The increase in revenue from OFC business at Rs.510.574 Millions as compared to Rs.288.903 Millions in the previous year is mainly due to demand from certain key private sector customers and a spurt in exports of Optical Fibre Cables to Middle East, European countries, African countries etc. The Company has been constantly looking for export opportunities in order to cope with lower demand in domestic market which is evident from the Company achieving export sales of Rs.141.078 Millions in the financial year 2011-12, an improvement of 56% compared to the corresponding previous year.

Despite the increase in demand of OFC, there may not be any significant improvement in the domestic OFC prices as the bargaining power of buyers and the existence of overcapacity will constrain the ability of domestic players to resort to any considerable price hikes in the near future.

Keeping this in view, the Company has taken a strategic decision to participate in turnkey projects which eventually will lead to additional revenue opportunities by cross-marketing its business to the customers besides helping in retention of the customers under the changed business environment.

The draft National Telecom Policy-2011 will open huge opportunity in the deployment, operations and maintenance of optical fiber infrastructure which is expected to increase the OFC requirement.

(B) JELLY FILLED TELEPHONE CABLES (JFTC)

The Company's domestic sales turnover on account of JFTC increased from Rs.39.444 Millions in the previous year to Rs.42.998 Millions during the year, mainly due to increase in demand from private operators. However, less off take from overseas customers has reduced the export sales of JFTC/Specialty Cables from Rs.144.671 Millions to Rs.4.860 Millions in the financial year. This has brought down the performance of JFTC Cables to a great extent.

As a strategy, the Company is concentrating more on export markets, for which the necessary platform and credentials have already been established in the last few years and this financial year's poor performance in export sales will be made up in the next year. The JFTC business has been undergoing the shift to Specialty Cables for wireless and broadband applications that has been predicted for in last few years

OTHER WIRES AND CABLES

The Company's sale of Automobile Wires reduced from Rs.24.122 Millions to Rs.4.005 Millions due to reduced off take from multinational customers.

FINANCIAL REVIEW

(a) The revenue from operations (gross) increased by 13% to Rs.811.227 Millions as compared to Rs.719.301 Millions in previous year primarily due to substantial increase in sales of OFC both in value and volume terms.

(b) The raw material consumption and other charges were higher as compared to previous year due to higher production level.

(c) The other borrowing cost increased from Rs.6.927 Millions in previous year to Rs.11.285 Millions mainly due to higher utilization of working capital limits during the year. Also, the interest cost has increased to Rs.23.843 Millions (previous year Rs.13.712 Millions) due to extended credit to private sector customers as per evolving industry norms.

(d) Despite increase in the operations revenue from Rs. 719.301 Millions to Rs.811.227 Millions in the financial year, the Company has suffered a gross loss (loss before depreciation) of Rs.10.583 Millions as against the gross loss (loss before depreciation) of Rs.7.320 Millions in the previous year, mainly due to exchange losses, higher financial costs and interest to banks and others.

(e) There was no change in the capital structure during the year. However, the decrease in Reserves and Surplus of Rs.48.239 Millions is because of the net loss in the current year.

(f) The additions to the fixed assets of Rs.8.303 Millions during the year mainly comprise of Triple Wavelength OTDR, Ring Marking Attachment for Colouring Line, FRP/Steel Wire Pay-off, EPABX System (IP Based), etc.

(g) For detailed information on the financial performance with respect to operational performance, a reference may please be made to the financial statements.

FINANCIAL

Financial risks would include, interalia, low capacity utilization, unremunerative prices, highly concentrated customers base, shorter delivery schedule and liquidated damages, foreign exchange exposure and related exchange rates variation, commodity price including adverse movements in prices of raw-materials, warranty and security, current or future litigations, working capital management and interest rate, contingent liabilities, etc. In addition, the credit risks could increase, if the financial condition of Company's customers decline. The Company regularly identifies and monitors the financial risks as well as potential business threats and develops appropriate risk mitigation plans. The Company's crisis management capability is also reasonably honed to protect its reputation with its stakeholders.

FIXED ASSETS

· Leasehold Land

· Building

· Plant and Machinery

· Furniture and Fixtures

· Office Equipment

· Vehicles

· Computer Software

STATEMENT OF UNAUDITED FINANCIAL RESULTS FOR THE QUARTER AND HALF YEAR ENDED 30TH SEPTEMBER, 2012

(Rs. in millions)

