MIRA INFORM REPORT

 

 

Report Date :

26.09.2007

 

IDENTIFICATION DETAILS

 

Name :

SHERVANI SUGAR SYNDICATE LIMITED

 

 

Registered Office :

332 Shervani Nagar, Sulem Sarai, Harwara, Allahabad – 211 001, Uttar Pradesh

 

 

Country :

India

 

 

Financials (as on) :

30.09.2006

 

 

Date of Incorporation :

29.01.1954

 

 

Com. Reg. No.:

20-2529

 

 

CIN No.:

[Company Identification No.]

U15429UP1954PLC002529

 

 

TAN No.:

[Tax Deduction & Collection Account No.]

AGRS12858G / ALDS00513C

 

 

PAN No.:

[Permanent Account No.]

AADCS3658L

 

 

Legal Form :

A Closely Held Public Limited Liability Company

 

 

Line of Business :

Manufacturer and Exporters of Sugar and Molasses.

 

 

RATING & COMMENTS

 

MIRA’s Rating :

Ca

 

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

 

Maximum Credit Limit :

--

 

 

Status :

Sick Unit

 

 

Payment Behaviour :

Slow

 

 

Litigation :

--

 

 

Comments :

Subject is a Sick Unit. Its network has been eroded. Payments are reported as slow and delayed, the company can be considered for any business dealings on fully safe and secured trade terms and conditions, only.

 

 

LOCATIONS

 

Registered Office :

332 Shervani Nagar, Sulem Sarai, Harwara, Allahabad – 211 001, Uttar Pradesh, India

E-Mail :

shervanisugar@rediffmail.com

 

 

Factory  :

Located at :

s         Neoli Sugar Factory

s         Neoli Farm

 

 

DIRECTORS

 

Name :

Mr. A. N. Shervani

Designation :

Chairman Emeritus

 

 

Name :

Mr. A. Q. Khan

Designation :

Chairman and Managing Director

 

 

Name :

Mr. T. Hasan

Designation :

Vice Chairman

 

 

Name :

Mr. F. G. H. Merchant

Designation :

Senior Vice Chairman

 

 

Name :

Mr. A S Mann

Designation :

Whole Time Director

 

 

Name :

Mr. S I Shervani

Designation :

Director

 

 

Name :

Mrs. Z Hasan

Designation :

Director

 

 

Name :

Mr. A Chopra

Designation :

Director

 

 

Name :

Mrs. R F Merchant

Designation :

Director

 

 

Name :

Mr. G S Chaturvedi

Designation :

Director

 

 

KEY EXECUTIVES

 

Name :

Mr. U K Jaiswal

Designation :

Chief General Manger

 

 

Name :

Mr. A Sankhla

Designation :

General Manager – Cane

 

 

Name :

Mr. O N Mehta

Designation :

Deputy General Manager – Engineering

 

 

Name :

Mr. A K Mukherji

Designation :

Chief Chemist

 

 

Name :

Mr. I A Khan

Designation :

Company Secretary

 

 

BUSINESS DETAILS

 

Line of Business :

Manufacturer and Exporters of Sugar and Molasses.

 

 

Products :

Sugar and Molasses.

 

PRODUCTION STATUS

 

Particulars

Unit

Licensed Capacity

Installed Capacity

Actual Production

 

 

 

 

 

Sugar

Qtls

--

25000

322254

Molasses

Qtls

--

25000

168722

 

 

GENERAL INFORMATION

 

No. of Employees :

--

 

 

Bankers :

s         State Bank of India

s         Union Bank of India 

 

 

Facilities :

Secured Loan

(Rs. in millions)

 

30.09.2006

30.09.2005

Debentures

0.016

1.994

Sugar Development Fund

113.341

100.951

Cash credit account with State Bank of India

44.744

0.415

Vehicle Loan

--

0.278

Total

158.102

103.638

 

Unsecured Loan

(Rs. in millions)

 

