MIRA INFORM REPORT

Report Date :

29.05.2007

IDENTIFICATION DETAILS

Name :	TASTY BITE EATABLES LIMITED
Registered Office :	204, Mayfair Towers, Wakdewadi, Shivajinagar, Pune 411005, Maharashtra
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	02.09.1985
Com. Reg. No.:	11-37347
CIN No.: [Company Identification No.]	L15419PN1985PLC037347
TAN No.: [Tax Deduction & Collection Account No.]	PNET03922C
PAN No.: [Permanent Account No.]	AAACT2317A
Legal Form :	Public limited liability company. Company’s Shares are listed on Stock Exchange.
Line of Business :	The company has four broad business divisions viz. Ready-to-Serve Foods, Old Storage, Green Peas Processing and a Farm.

RATING & COMMENTS

MIRA’s Rating :

Ba

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 450000
Status :	Satisfactory
Payment Behaviour :	Slow but correct
Litigation :	Clear
Comments :	The company has four broad business divisions viz. Ready-to-Serve Foods, Old Storage, Green Peas Processing and a Farm. Ready-to-use foods production in the core business of the company. Financial position at present is not comfortable as it has some accumulated losses. However, the company’s performance is improving gradually. Trade relations are reported as fair. Payments are currently slow but correct. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	204, Mayfair Towers, Wakdewadi, Shivajinagar, Pune 411005, Maharashtra, India
Tel. No.:	91-20-25510685
Fax No.:	91-20-50625331 / 25512695
E-Mail :	prashant@tastybite.com
Website :	http://www.tastybite.com
Factory 1 :	Khutbhao and Bhandgaon Village, Taluka Daund, Pune-412214, Maharashtra, India

DIRECTORS

Name :	Mr. Ashok Vasudevan
Designation :	Chairman
Name :	Mr. Ravi Nigam
Designation :	Executive Director
Qualification :	Masters in Rural Managements
Previous Employment:	Chief General Manger, Ballarpur Industries Limited
Name :	Mrs. Meera Vasudevan
Designation :	Director
Name :	Mr. K. P. Balasubramaniam
Designation :	Director
Name :	Dr. V. S. Arunachalam
Designation :	Director
Name :	Mr. Sohel Shikari
Designation :	Alternate Director

SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters' Holding
Promoters
Indian Promoters	19,04,510	74.22 %
Sub-Total	19,04,510	74.22 %
Non-Promoters Holding
Institutional Investors
Foreign Institutional Investor's ( Fll's)	14686	0.57 %
Sub-total	14686	0.57 %
Private Corporate Bodies	64541	2.52 %
Indian Public	576811	22.48 %
Non-Resident Indians ( NRIs)/ Overseas	3202	0.12 %
Clearing	2250	0.09 %
Sub-total	646804	25.21 %
GRAND TOTAL	2566000	100.00 %

BUSINESS DETAILS

Line of Business :

The company has four broad business divisions viz. Ready-to-Serve Foods, Old Storage, Green Peas Processing and a Farm.

Products :

Product Description	ITC Code No
Ready to Serve Meals Fresh Frozen vegetables and fruits Processing Charges and Cold Storage Rentals	20059000

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Ready to Serve Foods	MT	5000	2.024
Frozen Vegetables	MT	10000	--

GENERAL INFORMATION

No. of Employees :

200

Bankers :

Ø ICICI Bank Limited

Ø Indusind Bank Limited

Ø State Bank of India

Ø Union Bank of India

Ø Bank of Maharashtra

Ø Exim Bank of India

Ø Shamrao Vithal Co-operative Bank Limited

Facilities :

SECURED LOANS	Rs in Millions
BORROWINGS FROM BANKS
Loan from PBI	19.188
Note: Borrowings are secured by way of: a) A first priority charge by way of mortgage of the Company's entire stocks of raw materials, semi finished goods, finished goods, consumabfe stores and such other movables including book-debts, outstanding monies, receivables, both present and future. b) First priority charge and mortgage of all the movable and immovable properties of the Company. c) Personal guarantees of some Directors of the Company.
UNSECURED LOANS
Inter Corporate Deposit	5.000
Interest Accrued and Due	0.368
Total	5.368

