MIRA INFORM REPORT

Report Date :

20.01.2014

IDENTIFICATION DETAILS

Name :	TLG INDIA PRIVATE LIMITED (w.e.f.24.05.2001)
Formerly Known As :	LEO BURNETT INDIA PRIVATE LIMITED (w.e.f.06.09.2000) CHAITRA LEO BURNETT PRIVATE LIMITED (w.e.f.06.07.1992) CHAITRA ADVERTISING PRIVATE LIMITED
Registered Office :	Big Apple, Dr. Shirodkar Road, Parel, Mumbai – 400012, Maharashtra
Country :	India
Financials (as on) :	31.03.2013
Date of Incorporation :	15.05.1972
Com. Reg. No.:	11-015798
Capital Investment / Paid-up Capital :	Rs. 30.065 Millions
CIN No.: [Company Identification No.]	U74300MH1972FTC015798
PAN No.: [Permanent Account No.]	AAACC1756E
Legal Form :	Private Limited Liability Company
Line of Business :	Providing Advertising and Communication services which includes traditional advertising Services (also called Creative), Media Services and Specialised Marketing Services.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ca (16)

RATING		STATUS	PROPOSED CREDIT LINE
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

Status :	Moderate
Payment Behaviour :	Slow
Litigation :	Clear
Comments :	Subject is a subsidiary of Publicis Groupe Holdings BV, Netherlands. It is an established company having moderate track record. The management has recorded huge accumulated losses due to which the networth of the company has been eroded. However, business is active. Payment terms are slow. In view of strong holding company and reputed client base, the subject can be considered for business dealings on a safe and secured 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, 2013

Country Name	Previous Rating (30.06.2013)	Current Rating (30.09.2013)
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’s current account deficit narrowed in the quarter ended September as government measures to curb imports, especially gold, kicked in.  The current account deficit, the excess of a country’s imports of goods and services over exports, narrowed to $ 5.2 billion from $ 21 billion in the year ago period, according to provisional Reserve Bank of India data. Finance Minister P. Chidambaram said the CAD for the year will be less than $ 60 billion or 3 per cent of GDP and the latest data suggests the government may achieve the target.

India was ranked 94^th among the world’s most corrupt nations list. Denmark and New Zealand topped as the cleanest while Somalia emerged as the most corrupt.

India’s services sector activity witnessed a moderate improvement in November over the previous month, even while indicating the fifth successive monthly contraction, according the HSBC survey.

$53 million estimated losses suffered by India due to phishing attacks during the third quarter, according to a study by RSA. India ranks fourth in the list of nations hit by phishing attacks. The US remained at the top of the charts. Phishing is the process of acquiring information such as user names, passwords and credit card details by sending e-mails disguised as official mails.

Rs.4080 million worth of mobile-phone-based transactions by July 2013 compared to Rs.260 million in September, 2012, according to Deloitte report. The number of transactions has shot up from 94000 to 701000.

India aims to earn Rs.400000 million from the bandwidth auction set for January. The merger and acquisition guidelines, cleared by a group of ministers, will be out before the auction begins so that players can make informed decisions on the auctions.

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.

LOCATIONS

Registered Office :	Big Apple, Dr. Shirodkar Road, Parel, Mumbai – 400012, Maharashtra, India
Tel. No.:	91-22-56634444/ 66634444/ 66634343
Fax No.:	91-22-24173825
E-Mail :	venkatesh.bangera@resources-in.com
Correspondence Office :	15^th Floor, Urmi Estate, Tower A, 95, Ganpatrao Kadam Marg, Lower Parel (West), Mumbai – 400013, Maharashtra, India
Tel. No.:	91-22-30410200
Fax No.:	91-22-30410210

DIRECTORS

AS ON 17.06.2013

Name :

Mr. Arvind Rajkishore Sharma

Designation :

Whole-time director

Address :

11, Oceanview Annexe, 100 Bhulabhai Desai Road, Mumbai – 400026, Maharashtra, India

Date of Birth/Age :

10.06.1956

Date of Appointment :

03.05.1988

PAN No.:

AAGPS5691F

Voter ID No.:

