MIRA INFORM REPORT

Report Date :

02.08.2008

IDENTIFICATION DETAILS

Name :	TRIVENI ENGINEERING AND INDUSTRIES LIMITED

Registered Office :	Deoband, District Saharanpur - 247554, Uttar Pradesh, India

Country :	India

Financials (as on) :	30.09.2007

Date of Incorporation :	09.07.1997

Com. Reg. No.:	20-22266 (Old), 20-22174 (New)

CIN No.: [Company Identification No.]	U99999UP1997PLC022266 L15421UP1932PLC022174

TAN No.: [Tax Deduction & Collection Account No.]	MRTT00200E

PAN No.: [Permanent Account No.]	AABCT6370L

Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges

Line of Business :	Manufacturing and Sale of Sugar, Sugar Plant and Machinery Products and Turnkey Projects Turbines – Steam Turbines, Hydel Turbines, Packaging of Gas Turbines, Gears and Gearboxes and Surface Pollution Control –Turnkey Projects.

RATING & COMMENTS

MIRA’s Rating :

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 35000000

Status :	Very good

Payment Behaviour :	Regular

Litigation :	Clear

Comments :	Subject is a well - established and diversified engineering company having satisfactory track. The company’s profitability is under severe pressure. Payments are reported as slow but correct. The company can be considered normal for small business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Deoband, District Saharanpur - 247554, Uttar Pradesh, India
Tel. No.:	91-1336-222497 / 222185 / 222866 / 223791
Fax No.:	91-1336-222220
E-Mail :	triveni@del2.vsnl.net.in legal@ho.trivenigroup.com
Website :	http://www.trivenigroup.com

Head Office :	8th Floor, Express Trade Towers, Plot No. 15 and 16, Sector 16-A, Noida - 201301 India

Gears division	1/2/3 Belagola Industrial Area, Metagalli, K.R.S Road, Mysore – 570016, Karnataka, India
Tel. No.:	91-821-2582807 / 2582148
Fax No.:	91-821-2582694

Corporate Office :	“KAILASH” 2^nd Floor, 26, Kasturba Gandhi Marg, New Delhi – 110001, India
Tel. No.:	91-11-23310021 (4 Lines), 91-11-23714460 (3 Lines)
Fax No.:	91-11-23310117

Factory 1 :	Deoband Sugar Unit, District Saharanpur – 247554, Uttar Pradesh, India Tel. No. 91-1336-222497 / 222185 / 222866 Fax No. 91-1336-222220

Factory 2:	Ramkola Sugar Unit, District Kushinagar – 274305, Uttar Pradesh, India Tel. No. 91-5564-222218, 91-5567-226021 / 226071 / 226072 / 226243 Fax No. 91-5567-226248

Factory 3:	D-196, Okhla Industrial Area Phase – 1, New Delhi – 110 020, India Tel. No. 91-11-2681 0125/ 530/ 26813223/ 6093/ 94/ 98 E-mail: triveni@del2.vsnl.net.in

Factory 4 :	Khatauli Sugar Unit, District Muzaffarnagar - 251201, Uttar Pradesh, India Tel No. 91-1396-272561 / 272562 Fax No. 91-1396-272543

Factory 5 :	Jeevan Tara Building, Gate No.4, 1^st Floor, 5 Parliament Street, New Delhi – 110 001, India Tel. No. 91-11-23362522 - 24 Fax No. 91-11-23362525

DIRECTORS

Name :	Mr. Dhruv M. Sawhney
Designation :	Chairman and Managing Director

Name :	Mr. F C Kohli
Designation :	Director

Name :	Mr. M K Daga
Designation :	Director

Name :	Mr. M V Subbiah
Designation :	Director

Name :	Mr. R C Sharma
Designation :	Director

Name :	Mr. S K Seth
Designation :	Director

Name :	Mr. M M Haque
Designation :	Director (IDBI Nominee)

KEY EXECUTIVES

Shareholders/ Investors Grievance Committee:	Lt. Gen. K K Hazari (Retd.) – Chairman Mr. R. C. Sharma

