Global Absolute is one of the few research based brokerages world-wide that produces bottom-up

research covering the Asian CB universe. As there are few players providing this service we have been
able to capture significant market share as an organisation with sales/trading footprints in UK and
Singapore and research centre in India under our CBs specialist Mr. Rajinder Singh. We provide credit,
asset cover, liquidation, price point discovery analysis for the entire Asian CBs Universe. We are pretty
confident this market will continue to grow from $60bn and the CBs will become the instrument of
choice for new issuance. We attach the initiative coverage report of ”Bio-Treat-Technology Ltd”.

BIO-TREAT TECHNOLOGY LTD: SGD 0.000’13 Issued 8/26 worth S$ 206mn

High Yield /Low Credit: BUY

Revenue Growth drivers of Bio-Treat on a Going Concern Basis:

The following positive factors may only be applicable on a full going concern basis, post any
restructuring by the company and only if cash payments are made as planned with any relevant bond
holders.

Long-term outlook for industry remains strong -

(Bio-Treat) is one of the People’s Republic of China (PRC's) largest private companies in the field of
treatment of waste and wastewater. In 1993, Bio-Treat had developed the BMS Biological Process
Technology ("BMS Technology") - a unique application of biological processes for the treatment of waste
and wastewater. BMS Technology has been successfully applied to over 500 wastewater treatment
projects in the PRC, which includes residential, commercial and industrial projects. Leveraging its BMS
Technology, Bio-Treat has executed many large-scale municipal projects. Currently, the company’s has a
portfolio of 13 large scale BOT and TOT projects in China. Upon completion of these projects, Bio-Treat
will have a daily treatment capacity of over one million metric tonnes of wastewater.

Under the National 11th Five-Year Plan (From 2006 to 2010), the PRC government is planning to invest
around RMB 600 billion to improve the water supply and wastewater treatment facilities over the
following five to ten years. Water consumption in China is expected to continue growing on the back of
population growth and industrialization (Source: China Statistical Yearbook 2006). Total annual water
consumption is projected to increase from 554 billion cu m in 2005 to 832 billion cu m in 2050, while
industrial off-take is expected to grow at a much faster pace from 128 billion cumto 344 billion cumover
the same period. In the wastewater sector, China generated around 53.7 billion tonnes of wastewater in
2006, and this is expected to increase by 19.2% to 64 billion tonnes in 2010 due to rapid urbanisation
and expansion (Source: Research and Markets, China: Water Treatment Industry, 2007). Due to its
superior BMS Technology, Bio-Treat was able to capitalize on the opportunities in the industry.
However, the demand for turnkey projects in this industry has slowed down significantly in 2008, and
due to the credit crunch, most BOT/TOT funding is getting harder. However, we do expect an
improvement in the market from the beginning of 2010 with the expenditure on water and wastewater
projects in China particularly from the public sector being largely unaffected by the recent financial
turmoil, with considerable funds being direct in the public services and infrastructure construction
segments. We are expecting a growth of around 10% - 12% this year, and expected to recover to around
15% post 2010. According to company data Bio-Treat has managed to secure 13 BOT and TOT projects,
with almost 80% of the projects completed. At present, 7 BOT/TOT have been completed and have
started delivering revenues from 2008 itself. Upon completion of these projects, Bio- Treat will have a
daily treatment capacity of over one million metric tonnes of waste water.
Our View: The present outstanding amount of CBs is around S$ 169.25mn and the company is offering a
new CB which is redeemable at a value of S$ 37.08mn (to be payable in two tranches within the next 6
months) which represents a value of 21.9% of the total outstanding CBs value. In addition, they will offer
warrants amounting to 0.53 warrants for each bond and each warrant will convert into one share at an
exercise price of S$ 0.025 which represents a 62% discount to the CMP of S$ 0.65. Based on our GA
Bond Price Discovery Model we recommend investors to the bonds up to a maximum price of S$19. At
this valuation the investor will receive S$21.9 in cash on the redemption of the bonds within the next 6
months and earn a further 11.1% by exercising the warrants and selling shares (assuming shares sold at
around CMP).
Please contact for the detail research report: research@globalabsolute.com