MT 08 036 208208

DIN No.:

01229072

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Date of cessation	Company/ LLP Status	Defaulting status
1	U74300MH1972FTC015798	TLG INDIA PRIVATE LIMITED	Whole-time director	03/05/1988	03/05/1988	-	Active	NO
2	U74300MH1981FTC024111	ORCHARD ADVERTISING PRIVATE LIMITED	Director	05/06/1992	05/06/1992	-	Active	NO
3	U74300MH2003FTC139075	BLACK PENCIL ADVERTISING PRIVATE LIMITED	Director	07/02/2003	07/02/2003	-	Amalgamated	NO
4	U91200MH1985GAP037820	THE ADVERTISING STANDARDS COUNCIL OF INDIA	Director	01/07/2005	01/07/2005	-	Active	NO
5	U99999MH1994NPL076530	MEDIA RESEARCH USERS COUNCIL	Director	28/09/2005	28/09/2005	-	Active	NO
6	U74899MH1994PTC235016	SOLUTIONS INTEGRATED MARKETING SERVICES PRIVATE LIMITED	Alternate director	28/06/2007	28/06/2007	07/08/2007	Active	NO
7	U72199DL2002PTC116725	TF CONFERENCES PRIVATE LIMITED	Alternate director	28/06/2007	28/06/2007	07/08/2007	Amalgamated	NO
8	U74899DL1992PTC048564	LFP SERVICES PRIVATE LIMITED	Alternate director	28/06/2007	28/06/2007	07/08/2007	Amalgamated	NO
9	U72200MH2000PTC128824	INDIGO SYSTEMS AND TECHNOLOGY CONSULTING (INDIA) PRIVATE LIMITED	Director	09/04/2012	02/02/2012	-	Active	NO
10	U73100DL2010NPL205584	BROADCAST AUDIENCE RESEARCH COUNCIL	Director	27/09/2013	19/03/2013	-	Active	NO
11	U80903GJ2013NPL074688	GYAN SHALA FOUNDATION	Director	23/04/2013	23/04/2013	-	Active	NO

Name :

Mr. Nitish Mukherjee

Designation :

Whole-time director

Address :

269, Tagore Park, New Delhi – 110009, India

Date of Birth/Age :

09.05.1958

Date of Appointment :

01.11.2000

PAN No.:

AALPM7977R

Voter ID No.:

DL 06 061 222912

DIN No.:

00561390

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U74300MH1981FTC024111	ORCHARD ADVERTISING PRIVATE LIMITED	Director	01/09/2007	01/11/2000	Active	NO
2	U74300MH1972FTC015798	TLG INDIA PRIVATE LIMITED	Whole-time director	01/11/2000	01/11/2000	Active	NO

Name :

Mr. Jaroslaw Piotr Ziebinski

Designation :

Director

Address :

38, Mount Echo Park, Singapore 248792

Date of Birth/Age :

08.06.1962

Date of Appointment :

16.07.2009

DIN No.:

02710385

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U74300MH1972FTC015798	TLG INDIA PRIVATE LIMITED	Director	16/07/2009	25/06/2009	Active	NO
2	U74300MH1981FTC024111	ORCHARD ADVERTISING PRIVATE LIMITED	Director	16/07/2009	25/06/2009	Active	NO
3	U72200MH2000PTC128824	INDIGO SYSTEMS AND TECHNOLOGY CONSULTING (INDIA) PRIVATE LIMITED	Director	09/04/2012	02/02/2012	Active	NO

Name :

Mr. Thomas Lloyd Bernardin

Designation :

Director

Address :

614 Spruce Ave Lake Forest United States 60045

Date of Birth/Age :

23.09.1953

Date of Appointment :

23.07.2010

DIN No.:

03546513

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U74300MH1972FTC015798	TLG INDIA PRIVATE LIMITED	Director	23/07/2010	19/07/2010	Active	NO
2	U74300MH1981FTC024111	ORCHARD ADVERTISING PRIVATE LIMITED	Director	23/07/2010	19/07/2010	Active	NO

Name :

Mr. Manjit Singh Sandhu

Designation :

Director

Address :

