MIRA INFORM REPORT

Report Date :

06.03.2007

IDENTIFICATION DETAILS

Name :	KASTURI AND SONS LIMITED
Registered Office :	Kasturi Building, 859-860, Anna Salai, Chennai – 600 002, Tamil Nadu
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	21.02.1940
Com. Reg. No.:	18-1091
CIN No.: [Company Identification No.]	L22110TN1940PLC001091
TAN No.: [Tax Deduction & Collection Account No.]	CHEK00065C
PAN No.: [Permanent Account No.]	AAACK3000H
Legal Form :	A closely held public limited liability company.
Line of Business :	The company acts as publishers. The company is engaged in printing, publishing and circulating of magazines and newspapers. It also acts as importers and exporters.

RATING & COMMENTS

MIRA’s Rating :

A

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 120000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed publisher of magazines and newspapers. Available information indicates high financial responsibility of the company and its' directors. Fundamentals are strong and healthy. Payments are always correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office / Corporate Office :	Kasturi Building, 859-860, Anna Salai, Chennai – 600 002, Tamil Nadu, India
Tel. No.:	91-44-28413344 / 8535067
Fax No.:	91-44-28415325
E-Mail :	eskey@thehindu.co.in hindu@vsnl.com
Website :	http://www.hindu.com
Branches :	Located at: Bangalore, Kolkata, Coimbatore, Hyderabad, Kochi, Kozhikode, Madurai, Mumbai, New Delhi, Trichy, Trivandrum, Vizag, Patna and Vijayawada. Also located at: Bahrain, Brussels, Cape Town, Colombo, Islamabad, London, Singapore, Tokyo and Washington.

DIRECTORS

Name :	Mr. Srinivasan Rangarajan
Designation :	Chairman & Managing Director
Address :	7, Parthasarathy Garden, Chennai – 600018, Tamilnadu, India srangarajan@thehindu.co.in
Date of Birth/Age :	10.04.1936
Date of Appointment :	01.02.2002
Name :	Mr. Narasimhan Ram
Designation :	Director
Address :	43B Kasturi Ranga Iyengar Road, Chennai – 600018, Tamilnadu, India nram@thehindu.co.in
Date of Birth/Age :	04.05.1946
Date of Appointment :	21.06.2001
Name :	Mr. Narasimhan Murali
Designation :	Joint Managing Director
Address :	260A, TTK Road, Chennai – 600018, Tamilnadu, India nmurali@thehindu.co.in
Date of Birth/Age :	11.08.1946
Date of Appointment :	13.11.2000
Name :	Mr. Narasimhan Ravi
Designation :	Director
Address :	43A, Kasturi Ranga Iyengar Road, Chennai – 600018, Tamilnadu, India nravi@thehindu.co.in
Date of Birth/Age :	01.01.1948
Date of Appointment :	23.07.2005
Name :	Mrs. Nirmala Lakshmanan
Designation :	Director
Address :	30A, Kasturi Ranga Iyengar Road, Chennai – 600018, Tamilnadu, India nirmala@thehindu.co.in
Date of Birth/Age :	30.01.1954
Date of Appointment :	04.03.2001
Name :	Mrs. Nalini Krishnan
Designation :	Director
Address :	7A, Parthasarathy Garden, Chennai – 600018, Tamilnadu, India nalini@thehindu.co.in
Date of Birth/Age :	13.10.1956
Date of Appointment :	21.06.2001
Name :	Mrs. Parthsarathy Malini
Designation :	Director
Address :	280, J J Road, Chennai – 600 018, Tamilnadu malinip@thehindu.co.in
Date of Birth/Age :	15.08.1959
Date of Appointment :	21.06.2001
Name :	Mr. Ramesh Rangarajan
Designation :	Director
Address :	7, Parthasarathy Garden, Chennai – 600018, Tamilnadu rramesh@thehindu.co.in
Date of Birth/Age :	18.10.1959
Date of Appointment :	21.06.2001
Name :	Mr. Kasturi Venugopal
Designation :	Director
Address :	43/4, Kasturi Ranga Iyengar Road, Chennai – 600018, Tamilnadu kvenu@thehindu.co.in
Date of Birth/Age :	18.08.1957
Date of Appointment :	05.07.2005
Name :	Mr. Kasturi Balaji
Designation :	Director
Address :	43/4, Kasturi Ranga Iyengar Road, Chennai – 600018, Tamilnadu kbalaji@thehindu.co.in
Date of Birth/Age :	24.09.1955
Date of Appointment :	01.10.2000
Name :	Mr. Srikanth Lakshmi
Designation :	Director
Address :	60, First Main Road, R A Puram, Chennai – 600018, Tamilnadu lakshmi_239@yahoo.com
Date of Birth/Age :	23.09.1959
Date of Appointment :	05.07.2000
Name :	Mr. Akila Vijay Iyengar
Designation :	Director
Address :	15, Grange Road, HEX 28-17, Grange Heights, Singapore – 239696 vgi@pacific.net.sg
Date of Birth/Age :	20.06.1965
Date of Appointment :	05.07.2000