Banking Relations :	Satisfactory
Auditors :
Name :	Kalyaniwalla and Mistry Chartered Accountant
Holding Company :	Preferred Brands Foods India Private Limited.
Ultimate Holding Company :	Preferred Brands International, Llc
Associates/Subsidiaries :	Preferred Brands Australlia Pty. Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
4400000	Equity Shares	Rs. 10 Each	Rs. 44.000 Millions
60000	1% Non-Cumulative, Non Convertible Redeemable Preference Shares	Rs. 100 Each	Rs. 6.000 Millions
	Total		Rs. 50.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2566000	Equity Shares	Rs.10 Each	Rs. 25.660 Millions
59530	1% Non-Cumulative, Non Convertible Redeemable Preference Shares	Rs. 100 Each	Rs. 5.953 Millions
	Total		Rs. 31.613 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		31.613	31.613	31.613
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		131.292	131.292	131.292
4] (Accumulated Losses)		(48.889)	(54.470)	(51.788)
NETWORTH		114.016	108.435	111.117
LOAN FUNDS
1] Secured Loans		19.188	52.827	36.586
2] Unsecured Loans		5.368	22.249	11.718
TOTAL BORROWING		24.556	75.076	48.304
DEFERRED TAX LIABILITIES
TOTAL		138.572	183.511	159.421
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		44.352	46.311	51.110
Capital work-in-progress		18.893
INVESTMENT		0.050	0.050	0.050
DEFERREX TAX ASSETS		1.035	9.129	7.654
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	29.270	24.872	29.490
	Sundry Debtors	76.424	133.055	99.509
	Cash & Bank Balances	5.215	2.220	2.111
	Other Current Assets	0.017	0.017	0.074
	Loans & Advances	37.943	30.709	22.315
Total Current Assets		148.869	190.873	153.499
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	71.564	59.966	49.322
	Provisions	3.099	2.939	3.640
Total Current Liabilities		74.663	62.905	52.962
Net Current Assets		74.206	127.968	100.537
MISCELLANEOUS EXPENSES		0.036	0.053	0.070
TOTAL		138.572	183.511	159.421

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		225.913	203.896	133.945
Other Income		42.353	25.37	--
Total Income		268.266	229.266	133.945
Profit/(Loss) Before Tax		16.732	(4.048)	(27.122)
Provision for Taxation		8.476	(1.474)	(7.581)
Profit/(Loss) After Tax		8.256	(2.574)	(19.541)
Earnings in Foreign Currency :
	Export Earnings	188.823	173.228	87.398
	Interest Earnings	1.796	2.734	6.283
Total Earnings		190.619	175.962	93.681
Imports :
	Raw Materials	0.929	1.996	0.000
	Capital Goods	11.315	0.000	0.000
	Packing Materials	20.276	18.265	11.546
	Plant And Machinery	0.000	0.000	0.147
Total Imports		32.520	20.261	11.693
Expenditures :
	Material Consumed	129.893	113.266	65.067
	Manufacturing and Other Expenses	107.116	94.824	87.312
	Interest and Finance Charges	7.718	10.469	7.077
	Depreciation	6.493	7.004	6.950
	Inventory Change	0.314	7.751	(5.339)
Total Expenditure		251.534	233.314	161.067

SUMMARISED RESULTS

PARTICULARS	31.03.2007
Type	Full Year
Sales Turnover	304.300
Other Income	3.200
Total Income	307.500
Total Expenditure	285.200
Operating Profit	22.300
Interest	3.200
Gross Profit	19.100
Depreciation	6.700
Tax	0.500
Reported PAT	8.700
Dividend (%)	0.000

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt Equity Ratio	0.45	0.56	0.35
Long Term Debt Equity Ratio	0.17	0.11	0.02
Current Ratio	1.68	1.60	1.69
TURNOVER RATIOS
Fixed Assets	1.90	1.74	1.00
Inventory	8.84	7.86	4.84
Debtors	2.29	1.84	1.12
Interest Cover Ratio	3.18	0.61	(2.82)
Operating Profit Margin (%)	12.94	6.27	(10.80)
Profit Before Interest and Tax Margin (%)	10.23	2.99	(16.49)
Cash Profit Margin (%)	6.18	2.06	(10.39)
Adjusted Net Profit Margin (%)	3.46	(1.22)	(16.08)
Return on Capital Employed (%)	12.85	--	--
Return on Net Worth (%)	6.15	--	--

STOCK PRICES

Face Value	Rs.10.00/-
High	Rs.[0.01]
Low	Rs.[0.01]

LOCAL AGENCY FURTHER INFORMATION

FIXED ASSETS

• Freehold Land
• Buildings
• Plant and Machinery
• Office Equipment
• Computers
• Furniture and Fixtures
• Vehicles

OPERATIONS

The Significant developments in the Company during the year 2005-06 are as follows: 

1. Gross Revenues have grown to Rs. 268.300 Millions in 2005-06 up from Rs. 229.300 Millions 2004-05, a growth of 17%. 

2. Export Sales have grown to Rs. 212.900 Millions in 2005-06 up from Rs. 189.900 Millions in 2004-05, a growth of 12%. 

3. The company made a Profit before depreciation, financial costs and taxes (EBITDA) of Rs. 30.90 Millions in 2005-06 as against a profit of Rs. 13.400 Millions in 2004-05. 