630 Upper Thomson Road, #02-70, Singapore 787132

Date of Birth/Age :

23.09.1953

Date of Appointment :

27.06.2012

DIN No.:

05280786

Other Directorship :

S.No.	CIN/LLPIN	Name of the Company/ LLP	Current designation of the Director/ Designated Partner	Date of appointment at current designation	Original date of appointment	Company/ LLP Status	Defaulting status
1	U74300MH1981FTC024111	ORCHARD ADVERTISING PRIVATE LIMITED	Director	27/06/2012	29/03/2012	Active	NO
2	U74300MH1972FTC015798	TLG INDIA PRIVATE LIMITED	Director	27/06/2012	29/03/2012	Active	NO

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 17.06.2013

Names of Shareholders	No. of Shares
Publicis Groupe Holdings BV, Netherlands	300651
Arebu Holdings B V, Netherlands	1
Total	300652

AS ON 31.07.2013

Names of Allottees	No. of Shares
Publicis Groupe Holdings BV, Netherlands	99999
Arebu Holdings B V, Netherlands	1
Total	100000

AS ON 17.06.2013

Equity Share Breakup	Percentage of Holding
Category
Foreign holdings [Foreign institutional investors, Foreign Companies, Foreign Financial Institutions, Non-resident Indian or Overseas corporate bodies or others]	100.00
Total	100.00

BUSINESS DETAILS

Line of Business :	Providing Advertising and Communication services which includes traditional advertising Services (also called Creative), Media Services and Specialised Marketing Services.
Brand Names :	· LeoBurnett Starcom ZenithOptimedia Digitas Vivaki Exchange Liquid Thread

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

Not Available

Facilities :

SECURED LOANS	31.03.2013 (Rs. In Millions)	31.03.2012 (Rs. In Millions)
LONG-TERM BORROWINGS
Long-term maturities of finance lease obligations	0.000	4.042
Total	0.000	4.042

Banking Relations :	--
Auditors :
Name :	S.R. Batliboi and Associates LLP Chartered Accountants
Address :	The Ruby, 12^th Floor, Zone A, 29 Senapati Bapat Marg, Dadar [West], Mumbai - 400028, Maharashtra, India
Income-tax PAN of auditor or auditor's firm :	AABFS3421N
Fellow Indian Subsidiaries :	· Brandmap Communication Private Limited Hanmer MSL Communications Private Limited Indigo Systems and Technology Consulting (India) Private Limited Publicis Communication Private Limited Resultrix Media Private Limited (from 29th Oct, 2012) Saatchi & Saatchi Private Limited Solutions Integrated Services Private Limited Twenty Twenty Media Private Limited Twenty Twenty Webtech Private Limited Watermelon Health Care Communications Private Limited (from 09th May, 2011)
Fellow International Subsidiaries :	· Beacon Communications k.k., Japan Business Compass FZ-LLC Denuo Limited – Zenith Optimedia, Hongkong Hemisphere – Leo Burnett Inc, Philippines Kitchen Reklambyra As, Norway LB Shangai Advertising Company Limited, Beijing Leo Burnett Company Inc, Chicago Leo Burnett Company Limited, Canada Leo Burnett Global Centre Leo Burnett Limited, Argentina Leo Burnett Limited, Hong Kong Leo Burnett Limited, London Leo Burnett Limited, Malaysia Leo Burnett Limited, Philippines Leo Burnett Limited, Singapore Leo Burnett Limited, Thailand Leo Burnett Limited, USA Inc Leo Burnett USA Brand Advertising Global, USA Leo Burnett M&T Vietnam MMS Communications Singapore Pte. Limited Ninah Consulting Limited, USA Performics, Singapore PG Lion Re:Sources Australia Pty Limited, Australia Phone Valley, France PT.Star Reachers, Indonesia Publicis Group Services, France Resources, USA Resources, France Star Reacher Advertising Sdn Bhd, Malaysia Star Reacher Group Company Limited, Thailand Starcom Dubai, United Arab Emirates Starcom Guangzhou, China Starcom Mediavest Group FZ LLC, UAE Starcom Mediavest Group, London Starcom, Chicago Starcom, Hong Kong Starcom, Malasiya Starcom, Singapore Starcom, Asia Pacific Starcom Mediawest Group Inc, USA Starcom Mediawest Group Inc, Srilanka Starcom Mediavest Group Medya Planama Satinalma Danismanlik Ve PAZ AS, Turkey VivaKi (Malaysia) Sdn. Bhd Vivaki Inc, USA Vivaki Performance Zenith Optimedia, France Zenith Optimedia International Limited, United Kingdom Zenith Optimedia, Australia Zenith Optimedia, Belgium Zenith Optimedia, France Zenith Optimedia, Singapore Zenith Optimedia, Hong Kong
Holding company :	Publicis Groupe Holdings BV, Netherlands
Subsidiary company :	Orchard Advertising Private Limited [U74300MH1981FTC024111]