KEY EXECUTIVES

Name :	Mr. Kuppuswamy
Designation :	Company Secretary
Address :	18, Wason Street, T. Nagar, Chennai – 600017, Tamilnadu, India
Date of Birth/Age :	01.07.1941
Date of Appointment :	22.11.2002

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares
Vijayakumar Akila	2708
Ravi Aparna	4000
R. Ramesh & Ramesh Archit	8000
K Balaji	2500
Mr. Venu S Baladivya	5200
G Kasturi (HUF)	5944
G Kasturi	900
Kasturi Kamala	4492
M Krishna	4000
Murali Kanta	2000
Srinath Lakshmi	5440
Venugopal Lavanya	5200
Parthasarathy Menaka	13020
Parthasarathy Malini	10396
Balaji Madhumitha	11112
N Murali	1000
N Murli (HUF)	4080
Lakshman Nirmala	3592
Krishnan Nalini	2992
Krishnan Nalini and N. Krishnan Sriman Holding Private Limited	7000
Narayan Lakshman	3350
Narasimhan Ram (HUF)	6600
Narasimhan Ram	1000
Narasimhan Ravi (HUF)	200
Narasimhan Ravi	1000
Srinivasan Rangarajan	50
R. Ramesh and Ramesh Rohit	8000
R. Ramesh	5886
Narasimhan Santha	6372
Rangarajan Santha	14786
Sriram Lakshman	3350
Ravi Sudha	1000
Serrndipity Investment Private Limited	5400
Murali Tara	520
Narayanan Usha	2828
K. Venugopal [HUF]	612
K. Venugopal	2600
Arun Vijaya	4570
Ram Vidy a	4000
Akshay Krishnan	300
Total	176000

BUSINESS DETAILS

Line of Business :

The company acts as publishers. The company is engaged in printing, publishing and circulating of magazines and newspapers. It also acts as importers and exporters.

Products :

Product Description	ITC Code
The Hindu (daily)	490210.01
The Hindu Business Line (daily)	490510.01
The Sportstar (Weekly)	490290.02
Front line (Bi weekly)	490290.02

PRODUCTION STATUS

Particulars	Installed Capacity	Actual Production
Of 32 pages	140000	Production figures of publications other than The Hindu have not been given as they from less than 10 % of the total
Of 24 pages	505000
Of 8 pages	45000
Of 4 pages	36000

GENERAL INFORMATION

No. of Employees :

Around 1245

Bankers :

Central Bank of India

Corporate Finance Division, Addison Building, 802 Anna Salai, Chennai - 600 002, Tamilnadu, India

Facilities :

Secured Loan	Rs In Millions
Term Loans	562.541
Equipment Loan	1.715
Overdrafts	82.315
Total	646.571
Unsecured Loan
Fixed deposits	237.449
From a company	0.970
Short Term Loan
From Banks	120.192
From Others	1.200

Banking Relations :	Satisfactory
Auditors :
Name :	Brahmayya & Company Chartered Accountants
Address :	III Floor, 48, Masilamani Road, Balaji Nagar, Royapettah, Chennai – 600014, Tamilnadu, India
Subsidiaries :	Sporting Pastime India Limited till 18.08.2004
Associates :	Kasturi Estates Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
500000	Equity shares	Rs. 100/-	Rs. 50.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
176000	Equity shares	Rs. 100/-	Rs. 17.600 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		17.600	17.600	17.600
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		3015.207	2476.280	1966.400
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		3032.807	2493.880	1984.000
LOAN FUNDS
1] Secured Loans		1329.841	719.623	429.200
2] Unsecured Loans		225.778	359.811	312.300
TOTAL BORROWING		1555.619	1079.434	741.500
DEFERRED TAX LIABILITIES
TOTAL		4588.426	3573.314	2725.500
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2661.927	2498.280	1909.700
Capital work-in-progress		128.428	3.321	0.000
INVESTMENT		0.125	0.125	30.100
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	818.413	535.549	372.200
	Sundry Debtors	1093.600	922.777	875.200
	Cash & Bank Balances	579.148	387.439	316.700
	Other Current Assets	93.114	44.575	0.000
	Loans & Advances	1478.431	869.969	769.900
Total Current Assets		4062.706	2760.309	2334.000
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	919.237	676.854	862.100
	Provisions	1345.523	1011.867	686.200
Total Current Liabilities		2264.760	1688.721	1548.300
Net Current Assets		1797.946	1071.588	785.700
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		4588.426	3573.314	2725.500