4. The Company made a profit after-tax of Rs. 5.581 Millions in 2005-06 as against a loss of Rs. 2.682 Millions in 2004-05. 

ADOPTION OF A COMPANY MISSION STATEMENT

As is highlighted in our Chairman's speech in the annual report, at the beginning of the past financial year, the company formally adopted a new mission statement, reflecting a strategic shift in the company's direction mainly aimed at securing a sustainable and global competitive edge. Throughout the year, a concerted attempt has been made to completely align all management functional areas with the new mission statement. 

The Mission statement adopted by the Company is as under: 

Be a value driven company providing attractive returns to its shareholders thru Manufacturing and marketing Natural, convenient, specialty food and food intermediates That offer customers Great Taste, good value, a wide range and high-speed response Achieved through Product and process innovation, low-cost manufacturing, versatility and customer partnerships In a Knowledge driven, fun and energetic work environment. 

The mission statement was drafted after recognizing industry mega trends in the foods sector i.e. the pronounced preference for natural, convenient and specialty foods in all international markets. This also led us to identify five competitive advantages that we believe will help establish us as an industry leader in our chosen segment. 

- Product and Process innovation- Low Cost Manufacturing- Integration- Versatility- Customer Partnership 

Results of this focused strategy have begun to yield results with a top line growth of 17% during the year. This was achieved through expansion of the company's product offerings, increased presence in key markets, and strategic investments in the Tasty Bite Research Centre (TBRC). The momentum generated by the new mission statement and the implementation of the resultant strategy is expected to produce sustained growth in both revenues and profitability over the next few years. 

FREIGHT COSTS

On account of spiralling petroleum prices, sea freight to major destinations across the world increased. The company continued negotiations with several freight companies and freight consolidators throughout the year to contain costs. This resulted in 'block booking' and has helped bring down freight costs once again - the benefits of which will be seen next year.

FUEL AND ELECTRICITY COSTS

The company experienced a sharp rise in the cost of both power and fuel. While power was on account of increase in the 'maximum demand charges' imposed by the Maharashtra Electric Supply Board, furnace oil prices increased as a result of an overall increase in petroleum prices.

The company has now re-configured its frozen vegetable processing activities, by carrying out most of its frozen processing at night, when the electric levy is the lowest. The company has also recognized the long-term problem

of increasing costs of petroleum and has decided to switch to a brickett-fired boiler. Brickettes are compacted from agriculture waste, are eco-friendly and have a significantly lower operational cost. This conversion should be

completed soon, and will help significantly reduce the cost of utilities.

QUALITY

The Company's stated mission for quality is to "rise beyond certifications". While the company is already ISO-9001/2000, HACCP (Hazard Analysis & Critical Control Points) and ISO-14001 compliant, the company is now intending to start an integrated Quality Management System (QMS). This will simultaneously address, issues of quality, food safety, environment, people safety and health. The Integrated QMS will go on line by October 2006. But perhaps, the most significant development was the C-TPAT certification that our parent company Preferred Brands International (FBI) received earlier this year. The Customs Trade Partnership against Terrorism (C-TPAT) is a joint initiative to provide global supply chain security. This certification was largely made possible by the tremendous work done by Tasty Bite in India working closely with our suppliers, vendors, and service providers to ensure a well documented and secure supply chain

ENVIRONMENT

The Company is committed towards preserving the environment and is looking at ways to reduce effluent discharge as well as effectively treat wastewater to reduce the biological and chemical oxygen demands. It has been successfully using biological agents in its effluent treatment plant now for the past two years. Now an integrated approach towards segregation of solid waste/ oil and grease even before effluent reaches the ETP will

further improve efficiency of Effluent treatment. This will enable Tasty Bite keep up to its objectives of re-cycling 100% of the water used in the factory.

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.40.64
UK Pound	1	Rs.80.44
Euro	1	Rs.54.65

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	4
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	4
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	4
--RESERVES	1~10	4
--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	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		41

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	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