30.09.2006

30.09.2005

Loan from KMA Limited

1.813

1.813

Advance from Shervani Industrial Syndicate Limited

135.646

136.235

Fully Convertible Debentures issued to Shervani Industrial Syndicate Limited

100.000

100.000

Loan from Chairman and Managing Director

5.700

5.700

Bank Overdraft

78.750

78.750

Total

321.909

322.498

 

 

 

Banking Relations :

--

 

 

Auditors :

 

Name :

P L Tandon and Company

Chartered Accountants

Address :

Westcott Building, Mahatma Gandhi Road, Kanpur – 208 001, Uttar Pradesh, India

 

 

Group Companies :

s         Shervani Industrial Syndicate Limited

s         Tara Snacks and Foods Limited

 

 

CAPITAL STRUCTURE

 

Authorised Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

10,010

7% Redeemable Preference Shares

Rs.100/- each

Rs. 1.001 million

39,990

1 4% Cumulative Preference Shares

Rs.100/- each.

Rs. 3.999 millions

2,04,80,000

Ordinary Shares

Rs. 10/- each

Rs. 204.800 millions

80,000

Deferred Shares

Rs. 2.50/- each

Rs. 0.200 million

 

Total

 

Rs. 210.000 millions

 

Issued, Subscribed & Paid-up Capital :

No. of Shares

Type

Value

Amount

 

 

 

 

10,010

7% Redeemable Preference Shares

Rs.100/- each

Rs. 1.001 million

2,03,74,310

Ordinary Shares fully paid up

Rs. 10/- each

Rs. 203.743 millions

80,000

Deferred Shares

Rs. 2.50/- each

Rs. 0.200 million

Add :

Forfeited Shares

 

Rs. 0.003 million

 

Total

 

Rs. 204.947 millions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FINANCIAL DATA

[all figures are in Rupees Millions]

 

ABRIDGED BALANCE SHEET

 

SOURCES OF FUNDS

 

 

30.09.2006

30.09.2005

SHAREHOLDERS FUNDS

 

 

 

1] Share Capital

 

204.947

204.947

2] Reserves & Surplus

 

45.937

45.937

4] (Accumulated Losses)

 

(322.539)

(349.329)

NETWORTH

 

(71.655)

(98.445)

LOAN FUNDS

 

 

 

1] Secured Loans

 

158.102

103.638

2] Unsecured Loans

 

321.909

322.498

TOTAL BORROWING

 

480.011

426.136

 

 

 

 

TOTAL

 

408.356

327.691

 

 

 

 

APPLICATION OF FUNDS

 

 

 

 

 

 

 

FIXED ASSETS [Net Block]

 

235.439

246.482

Capital work-in-progress

 

0.562

0.297

 

 

 

 

INVESTMENT

 

0.044

0.044

 

 

 

 

CURRENT ASSETS, LOANS & ADVANCES

 

 

 

 

Inventories
 

168.479

98.187

 

Sundry Debtors
 

2.716

1.207

 

Cash & Bank Balances
 

46.721

34.283

 

Other Current Assets
 

4.292

4.285

 

Loans & Advances
 

28.265

26.748

Total Current Assets
 

250.473

164.710

Less : CURRENT LIABILITIES & PROVISIONS
 

 

 

 

Current Liabilities and Provisions
 

78.162

83.842

Total Current Liabilities
 

78.162

83.842

Net Current Assets
 

172.311

80.868

 

 

 

 

TOTAL

 

408.356

327.691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PROFIT & LOSS ACCOUNT

 

PARTICULARS

 

 

30.09.2006

30.09.2005

Sales Turnover

 

559.651

520.511

Other Income

 

69.754

(85.571)

Total Income

 

629.405

434.940

 

 

 

 

Profit/(Loss) Before Tax

 

33.970

25.968

Provision for Taxation

 

0.230

0.086

Profit/(Loss) After Tax

 

33.740

25.882

 

 

 

 

Expenditures :

 

 

 

 

Raw Material Consumed

 

448.372

285.989

 

Depreciation & Amortization

 

16.396

16.209

 

Other Expenditure

 

130.665

106.773

Total Expenditure

 

595.433

408.971

 

 

KEY RATIOS

 