Sr. No.	Particular	Quarter Ended		Year Ended
		30.09.2012	30.06.2012	30.09.2012
		(Unaudited)
1.	Net Sales/Income from Operations	364.932	216.048	580.980
2.	Expenditure
	Cost of Material Consumed	233.861	178.534	412.395
	Purchase of Stock In Trade	11.181	0.552	11.733
	Change in Inventories of Finished Goods, Work-In-Progress and Stock In Trade	8.521	(31.717)	(23.196)
	Employee Benefits Expenses	21.280	19.473	40.753
	Depreciation and Amortization Expenses	9.171	9.291	18.462
	Other Expenses	32.290	35.415	67.705
	Total	316.304	211.548	527.852
3.	Profit From Operations before Other Income, Interest and Exceptional Items (1-2)	48.628	4.500	53.128
4.	Other Income	5.069	14.737	19.806
5.	Profit Before Interest and Exceptional Items (3+4)	53.697	19.237	72.934
6.	Interest	13.045	13.484	26.529
7.	Profit After Interest but before Exceptional Items (5-6)	40.652	5.753	46.405
8.	Exceptional Items	--	--	--
9.	Profit from Ordinary Activities before Tax (7+8)	40.652	5.753	46.405
10.	Tax Expense	--	--	--
11.	Net Profit from Ordinary Activities after Tax (9-10)	40.652	5.753	46.405
12.	Extraordinary Item (net of expense)	--	--	--
13.	Net Profit for the period (11-12)	40.652	5.753	46.405
14.	Paid-up Equity Share Capital (Face Value of Rs.10/- Each)	300.000	300.000	300.000
15.	Reserves Excluding Revaluation Reserve	--	--	--
16.	Basic and Diluted Earning Per Share (EPS) (Rs.)-Not Annualised	1.36	0.19	1.55
17.	Public Shareholding
	-Number of Shares	10094057	10094057	10094057
	- Percentage of Shareholding	33.65	33.65	33.65
18.	Promoters and Promoter Group Shareholding
	a) Pledged/Encumbered
	- Number of Shares	1250000	1250000	1250000
	- Percentage of Shares (as a % of the Total Shareholding of promoter and promoter group)	6.28	6.28	6.28
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	4.17	4.17	4.17
	b) Non Encumbered
	- Number of Shares	18655943	18655943	18655943
	- Percentage of Shares (as a % of the Total Shareholding of Promoter and Promoter Group)	93.72	93.72	93.72
	- Percentage of Shares (as a % of the Total Share Capital of the Company)	62.18	62.18	62.18

Particulars	Quarter Ended 30.09.2012
Pending at the beginning of the quarter	Nil
Received during the quarter	1
Disposed of during the quarter	1
Remaining unresolved at the end of the quarter	Nil

STATEMENT OF ASSETS AND LIABILITIES

PARTICULARS	30.09.2012 Unaudited
Equity and liabilities
Shareholders' fund
Share capital	300.000
Reserve & surplus	311.967
Sub-total - Shareholders' funds	611.967
Non - current liabilities
Long term borrowings	1.265
Long term provisions	10.646
Sub-total - Non-current liabilities
Current liabilities
Short term borrowings	380.877
Trade payables	297.434
Other current liabilities	39.345
Short term provisions	8.184
Sub-total - Current liabilities	725.840
Total - Equity & Liabilities	1349.718
Assets
Non-current assets
Fixed assets	308.519
Non-current investment	140.619
Long term loans & advances	4.753
Other non-current assets	0.012
Sub-total - Non-current Assets	453.903
Current assets
Inventories	287.768
Trade receivables	346.390
Cash & bank balances	55.857
Short term loans & advances	200.867
Other current assets	4.933
Sub-total - Current Assets	895.815
Total – Assets	1349.718

NOTES

1. The Company has only one reportable primary business segment. Hence, no separate segment wise information of revenue, results and capital employed is given.

2. Minimum Alternate Tax (MAT) under Section 115JB of the Income Tax Act, 1961, if any, will be ascertained and provided at the year end.

3. The above unaudited financial results duly reviewed by the Audit Committee have been approved by the Board of Directors in its meeting held on 31st October, 2012 and subjected to a Limited Review by the statutory auditors of the Company.

4. Figures of previous year/periods have been regrouped/recast, wherever considered necessary.

WEBSITE DETAILS

MANAGEMENT

Mr. Harsh V Lodha (Chairman)

An eminent Chartered Accountant and a Partner of M/s Lodha and Company, Chartered Accountants. He has served various committees and working groups set up by Federation of Indian Chambers of Commerce and Industry (FICCI); Indian Chambers of Commerce, Kolkata; Department of Company Affairs, Government of India; Reserve Bank of India; apart from being a member of the Accounting Standards Board set up by the Institute of Chartered Accountants of India and alternate member of the National Advisory Committee on Accounting Standards set up by Government of India. He has handled professional advisory assignments in various fields and has been involved in various Trusts, Educational and Cultural Institutions.

Mr. Magnus Kreuger (Director)

Company Executive with rich business and Management experience

Mr. Mats Olof Hansson (Director)

Company Executive with rich business and Management experience

Mr. R. C. Tapuriah (Director)

Industrialist with wide experience in Business and Industry

Dr. Aravind Srinivasan (Director)

Administrator of a renowned eye hospital in India and MBA from University of Michigan Business School having varied experience in the field of finance and human resource development

Mr. Arun Kishore (Director)

A Practising Chartered Accountant with more than four decades of professional experience in the various gamuts of audit and other related areas. 

Mr. K. Raghuraman (Director)

Chartered Accountant with more than three decades of professional experience in various Banks and holding very senior position including executive directorship of Punjab National Bank. He had held the position of Chairman of India Cooperation Committee of Master Card International & was also the Honorary Secretary of "Banks' Sports Board" of the Indian Banks' Association apart from being the member of various industry level Committees of IBA. He had participated in various International Conferences/Seminars/Investors' Meet in Australia, China, Bangkok, USA, Canada, etc.

Mr. D. R. Bansal (Director)

Company Executive having rich and varied experience of over 46 years in various facets of cable and other Industries including in the field of administration, production and marketing. His strength also includes strong relationship management, international alliances/tie ups and business development. He is actively associated with various cable industry forums in India and abroad and also served at the helm of all renowned power and telecommunication cables industry association(s) in India for several years.

Mr. R. Sridharan (President and CEO)

Company Executive with rich Technical and Marketing expertise

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 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 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. 54.48
UK Pound	1	Rs. 82.71
Euro	1	Rs. 72.23

INFORMATION DETAILS

Report Prepared by :

DPT

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	3
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	3
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	3
--LEVERAGE	1~10	3
--RESERVES	1~10	3
--CREDIT LINES	1~10	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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		30

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.