CAPITAL STRUCTURE

AFTER 17.06.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
410,000	Equity Shares	Rs. 100/- each	Rs. 41.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
400,652	Equity Shares	Rs. 100/- each	Rs. 40.065 Millions

AS ON 31.03.2013

Authorised Capital :

No. of Shares	Type	Value	Amount
400,000	Equity Shares	Rs. 100/- each	Rs. 40.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
300,652	Equity Shares	Rs. 100/- each	Rs. 30.065 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS	31.03.2013	31.03.2012	31.03.2011
I. EQUITY AND LIABILITIES
(1)Shareholders' Funds
(a) Share Capital	30.065	30.065	0.965
(b) Reserves & Surplus	(200.458)	(219.961)	(317.613)
(c) Money received against share warrants	0.000	0.000	0.000
(2) Share Application money pending allotment	0.000	0.000	0.000
Total Shareholders’ Funds (1) + (2)	(170.393)	(189.896)	(316.648)
(3) Non-Current Liabilities
(a) long-term borrowings	0.000	4.042	9.434
(b) Deferred tax liabilities (Net)	0.000	0.000	0.000
(c) Other long term liabilities	0.000	0.000	0.000
(d) long-term provisions	35.750	32.382	38.173
Total Non-current Liabilities (3)	35.750	36.424	47.607
(4) Current Liabilities
(a) Short term borrowings	471.544	1170.807	1025.408
(b) Trade payables	4190.455	3954.614	2583.974
(c) Other current liabilities	2492.448	1398.281	2278.136
(d) Short-term provisions	70.839	61.314	42.577
Total Current Liabilities (4)	7225.286	6585.016	5930.095
TOTAL	7090.643	6431.544	5661.054
II. ASSETS
(1) Non-current assets
(a) Fixed Assets
(i) Tangible assets	118.439	53.645	47.056
(ii) Intangible Assets	55.401	10.170	20.074
(iii) Capital work-in-progress	0.000	0.000	0.000
(iv) Intangible assets under development	0.000	17.867	8.213
(b) Non-current Investments	0.200	0.200	0.200
(c) Deferred tax assets (net)	0.000	0.000	47.801
(d) Long-term Loan and Advances	473.915	536.229	628.459
(e) Other Non-current assets	0.000	1.603	0.000
Total Non-Current Assets	647.955	619.714	751.803
(2) Current assets
(a) Current investments	0.000	0.000	0.200
(b) Inventories	0.000	0.000	0.000
(c) Trade receivables	3759.596	4140.828	2468.672
(d) Cash and cash equivalents	36.440	65.267	37.842
(e) Short-term loans and advances	425.517	331.039	132.959
(f) Other current assets	2221.135	1274.696	2269.578
Total Current Assets	6442.688	5811.830	4909.251
TOTAL	7090.643	6431.544	5661.054

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2013	31.03.2012	31.03.2011
	SALES
		Revenue from operations	1990.180	1625.255	1668.502
		Other Income	275.841	212.662	228.532
		TOTAL	2266.021	1837.917	1897.034
Less	EXPENSES
		TOTAL	2246.277	1971.536	2075.227
	PROFIT/ (LOSS) BEFORE TAX		19.744	(133.619)	(178.193)
Less	TAX		0.241	59.729	(6.346)
	PROFIT/ (LOSS) AFTER TAX		19.503	(193.348)	(171.847)
	EARNINGS IN FOREIGN CURRENCY
		Gross billings (including commission) for advertising	399.094	121.728	NA
	Earnings/ (Loss) Per Share (Rs.)		64.87	(643.10)	NA