Global Absolute is one of the few research based brokerages world-wide that produces bottom-up
research covering the Asian CB universe. As there are few players providing this service we have been
able to capture significant market share as an organisation with sales/trading footprints in UK and
Singapore and research centre in India under our CBs specialist Mr. Rajinder Singh. We provide credit,
asset cover, liquidation, price point discovery analysis for the entire Asian CBs Universe. We are pretty
confident this market will continue to grow from $60bn and the CBs will become the instrument of
choice for new issuance. We attach the initiative coverage report of “Prime Focus Ltd”.

PRIME FOCUS: USD 0.000’12 (PRIF) Iss’d 12/07 USD 55m

FCCB Redemption Cover of 0.85x,
Good Yield/ Credit:”BUY”
Prime Focus has been emerging as World’s completely integrated Visual Entertainment Services
Company from a Mumbai-centric post production. The company has been constantly evolving to the
needs and ambition to create sustainable value over the long run in the entertainment business. The
company had acquired several companies in USA, UK and Canada and has presence in different
geographies.

Investment Rationale:

Robust Project pipeline:

The company has robust projects pipeline in big budget films in USA, UK & India, 3D (stereo) films, music
concerts and broadcasting post production. Some of the major big budget films projects are already
executed and in execution stage. This provides revenue visibility of the company.

Scalable, sustainable and de-risked business model:

Price focus has scalable, sustainable and de-risked business model with a well diversified revenue
stream in terms of geographical locations, service verticals (equipment rental, post production and
visual effects) and product segments (films, television and advertising), helped to insulate it if there is a
slowdown in any particular geography, service and product segment. Prime Focus's business is fairly
asset-intensive (FY09 sales/gross block of 0.5x). However, gestation period is low, and once the assets
are in place, the business is extremely scalable. This business model would drive sustainable revenue
growth of the company.

Entering into high growth trajectory VFX and Digital Asset Management:
The company has been developing focus in two high growth trajectory business areas i.e. VFX and Digital
Asset Management. The demand for VFX in India, UK and North America as well as the off shoring
opportunity from UK and North America are on a high growth trajectory. Prime Focus has taken the lead
in the process of digital remastering and cataloguing content through its proprietary digital asset
management system 'CLEAR'. Digital Asset Management is going to drive the company’s revenue growth
as the digital distribution of media becomes increasingly important; it becomes imperative for all current
and old media to be held digitally. In our view, the company is uniquely positioned to capitalize on the
global opportunity on the back of footholds in strategic international locations, established global
infrastructure, state-of-the-art technology platforms and access to high quality talent.

3D (stereo) films- Next growth driver:

Prime Focus has developed tools for production of stereo films and developed techniques to
dimensionalize existing films into stereo films, which we believe that the next growth driver of the
company. We believe that this technology would generate a sustainable revenue stream over the next
few years as the major Hollywood studios set goals to produce only stereo films and every studio is also
planning to "dimensionalize" films already in their library and rerelease them in theatres or release them
as stereo DVDs.

Our View: Prime Focus has issued $ 55mn worth of zero coupon FCCBs maturing in December 2012,
which are trading at a high yield of 36.11% with an indicative price of 55. With the increase in
advertisement spending with recovery of the global economy, strengthening in broadcast post
production and garnering bigger budget film in USA & UK, we expect a robust sales growth on
reasonable gearing level. At the CMP of Rs. 212 and the initial conversion price of Rs. 1,019.43 (FX of
39.39), FCCB are unlikely to convert to equity in the next 12-18 months. However, the company has
good operating cash flow, strong asset base, reasonable debt position, limited liabilities and sound cash
position. The company has average FCCB Redemption Cover of 0.85x, till the year FY13 and has FCCB
Coverage of 1.31x in FY13. The company has current debt/equity ratio of 2.27x, Debt (Exclude WC)/
Equity of 2x, Debt (Exclude FCCB)/Equity of 1.5x, EBITDA / Debt of 0.1x, Interest Coverage Ratio of 0.5x
and Operating Cash flow/Debt of 0.5x. Debt/equity ratio is expected to decline at a comfortable level of
1.7x in FY13 as increase in profitability and cash inflow. Considering the good operating cash flow, strong
asset base, debt position, limited liabilities and sound cash position couple with fairly predictable,
scalable, profitable and de-risk business model we have assigned GA Bond Rating 2 on Prime Focus’s
FCCBs. GA Bond Rating 2 indicates Prime Focus may be able to fully cover its FCCB liability from its
operational income or capacity to refinance debt in case of any shortfall in the Company’s cash from
operations. Hence, we recommend a “BUY” on the company’s FCCBs as a Good Yield/ Credit.
Please contact for the detail research report: research@globalabsolute.com