Audit Committee :	Lt. Gen. K K Hazari (Retd.) – Chairman Mr. R. C. Sharma Mr. V. Venkateswarlu

Remuneration Committee :	Dr. F. C. Kohli – Chairman Lt. Gen. K K Hazari (Retd.) Mr. R. C. Sharma

Name :	Mr. A K Tanwar
Designation :	President (Sugar)
Tel No.:	91 - 1396 - 272561 till 63
Fax No.:	91 - 1396 - 272543
Email :	aktanwar@kht.trivenigroup.com

Name :	Mr. Rajiv Rajpal
Designation :	Chief General Manager, Gear Business Group
Tel No.:	91 - 821 - 2582807 / 2582148
Fax No.:	91 - 821 - 2582694
Email :	rajivrajpal@mysore.trivenigroup.com

Name :	Mr. B K Agarwal
Designation :	Chief General Manager, Water Business Group
Tel No.:	91 - 120 - 4308000
Fax No.:	91 - 120 - 4311010
Email :	bkagrawal@projects.trivenigroup.com

Name :	Mr. Arun Mote
Designation :	Chief Executive Officer (Turbine Business Group)
Tel No.:	91-080-22164000 / 28391624 / 28394721
Fax No.:	91-80-28395945 / 28374383 / 258395211
Email :	mktg@tbg.trivenigroup.com

Name :	Mr. C. N. Narayanan
Designation :	General Manager – Investor Relations and Value Creation
Tel No.:	91 - 120 - 4308000
Fax No.:	91 - 120 - 4311010
Email :	cnnarayanan@trivenigroup.com

Name :	Mr. Vikram Raina
Designation :	Group Advisor

Name :	Mr. Suresh Taneja
Designation :	Vice President and Chief Financial Officer

Name :	Mr. V P Ghuliani
Designation :	Vice President (Legal and company Secretary)

Name :	Mr. Tarun Sawhney
Designation :	Corporate Vice President

Name :	Mr. Nikhil Sawhnwy
Designation :	Corporate Vice President

Name :	Mr. Sameer Sinha
Designation :	Vice President

Name :	Mr. Bharat Mehta
Designation :	Vice President and Chief Human Resources Officer

Name :	Mr. M A Qureshi
Designation :	Chief General Manager, Sugar Unit Ramkola

Name :	Mr. Huldip Singh
Designation :	Chief General Manager, Sugar Unit Khatauli

Name :	Mr. D N Mishra
Designation :	General Manager, Sugar Unit Deoband

Name :	Mr. Amod Sharma
Designation :	General Manager, Sugar Unit Chandanpur

Name :	Mr. Ashok Kumar
Designation :	General Manager, Sugar Unit Milaknarayanpur

Name :	Mr. Pradeep Tyagi
Designation :	General Manager, Sugar Unit Sabitgarh

Name :	Mr. V. Ventkatarathnam
Designation :	General Manager, Sugar Unit Raninangal

MAJOR SHAREHOLDERS

(As on 30.06.2008)

Names of Shareholders	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group
Indian
Individuals/ Hindu Undivided Family	87743470	34.02
Bodies Corporate	84881413	32.92
Public Shareholding
Institution
Mutual Funds/ Axis	19346155	7.50
Financial Institutions/ Banks	125610	0.05
Insurance Companies	3779143	1.47
Foreign Institutional Investors	44715727	17.34
Non-Institution
Bodies Corporate	3502161	1.36
Individual Shareholders holding nominal share capital up to Rs.0.100 Million	10129819	3.93
Individual Shareholders holding nominal share capital in excess to Rs.0.100 Million	2139365	0.83
Any Others
NRI	560017	0.22
HUF	249463	0.09
Clearing Members	703707	0.27
Trust	5000	0.00

Total	257881050	100.00

BUSINESS DETAILS

Line of Business :	Manufacturing and Sale of Sugar, Sugar Plant and Machinery Products and Turnkey Projects Turbines – Steam Turbines, Hydel Turbines, Packaging of Gas Turbines, Gears and Gearboxes and Surface Pollution Control –Turnkey Projects.