KEY RATIOS

PARTICULARS		31.03.2013	31.03.2012	31.03.2011
PAT / Total Income	(%)	0.86	(10.52)	(9.06)
Net Profit Margin (PBT/Sales)	(%)	0.99	(8.22)	(10.68)
Return on Total Assets (PBT/Total Assets}	(%)	0.28	(2.08)	(3.18)
Return on Investment (ROI) (PBT/Networth)		(0.12)	0.70	0.56
Debt Equity Ratio (Total Debt/Networth)		(2.77)	(6.19)	(3.24)
Current Ratio (Current Asset/Current Liability)		0.89	0.88	0.83

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	Yes
8]	No. of employees	No
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)	No
21]	Market information	--
22]	Litigations that the firm / promoter involved in	--
23]	Banking Details	No
24]	Banking facility details	Yes
25]	Conduct of the banking account	--
26]	Buyer visit details	--
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	Yes
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	Yes
33]	Voter ID No of Proprietor/Partner/Director, if available	Yes
34]	External Agency Rating, if available	No

INDEX OF CHARGES

S.NO.	CHARGE ID	DATE OF CHARGE CREATION/MODIFICATION	CHARGE AMOUNT SECURED	CHARGE HOLDER	ADDRESS	SERVICE REQUEST NUMBER (SRN)
1	90188810	10/06/2003 *	20,000,000.00	BANQUE NATIONALE DE PARIS BANK	62; HOMJI STREET, MUMBAI - 400001, MAHARASHTRA, INDIA	-
2	90188515	18/01/1994	10,000,000.00	BANQUE NATIONALE DE PARIS BANK	62; HOMJI STREET, MUMBAI - 400001, MAHARASHTRA, INDIA	-
3	90187370	25/02/1991 *	1,000,000.00	BANK OF INDIA	CUMBALLA HILL BRANCH, NS PATKAR MARG, MUMBAI - 400036, MAHARASHTRA, INDIA	-
4	90188234	26/08/1986	1,000,000.00	BANK OF INDIA	CUMBALLA HILL BRANCH, NS PATKAR MARG, MUMBAI - 400036, MAHARASHTRA, INDIA	-
5	90188117	01/10/1982	500,000.00	BANK OF INDIA	CUMBALLA HILL BRANCH, NS PATKAR MARG, MUMBAI - 400036, MAHARASHTRA, INDIA	-
6	90188062	20/04/1979	550,000.00	BANK OF INDIA	DUROW BAUG BRANCH, COLABAD CUSWAY, MUMBAI - 400039, MAHARASHTRA, INDIA	-

* Date of charge modification

UNSECURED LOANS

UNSECURED LOANS	31.03.2013 (Rs. In Millions)	31.03.2012 (Rs. In Millions)
SHORT TERM BORROWINGS
Term loans from banks	140.151	1164.873
Working capital loans from banks	330.000	0.000
Other loans and advances	1.393	5.934
Total	471.544	1170.807

CORPORATE INFORMATION

TLG India Private Limited ('TLG' or 'the company') was incorporated on May 15, 1972 as "Chaitra Advertising Private Limited", and is a subsidiary of Publicis Groupe Holdings BV, Netherlands. Subsequently on September 6, 2000, the company changed its name to "Leo Burnett India Private Limited". Effective May 24, 2001, the name of the company has been changed to "TLG India Private Limited".

The company is principally engaged in providing a range of communication services, which primarily relates to advertising by creative and production work, media planning and buying, digital designing, marketing services, advertising projects, strategic consulting, public relation services.