PARTICULARS

 

 

 

30.09.2006

30.09.2005

PAT / Total Income

(%)
 

5.36

5.95

 

 
 

 

 

Net Profit Margin

(PBT/Sales)

(%)
 

6.07

5.00

 

 
 

 

 

Return on Total Assets

(PBT/Total Assets}

(%)
 

6.98

6.31

 

 
 

 

 

Return on Investment (ROI)

(PBT/Networth)

 
 

(0.47)

(0.26)

 

 
 

 

 

Debt Equity Ratio

(Total Liability/Networth)

 
 

(6.78)

(4.18)

 

 
 

 

 

Current Ratio

(Current Asset/Current Liability)

 
 

3.20

1.96

 

 

LOCAL AGENCY FURTHER INFORMATION

 

Operation Review :

 

The crushing operations for the sugar season 2005-2006 commenced on the 28th of November, 2005 and closed

on 13th of April, 2006. The comparative operational results for the last two seasons are as under :

 

 

2005-2006

2004-2005

Cane Crushed (Qtls)

35,35,139

24,66,919

Sugar Produced (Qtls)

3,22,254

2,22,178

Recovery (%)

9.12

9.01

Gross Season (Days)

137

116

 

 

 

 

The industry expected an improved season over the previous year but with intense competition for cane. At

the same time there were reports of a low recovery year from mills that had started early. They therefore delayed start to the last week of November. At the same time they spared no efforts to improve communication of a better season to farmers in gate and centres in order to protect our area from poaching.

 

The season started well for us and they kept the pressure of cane on mills constantly. At the same time, efforts during the off season showed results with downtime under 3% during the first half of the season. As a result, capacity utilization of mill was very good and for the first time they achieved a record crush of over 0.900 millions quintals for a month, with an average daily crush of 29500 per day in January (see Table 1).The result is remarkable as most mills experience shortage of cane during this month. There were reports of poaching as well as announcement of increase in cane price by some mills. However, they were able to manage these pressures on account of their continued communication with farmers, fair calendaring and consistent indenting. They also improved the management information system at their centres to learn of cane diversion early and take appropriate measures.

 

As the season progressed and reports of cane diversion continued, it was felt by the management to provide a Subsidy to farmers who supply sugarcane after February. From March onwards, farmers have to not only irrigate their fields but also pay higher lab their cost for harvesting cane. A subsidy to cover this extra cost, boost their morale for increase planting, and encourage holding cane during high recovery period was announced by company in mid February. This was met with great joy and helped curtail poaching from their area. As a result the mill continued to run under pressure from cane for the entire month of February as well as most of March. Their February average crush of 28496 Qtls. per day was the highest for the month during the last five seasons.

 

Average Daily Crush :

 

 

2001-02

2002-03

2003-04

2004-05

2005-06

December

21252

13603

25377

28194

27260

January

22977

25687

28719

22058

29527

February

20811

26329

27341

17264

28496

March

17961

26316

16574

388

16987

April

7603

19733

0000

0000

0000

 

At the same time recoveries were far from satisfactory. But this situation was not unique. Reports of low recovery came from all over Uttar Pradesh. This has been the only operational drawback for the year. Otherwise, factory had a good run.

 

With total domestic production expected around 165 lakh tonnes, market sentiments moved sugar prices up as early as February 2006. The domestic sentiments were also fuelled by speculation over trend of global prices for commodities in general and sugar in particular. Prices moved from late Rs 0.017 million levels per tonne to over Rs. 0.020 million. This further intensified competition for cane and many mills increased prices for sugarcane over and above the SAP. However, by mid February market sentiments had sobered down considerably and prices stabilized around Rs 17,000-17,500 levels per tonne. This ensured good price parity between sugarcane and sugar resulting in a good financial performance this year. Unfortunately, during the current year this parity has been adversely affected. Sugar prices have crashed to levels of Rs 14,500 per tonne on account of a large expected production of sugar and the State Government inspite of weak sentiment on sugar hiked sugarcane prices by Rs 10 per quintal. They expect a large loss during current year if sugar prices do not improve.