Exports :
Products :	Bangladesh Egypt Ethiopia Gabbon Germany Indonesia Kenya Nepal Netherlands Nigeria Pakistan Papua New Guinea Philippines Seychelles Sri Lanka Tanzania UAE Uganda Venezuela

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production

Sugar	MT	40500	382131.20
Molasses	MT	--	207286.09
Mechanical Equipment	Rs. In Millions	--	142.52
Steam Turbines	MW	660	425
High Speed Reduction Gears	Nos.	450	313
Power	OOO'KWH	45 MW	145964.45

GENERAL INFORMATION

No. of Employees :

2500

Bankers :

Central Bank of India
Punjab National Bank
Oriental Bank of Commerce
Union Bank of India
Standard Chartered Bank
State Bank of Travancore
Canara Bank

Facilities :

SECURED LOANS	31.03.2006
From Banks
Cash Credit/WC DL/Overd raft	1837.930
Term Loans	1047.850
From Others	812.170

Total	3697.950

UNSECURED LOANS
Fixed Deposits	139.470
Short Term Loan
From Banks	150.000
Other Loans
From Other than Banks	11.300
Interest accrued and due thereon	27.320

Total	328.090


Banking Relations :	Good

Auditors :	J. C. Bhalla and Company Chartered Accountants Branch Auditors R. S. Gupta and Company Chartered Accountants Virmani and Associates Chartered Accountants

Subsidiaries :	United Shippers and Dredgers Limited The Engineering and Technical Services Limited Triveni Sperry Sun Limited TOFSL Trading and Investment Limited Triveni Sri Limited “Kailash” 2^nd Floor, 26, Kasturba Gandhi Marg, New Delhi – 110001, India. Tel No. 91-11-3310021 (4 Lines), 91-11-3714460 (3 Lines) Fax No. 91-11-3310117

Memberships :	Confederation Of Indian Industry

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount

500000000	Equity Shares	Rs.1/- each	Rs.500.000 Millions
20000000	Preference Shares	Rs.10/- each	Rs.200.000 Millions

	Total		Rs.700.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount

257888150	Equity Shares	Rs.1/- each	Rs.257.888 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		30.09.2007 (18 Months)	31.03.2006 (12 Months)	31.03.2005 (12 Months)
SHAREHOLDERS FUNDS
1] Share Capital		257.900	257.880	103.020
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		6662.600	5044.490	1838.270
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		6920.500	5302.370	1941.290
LOAN FUNDS
1] Secured Loans		9311.300	3697.950	4299.640
2] Unsecured Loans		704.200	328.090	201.290
TOTAL BORROWING		10015.500	4026.040	4500.930
DEFERRED TAX LIABILITIES		0.000	443.100	344.140

TOTAL		16936.000	9771.510	6786.360

APPLICATION OF FUNDS

FIXED ASSETS [Net Block]		12847.600	5480.000	2465.150
Capital work-in-progress		211.100	467.420	300.400
Intangible Assets		0.000	20.850	26.460
Discarded Fixed Assets Pending Disposal/Sale		0.000	0.190	2.220
Plant & Machinery acquired under Lease		0.000	202.100	216.020

INVESTMENT		108.300	18.640	229.750
DEFERREX TAX ASSETS		0.000	0.000	0.000

CURRENT ASSETS, LOANS & ADVANCES
	Inventories	4208.100	4047.900	4352.780
	Sundry Debtors	942.800	1003.440	666.490
	Cash & Bank Balances	254.300	259.190	227.870
	Other Current Assets	0.000	2.740	8.980
	Loans & Advances	4739.600	870.660	676.430
Total Current Assets		10144.800	6183.930	5932.550
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	5251.900	2123.650	1877.910
	Provisions	1146.300	487.600	537.060
Total Current Liabilities		6398.200	2611.250	2414.970
Net Current Assets		3746.600	3572.680	3517.580