AMALGAMATION OF WHOLLY OWNED SUBSIDIARY, BLACK PENCIL ADVERTISING PRIVATE LIMITED WITH THE COMPANY

a) Pursuant to the Scheme of Arrangement and Amalgamation ('the Scheme') approved by Honbl'e Mumbai High Court under Section 391 to 394 read with section 100 to 103 and other applicable provisions of the Companies Act, 1956, the company had taken over business of wholly owned subsidiary, Black Pencil Advertising Private Limited (BPAPL) with effect from April 1, 2010, being the Appointed Date. All the assets and liabilities of BPAPL as at April 1, 2011 were transferred to the Company at their respective book values.

b) The Scheme was effective from the Appointed Date (April 1, 2010) but is operative from the date on which the certified copies of the Orders of the High Court of Mumbai are filed with the Registrar of Companies (the Effective date, which is August 4, 2011).

c) General business of the amalgamating companies is providing a range of advertising services, which includes creative, print production, artwork, etc.

d) As per the Scheme, from the Appointed Date (April 1, 2010) BPAPL carried on business and activities for the benefit of and in trust for the company and thus, all the profits or losses accruing or arising to BPAPL were treated as profits or losses of the company.

e) Accordingly, all the assets and liabilities of BPAPL as at April 1, 2011 were taken over by the company at their

book value. The difference between the net assets of BPAPL transferred to the company and the share capital held by the company was accounted as Reserves & Surplus.

The details of the assets and liabilities transferred to the Company, the shares issued and the resultant reserves & surplus as per the Scheme are detailed as below:-

Particulars
Cash
Other assets
Total Assets
Less: Current Liabilities and Provisions	19.250
Share capital held by the company	0.200
Profit and Loss Account balance of subsidiary as at 1st April, 2010	(12.530)
Profit of Subsidiary for the FY 2010 -11	0.603

g) There are no differences in accounting policies between the two companies.

AMALGAMATION OF HANMER MSL COMMUNICATIONS PRIVATE LIMITED WITH THE COMPANY

The company, pursuant to the provisions of section 391 to 394 of the Companies Act, 1956 has filed the Scheme of Amalgamation (scheme) for merger with Hanmer MSL Communications Private Limited, ("transferor company") on 08 October, 2012 with the Hon'ble High Court of Mumbai. Pending the approval of the scheme from the High Court, no effect of scheme is given in these financial statements.

BUSINESS OVERVIEW:

The Company is principally engaged in providing a range of Advertising and Communication services which includes traditional advertising Services (also called Creative), Media Services and Specialised Marketing Services by acting as full service agency. They operate under the brands primarily known as LeoBurnett, Starcom, ZenithOptimedia, Digitas, Vivaki Exchange and Liquid Thread.

During the year the Company has suffered a loss which is mainly driven by provision for doubtful debts made based on conservative accounting practices and significant increase in finance cost of borrowings.

Company’s continued effort in generating value to our Clients with most powerful creative advertisements and focusing on driving Return on Investment, managing best deals, generating powerful Research, effective usage of Media funds etc ensured that the company continues to maximise client satisfaction.

Leo Burnett has been well placed in the advertising fraternity by gathering 35 prominent awards (including 3 gold) for distinctive work done by the agency at the Goa Fest 2012.

The Company continues to remain focused in targeting growth industries and focusing on digital media, and thus reap the benefits in the coming years, while remained focused n developing and retaining quality talent.

During the year, the company added substantial new business to its existing client portfolio by winning the accounts of Honda Siel Cars, India Bulls, GlaxosmithKline, Jaiprakash Associates and so on.

FIXED ASSETS:

· Furniture and fixtures

Vehicles

Office equipment

Computer equipments

Other equipments

Leasehold improvements

Computer software

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No 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. 61.35
UK Pound	1	Rs. 100.21
Euro	1	Rs. 83.52

INFORMATION DETAILS

Report Prepared by :

BVA

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	1
OPERATING SCALE	1~10	2
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	2
--PROFITABILIRY	1~10	1
--LIQUIDITY	1~10	2
--LEVERAGE	1~10	2
--RESERVES	1~10	1
--CREDIT LINES	1~10	2
--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	NO
--OTHER MERIT FACTORS	YES/NO	YES
DEFAULTERS
--RBI	YES/NO	NO
--EPF	YES/NO	NO
TOTAL		16

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.