 

 

PLANNING AHEAD

 

Company is making efforts to provide farmers with support for sugarcane management by helping them procure seeds for sowing and providing better service for gate farmers. At the same time a new factory has come up in Gunnaur and the sugarcane department of the State Government has allocated many of our reserved centres to this factory. They have appealed to the government to reconsider its decision. No decision has been taken as of now.

 

To improve operational.performance, the company is taking steps to balance the boiling house and provide some stand by machines. Cane grabbers will be made hydraulic to save energy. Further, the company is spending money to improve instrumentation at all levels and areas of the factory. Automation in some areas like bagasse and sugar bagging is also underway.

 

 

CURRENT SEASON

 

The Crushing Operations of the Season 2006-07 started on 21st November,2006 and are progressing satisfactorily. The plant is working efficiently. The Factory has crushed about 20 lakh quintal of sugar cane till the end of January '07 at an average recovery of 9%. The management hopes that the quantity of cane crushed and recovery percentage will be better than the previous season. It is unfortunate for the entire industry that sugar price has fallen below Rs 1500 per quintal which is nearly 20% less than previous season. Inspite of this, the Central Government delayed opening exports. They have allowed it recently when global prices have also become unattractive. At the same time, the State Government without considering any market or long term factors increased the price of sugar cane by Rs 10 per quintal. It is expected that most factories will register losses this year.

 

 

SICK INDUSTRIAL COMPANIES (SPECIAL PROVISIONS) ACT, 1985

 

In the hearing held by AAIFR on 29.07.2005 the windup order was revoked and the matter was remanded to BIFR with the direction that the Draft Rehabilitation Scheme be examined after issue of notice to the interested parties and further action taken in accordance with law as expeditiously as possible. Subsequently BIFR has enquired about the status of Draft Rehabilition Scheme from the Company and Operating Agency (OA). OA informed BIFR that the circulated Draft Rehabilitation Scheme had already been submitted to the Honourable Members of the Bench.

 

 

INDUSTRIAL RELATION

 

During the year employee relations continued to remain cordial and productive. All worked hard to ensure the season's success. The Directors wish to place on record their appreciation of the contribution made by Company's employees at all levels during the period under review.

 

The Company’s Fixed Assets of important value includes:

 

s         Land

s         Buildings

s         Plant and Machinery

s         Furniture and Fixture

s         Fire Arms

s         Motor Vehicles

 

CONTINGENT LIABILITIES NOT PROVIDED FOR

 

(a) Claims against the Company not acknowledged as debts-amount indeterminate.

(b) Guarantee given by Bank for which Company has given counter guarantee-Rs. 0.495 million (Previous year

     Rs.0.495 million).

(c) Provision has not been made in respect of disputed liabilities for salary and wages for Lay-Off period from     

     04.03.1994 to 24.11.1994, matter pending with Industrial Tribunal- amount indeterminate.

(d) Arrears of cumulative dividends in respect of 10,010  -7.77% Redeemable Preference Shares for the      

     Accounting Years 1977-78 to 2005-06 - Rs. 1.664 million (Previous year Rs. 1.586 million)

(e) Estimated amount of contracts remain to be executed on capital account and not provided for Rs.2.879 million

     (Previous year Nil).

(f) The Preference Shares will be redeemed as per directives of BIFR Scheme.

(g) Pursuant to BIFR directives, State Bank of India has charged interest at PLR instead of rate applicable     

     based on credit rating of the Company. Further BIFR has granted that State Bank of India would be eligible

     for the right to recompense subject to approval of BIFR.

 

The company had realised additional Levy Price @ Rs.26 per quintal in the previous accounting years on the basis of interim orders granted by the Hon'ble High Court, Delhi. If the ultimate decision of the High Court/ Supreme Court goes against the Company, the additional Levy Price already realised and credited to the Profit & Loss Account in different accounting years amounting to Rs.6.304 million plus interest thereon @ 12% per annum will become refundable. No provision for the total amount consisting of additional Sale Price Rs. 6.304 million and

interest thereon has been made.