MISCELLANEOUS EXPENSES		22.400	9.630	28.780

TOTAL		16936.000	9771.510	6786.360

PROFIT & LOSS ACCOUNT

PARTICULARS		30.09.2007 (18 Months)	31.03.2006 (12 Months)	31.03.2005 (12 Months)
Sales Turnover		20530.500	11560.720	9191.970
Other Income		809.900	0.000	0.000
Total Income		21340.400	11560.720	9191.970

Profit/(Loss) Before Tax		784.400	1611.790	1241.060
Provision for Taxation		30.100	296.830	245.860
Profit/(Loss) After Tax		754.300	1314.960	995.200

Export Value		NA	198.760	111.910

Import Value		NA	149.630	306.250

Expenditures :
	Cost of Employees	1421.900
	Manufacturing Expenses	1297.700
	Administrative Expenses	1121.200
	Raw Material Consumed	13224.800
	Excise Duty	1450.600	9948.930	7950.910
	Interest	782.400
	Insurance Expenses	274.600
	Power & Fuel	170.000
	Depreciation & Amortization	812.800
Total Expenditure		20556.000	9948.930	7950.910

QUARTERLY RESULTS

PARTICULARS	31.12.2007 (1^st Quarterly)	31.03.2008 (2^ndQuarterly)	30.06.2008 (3^rd Quarterly)

Sales Turnover	3467.500	3785.300	4400.600
Other Income	28.100	43.000	16.400
Total Income	3495.600	3828.300	4417.000
Total Expenditure	2795.300	2930.900	3674.000
Operating Profit	700.300	897.400	743.000
Interest	191.400	250.300	274.900
Gross Profit	508.900	647.100	468.100
Depreciation	201.100	202.500	193.500
Tax	51.000	101.800	28.600
Reported PAT	256.800	342.800	246.000

KEY RATIOS

PARTICULARS	30.09.2007 (18 Months)	31.03.2006 (12 Months)	31.03.2005 (12 Months)
Debt Equity Ratio	1.18	1.24	2.80
Long Term Debt Equity Ratio	0.74	0.54	0.81
Current Ratio	1.11	1.13	1.04
TURNOVER RATIOS
Fixed Assets	1.25	2.36	3.24
Inventory	3.31	3.02	2.32
Debtors	14.07	15.21	16.34
Interest Cover Ratio	2.00	6.86	4.68
Operating Profit Margin (%)	11.59	16.71	16.66
Profit Before Interest and Tax Margin (%)	7.63	14.85	15.45
Cash Profit Margin (%)	7.63	12.21	10.95
Adjusted Net Profit Margin (%)	3.67	10.35	9.74
Return on Capital Employed (%)	8.07	24.55	27.21
Return on Net Worth (%)	8.47	38.34	66.01

LOCAL AGENCY FURTHER INFORMATION

HISTORY:

Subject a part of Triveni group is in the business of manufacturing of Sugar, Steam Turbines and Project and Engineering activities.

On looking the four decade history starting from the incorporation of erstwhile Triveni Engineering in January 1961, it is dotted with mergers and amalgamations, totalling to 3 mergers/amalgamations. In 1971 the Upper India Sugar Mills was merged with the Triveni Engineering Works (TEWL), and this was subsequently merged with Triveni Oil Field Services, which is a JV company between TEWL and Pool Company, US and the merged company was renamed as company. In 2000, the Company was amalgamated with Gangeshwar Limited, and the amalgamated entity was named as Company.

Sugar Division: This division came into existence by the way of merger of Upper India Sugar Mill at Khatauli with TEWL. This capacity of the plant was expanded and upgraded continuously. In 1992-1993, the erstwhile TEWL has taken over the management of Gangeswar Limited two sugar units at Deoband and Ramkoda in UP. In 1993 the TEWL went public to part finance the chemical project based on captive molasses. Subsequently, by the amalgamation in 2000, this division has got all the three plants under it's roof with an installed capacity of 25250 Metric Tons of Cane Crushed per day.