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		5989.391	5012.078	4506.492
Other Income		105.456	79.395	66.714
Total Income		6094.847	5091.473	4573.206
Profit/(Loss) Before Tax		928.610	928.725	787.500
Provision for Taxation		324.460	322.500	340.000
Profit/(Loss) After Tax		604.150	606.225	447.500
Earnings in Foreign Currency :
	Exports of THE HINDU and other publications	NA	1.133	1.576
	Royalty	NA	12.857	11.330
	Other Earnings	NA	23.280	21.437
Total Earnings		NA	37.270	34.343
Imports :
	Raw Materials	NA	1004.378	674.571
	Stores & Spares	NA	48.440	28.428
	Capital Goods	NA	392.857	9.450
Total Imports		NA	1445.675	712.449
Expenditures :
	Newsprint, Paper, Ink consumed	0.000	0.000	1332.370
	News Gathering	0.000	0.000	91.736
	Commission	0.000	0.000	2.005
	Distribution	0.000	0.000	109.971
	Repairs and Renwals	0.000	0.000	95.946
	Raw Material Consumed	2208.080	1711.110	111.984
	Salaries, Wages, Bonus, etc.	1127.221	994.978	971.086
	Managerial Remuneration	34.282	31.609	0.000
	Payment to Auditors	0.449	0.442	0.000
	Interest	93.378	62.517	115.813
	Insurance Expenses	12.176	12.167	0.000
	Consumption of Power & Fuel	93.745	79.763	72.934
	Depreciation & Amortization	0.000	0.000	242.248
	Other Expenditure	1596.906	1270.162	513.739
Total Expenditure		5166.237	4162.748	3659.832

KEY RATIOS

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
PAT / Total Income	(%)	9.91	11.90	9.78
Net Profit Margin (PBT/Sales)	(%)	15.50	18.53	17.47
Return on Total Assets (PBT/Total Assets}	(%)	13.81	17.66	18.56
Return on Investment (ROI) (PBT/Networth)		0.31	0.37	0.40
Debt Equity Ratio (Total Liability/Networth)		1.26	11.10	1.15
Current Ratio (Current Asset/Current Liability)		1.79	1.63	1.51

LOCAL AGENCY FURTHER INFORMATION

HISTORY

The company was incorporated on 5^th December 1959 at Chennai in Tamilnadu having Company Registration Number 1091.

The Hindu, started in 1878 as a weekly, became a daily in 1889 and from then on has been steadily growing to the current circulation of over 4,00,000 copies and a readership of over 3 millions.

The Hindus independent editorial stand and its reliable and balanced presentation of the news have over the years, won for it the serious attention and regard of the people who matter in India and abroad.

The Hindu uses modern facilities for news gathering, page composition and printing. It is printed in eight centres apart from the Main Edition at Chennai (Madras) where the Corporate Office is based. The printing centres at Coimbatore, Bangalore, Madurai, Hyderabad, New Delhi, Vizag, Thiruvanathapuram and Kochi are connected with high speed data lines for news transmission across the country.