 

In respect of the aforesaid amount the company has provided bank guarantees against which fixed deposits of Rs.19.660 million have been pledged with the Bank on which interest to the tune of Rs. 2.035 million had been accrued up to 30.09.2006.

 

Another amount of Rs.1.809 million being a part of such levy price which could not be recovered had been debited to Levy Sugar Price recoverable account and credited to Profit & Loss Account in earlier accounting years. 6. The Rehabilitation Scheme formulated and circulated by Appellate Authority for Industrial and Financial Reconstruction (AAIFR) proposes and recommends full waiver of the entire interest, penalties and all other charges accrued on Term Loan from Sugar Development Fund (SDF), Govt. of India. The Govt. of India vide letter dated 28.07.2005 informed AAIFR that the waiver of interest and the re-scheduling of loan as proposed in the Draft Rehabilitation Scheme is under consideration of the Ministry. The Ministry has requested for time to finalise the same. Therefore provision of interest amounting to Rs.7.970 million on loan for the period from 1.10.2005 to 30.9.2006 has not been made. Intrest accrued and due and intrest accrued but not due on S D F loan has been computed on the basis of Rehabilitation Scheme.

 

In view of losses incurred by the Company resulting in accumulated losses exceeding its net worth, the Company was declared a 'Sick Industrial Unit' by Board for Industrial and Financial Reconstruction (BIFR) u /s 3(1 )(o) of Sick Industrial Companies (Special Provisions) Act,1985 (SICA). The BIFR has sanctioned a Rehabilitation Scheme on 16.10.1995 for revival of the Company.

 

On 26.09.2001, BIFR sanctioned a Modified Draft Rehabilitation Scheme (MDRS) and circulated the same on 02.01.2002. The MDRS envisaged that the net worth of the Company would turn positive by the year 2002 and the Company would meet its financial obligations by the year 2006-07. But the net worth of the Company could not turn positive as envisaged. In the hearing held on 22.09.2003, BIFR concluded that the Sanctioned Scheme had failed and recommended winding up of the Company under Section 20(1) of SICA. The Company filed an appeal against the said order passed by BIFR before the Appellate Authority for Industrial and Financial Reconstruction,

 

New Delhi (AAIFR). The Company argued that it was meeting all its financial obligation and its operations had improved. The MDRS should therefore be extended with some revisions. The AAIFR stayed the proceedings under the impugned BIFR order till the disposal of the Appeal. AAIFR further directed the OA to prepare and submit a modified Draft Rehabilitation Scheme (DRS). After obtaining the consent of all the concerned agencies Operating Agency submitted the DRS to AAIFR on 16.02.2005.At the hearing convened on 21.02.2005, the AAIFR issued directive to circulate the scheme prior to sanction. OA circulated the DRS to all concerned agencies and also published the same in newspapers. But the Scheme could not be sanctioned because the Sugar Directorate, Ministry of Consumer Affairs, Food and Public Distribution has requested for time for consent of the terms of interest waiver.

 

AAIFR has now remanded the case to BIFR (vide its Order dated 29.07.2005, received on 06.09.2005) with the direction that the Draft Rehabilitation Scheme may be examined after issue of notice to the interested parties and

further action taken in accordance with law as expeditiously as possible since the DRS has been formulated and

circulated. No date for hearing has been fixed by BIFR.

 

 

 

 

 

 

 

 

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 records 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.39.81

UK Pound

1

Rs.80.30

Euro

1

Rs.56.02

 

 

SCORE & RATING EXPLANATIONS

 

SCORE FACTORS

 

RANGE

POINTS

HISTORY

1~10

7

PAID-UP CAPITAL

1~10

3

OPERATING SCALE

1~10

--

FINANCIAL CONDITION

 

 

--BUSINESS SCALE

1~10

4

--PROFITABILIRY

1~10

--

--LIQUIDITY

1~10

2

--LEVERAGE

1~10

2

--RESERVES

1~10

--

--CREDIT LINES

1~10

--

--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

TOTAL

 

18

 

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.

 

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