Global Absolute is one of the few research based brokerages world-wide that produces bottom-up
research covering the Asian CB universe. As there are few players providing this service we have been
able to capture significant market share as an organisation with sales/trading footprints in UK and
Singapore and research centre in India under our CBs specialist Mr. Rajinder Singh. We provide credit,
asset cover, liquidation, price point discovery analysis for the entire Asian CBs Universe. We are pretty
confident this market will continue to grow from $60bn and the CBs will become the instrument of
choice for new issuance. We attach the initiative coverage report of “Cranes Software Ltd”.

CRANES SOFTWARE INTERNATIONAL LTD

CRANES SOFTWARE EUR 2.500 '11 (EDC IN) Iss'd 7/26 EUR42m (‘Special Situation’)
GA Rating 2:
YIELD/LOW CREDIT:”BUY”

Cranes Software International Limited is engaged in the development and global marketing of
engineering simulation and enterprise data analytics software and services. Over a period of time, the
Company accumulated a portfolio of proprietary products, with deep domain knowledge in the areas of
engineering simulation and statistical analytics. The Company’s presence in niche areas of scientific and
engineering software enables it to deliver higher margin on sustainable basis. The Company is heavily
investing into newer technologies, like wireless communications and micro electro-mechanical systems.

Cash position:
Cranes’ continuous acquisition in the recent past has put pressure on debt/equity ratio and is currently
at 1.24x. Global slowdown, last year, has impacted the operations with inventory and debtors gone up
significantly in FY09. This has resulted in the tight liquidity position with debt repayment each year.
Although it has Rs. 2.5bn cash & bank balances in FY09, debt maturity in each financial year, FCCB
maturity in FY11 and reduced cash generation ability (due to current economic condition and increased
cost) has placed the company in cash strapped situation. Therefore, the company has decided to raise
capital through stake sale in its subsidiaries to private equity. We have done brief cash analysis where
cash inflow and outflow is determined, thus arriving at the additional cash require in FY10E&FY11E.

Our View: We expect a flat sales (consolidated) growth in FY10E & 20% in FY11E based on the improving
economic scenario globally, resulting in the increase in demand for the company’s products. The
company is also taking measures to reduce collection period from the current levels, which would ease
off the cash pressure in the coming quarters. The company is looking to raise capital through stakes sale
in its subsidiaries to private equity, and finally hives off its non-core subsidiaries. This move would
provide cash inflow to repay its liabilities and helps to increase focus on core business. However,
uncertainty over CB coupon payments is an issue as some of the Bondholders have confirmed that the
coupon payment due in September 2009 has not been received. Cranes has invested in proprietary
technologies that would deliver returns over a longer period of time. The company is also in the process
of launching its `Solutions' business, which will drive the top-line going forward. This initiative will give
Cranes an end-to-end solution suite in the niche area of engineering and scientific software products.
The company’s revenue & profit has fallen significantly, and has higher debt on its books. Moreover,
uncertainty over CB coupon payments due in September 2009 is a concern, though management has
denied the same. We believe, Cranes would come out of these temporary jerks in the coming years.
Therefore, we recommend “BUY” on CRANES SOFTWARE EUR 2.500 '11 (EDC IN) Iss'd 7/26 EUR42m as
‘Special Situation’ for the investors with high risk appetite.
Please contact for the detail research report: research@globalabsolute.com