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October 28, 2010

Mumbai

NEGOLICE INDIA LIMITED

Rs.314.0 Million Term Loan B+/Stable (Reaffirmed)

CRISILs rating on the bank facilities of Negolice India Ltd (NGIL) continues to reflect NGILs significantdependence on customer advances for completion of its ongoing project on time; the project involves constructinga group housing society (Victoria Gardens). The company is also exposed to demand- and revenue-related risksbecause of slow recovery in the realty market. These weaknesses are mitigated by the established track recordof NGILs promoters in the construction industry.

Outlook: StableCRISIL believes that the progress of NGILs ongoing project will continue to depend on timeliness in inflow ofcustomer advances; NGILs cash accruals will also remain exposed to risks related to sale of property. Theoutlook may be revised to Positive if NGIL generates more-than-expected sales from the project, improving itscash accruals. Conversely, the outlook may be revised to Negative if NGILs cash accruals are adverselyaffected because of delays in advances from customers leading to time overrun in the project.

Update

In 2009-10 (refers to financial year, April 1 to March 31), NGIL got approval for increasing its projects floor arearatio (FAR) to 3.45 from 2.50. This led the company into constructing additional 100 dwelling units. Because of theincrease in scale of the project, its completion is expected by the first quarter of 2011-12, against October 2010estimated earlier. In 2009-10, construction moved in tandem with the pace of customer advances. Till March 2010NGIL had spent around Rs.1.4 billion on construction and land development. Out of the 400 dwelling units planned,around 250 have been booked so far. The company had received customer advances of around Rs.1.4 billion tillMarch 2010.

About the CompanyNGIL is the flagship company of the M2K group. The company, formerly known as Prasidh Leasing Ltd, wasincorporated in September 1983; its name was changed to the current one in June 1999. NGIL is constructing agroup housing society, Victoria Gardens, on a 4.54-acre land plot. The project was launched in 2005. VictoriaGardens, having around 400 dwelling units, is strategically located in North Delhi, opposite the Azadpur metrostation, on the ring road adjoining Model Town, Delhi.

Media Contacts Analytical Contacts CRISIL Rating Desk

Mitu Samar

Head, Market Development &CommunicationsCRISIL LimitedTel: +91-22- 3342 1838Email: msamar@crisil.com

Tanuja AbhinandanMarket Development &CommunicationsCRISIL LimitedTel: +91-22-3342 1818Email: tabhinandan@crisil.com

Gurpreet S Chhatwal

Director - CRISIL RatingsTel: +91-11-4250 5100Email:gchhatwal@crisil.com

Manish Kumar GuptaHead - CRISIL RatingsTel: +91-11-4250 5100Email: mkgupta@crisil.com

Tel: +91-22-3342 3047 / 3342 3064

Email:CRISILratingdesk@crisil.com

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