FIXED ASSETS

Ø Leasehold Land

Ø Freehold Land

Ø Building

Ø Plant and Machinery

Ø Electrical Installations

Ø Office Machinery

Ø Furniture

Ø Vehicles

Bankers Charges Report as per Registry

Name of the company	KASTURI AND SONS LIMITED
Presented By	KASTURI AND SONS LIMITED
1) Date and description of instrument creating the change	Letter of Hypothecation dated 18.11.2005
2) Amount secured by the charge/amount owing on the securities of charge	Term Loan Rs. 1100.000 Millions
3) Short particular of the property charged. If the property acquired is subject to charge, date of the acquired of the property should be given	First charge on movable assets of the company on a paripassu basis with ICICI Bank Limited and HDFC Bank Limited except Rs. 75.000 Millions charged to Central Bank of India towards CtP Project.
4) Gist of the terms and conditions and extent and operation of the charge.	Interest @ 7.25 % p.a. Repayable in 20 quarterly instalments.
5) Name and Address and description of the person entitled to the charge.	Central Bank of India Addison Buildings 803, Anna Salai Chennai – 600002
6) Date and brief description of instrument modifying the charge	NA
7) Particulars of modifications specifying the terms and conditions or the extent of operations of the charge in which modification is made and the details of the modification.	NA

Retirement Benefits

Contributions to the provident fund are made monthly at predetermined rates to the provident fund authorities for eligible person and accounted on accrual basis.

The company covered its Gratuity liability under Group Gratuity Scheme, administered by The Life Insurance Corporation of India. Contributions to the scheme is made based on the actuarial valuation made by LIC.

Earned leave are accrued and provided for on the basis of actuarial valuation made at the end of each financial year and charged off to revenue.

Contingent Liabilities

Claims against the Company by customs amounting to Rs. 3.807 Millions. As per order dated 30.09.2004. the Deputy Commissioner demanded duty, towards import of Facsimile Equipment, of Rs. 3.807 Millions and interest under section 28 AB of Customs Act.

In respect of Guarantees given on behalf of Sporting Pastime India Limited Rs. 150.000 Millions

The Sales Tax on lease rental relating to leasing of certain items of machinery, claimed by a financial institutions from April 1998 amounted to Rs. 6.616 Millions is being disputed based on the latest Supreme Court judgement.

The company obtained stay order against the levy of entry tax by Tamilnadu Government on imported Newsprint. The amount involved Rs. 99.691 Millions

The company has filed a petition in Chennai High Court against the revised property tax and water tax rates. The amount involved Rs. 0.488 Millions.

An agreement was made with a buyer for disposing of the shareholding and to transfer controlling and Management interest in Sporting Pastime India Limited, a wholly owned subsidiary of the Company. As per the agreement, the Share Capital of SPIL was increased from Rs. 30.000 Millions to Rs. 270 Millions, out of which 90 % of Shares Capital of SPIL was transferred in August, 2004 whereby the controlling and Management vested with the buyer. As the buyer did not fulfil SPIL’s financial obligations as required by the terms of the agreement and by virtur of being a continuing guarantor, Kasturi and Sons Limited has met the liabilities to the tune of Rs. 140.800 Millions as at 31.03.2005 and future amount of Rs. 155.100 Millions till 31.07.2005. The total amount recoverable from SPIL as at 31.07.2005 is Rs. 295.900 Millions. There are no further obligations under guarantees.

The matter is now in the High Court of Madras which granted an interim injection restraining SPIL form transferring. Encumbering, alienating or selling its properties without the prior permission of the High Court. The High Court has also appointed an Interim Receiver. Another petition has been filed in the Madras High Court seeking directions to lodge the Title Deeds and Share Certificates with the High Court.

In the opinion of the Management, the assets of SPIL are adequate to meet the liabilities and hence no provision is considered necessary.

The 90 % share holding of SPIL amounting to Rs. 243 Millions was sold for Rs. 24.300 Millions and a loss of Rs. 218.700 Millions has been incurred by Kasturi and Sons Limited. The either provisions made to the extent of Rs. 193 Millions have been set of against the loss and the net deficit of Rs. 25.700 Millions has been debited to Profit and Loss account during the current financial year.

The company is publishing the following:

v The Hindu Business Line – Business Daily

v The Hindu International Edition - Weekly

v The Sportstar – Weekly Sports Magazine

v Frontline – Fortnightly Features Magazine

v Praxis – Quarterly Journal on Management

v Survey of Indian Industry – An annual review of Indian Industries

v Survey of Indian Agriculture - An annual review of Indian Agriculture

v Survey of the Environment - An annual review of Environment

v Indian Cricket – An annual record book of Cricket

v The Hindu Index – Monthly and Cummulated Annual

v Special Publications under the series The Hindu Speaks On Liabraries: Information Technology, Management, Education, Religious Values and Music.

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 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.44.27
UK Pound	1	Rs.85.54
Euro	1	Rs.58.23

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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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