Turbine Business Group: In 1964, the erstwhile TEWL, has started manufacuturing of steam turbines for the sugar industry in collaboration with Peter Brotherhood, UK. an in 1974 it has set up a facility at Bangalore to manufacture Steam turbines (upto 6MW rated capacity), turbo alternators and hydraulic systems. The mysore plant had been set up in 1976 to manufacture gears and gear boxes/drives. Company is the only gear manufacturer in India with the International Technology (provided by Lufkin Industries, Texas, US under licence) for manufacturing entire range of high speed gears. In 2000-2001, the company starts producing gas turbine under licence from vericor Power Systems LLC, Apharetta, Georgia, USA. The first gas turbine under this has been supplied and commissioned at the prestigious Oberoi Amar Vilas Hotel in Agra in FY 2000-2001.

Projects and Engineering Division: This division of the company is located in Okhla Industrial Area, N.Delhi is specialising in Sugar Machinery, Mini Hydel and sewage treatment project. This division, as a part of erstwhile TEWL has started manufacturing of mini and micro hydel turbines, in collaboration with Society Esac of France, with a view to offering turnkey projects in the range of 50KW to 3MW. In 1986, the company's Mathura engineering unit was closed down and shifted to Naini in Uttar Pradesh. In 1994-1995, the company has renewed it's licence with Envirex of US for another 10 Yrs for surface pollution control products. The company has successfully commissioned four mini hydel projects on the Abohar Canal, in Punjab in 2000-2001.

Oil & Gas Division : This division come into part of the company by the way of merger of Triveni Oil Fields Services(TOFS) with TEWL. TOFS was incorporated as Triveni Pool Intairdril in February 1986 by a JV between TWEL and Pool Company of USA. to provide on-shore Oil drilling services on Charter-hire to ONGC and Oil India Limited

To replace all the old boilers and turbines with new efficient high pressure boilers and turbines the company has embarked an Co-generation and Modernization Project costing Rs.840.000 Millions of which a subtantial will be commissioned in the next financial year. The plant will be located separately at Deoband.

Technical Collaboration:

The company has technical collaboration with following companies:

¨ Flexibox Limited, UK

¨ Lufkin Industries Inc., USA

¨ Plenty Limited, UK

¨ Sugar Research International, Australia

¨ US Filter/Envirex, USA

The company’s fixed assets of important value includes Land-Freehold and Leasehold, Building, Railway Sidings, Plant and Machinery, Rigs and Accessories, Bunk Houses, Furniture and Fixtures and Vehicles

PERFORMANCE:

The Government of India incorrectly assessed the sugar production for 2006-07, and in an attempt to forestall any rise in sugar prices, banned the export of sugar in June, 2006. The Uttar Pradesh Government also wrongly forecast cane and sugar production in Uttar Pradesh and the country and based on the sugar prices prevalent in October, 2006, raised the State Advised Cane Price (SAP) substantially.

Sugar cane area in fact went up by over 20% in 2006-07 and sugar cane yields also increased by about 5%. This resulted in a record production of cane, over 25% more than in 2005-06 From January 2007, sugar prices came down sharply, and for the sugar year 2006-07, open market sugar prices have been over 15% lower than the previous year. This caused overall sugar margins to turn negative, even after accounting for better results from our cogeneration operations.

However, the engineering businesses experienced significant growth in 2006-07, and in fact grew faster than the capital goods industry. The Turbine Business Group has been able to secure strategic partnerships with the Beijing Beizong Turbine Company of China for turbines up to 330 MW, and with GE USA for High-Speed reciprocating compressors for the Oil & Gas Industry.

Segment wise reporting on the various business segments of the company has been provided in Note 15 of the 'Notes to Accounts' to the audited statements, and detailed comments on the performance of the various divisions are given in the Financial Review and Management Discussion and Analysis.

Dividend:

The Company during the period has declared two interim dividends aggregating to 50% (Rs.0.50 per equity share). The directors have pleasure in declaring a final dividend of 10% (Rs.0.10) per equity share subject to the approval of shareholders in the Annual General Meeting. The total outgo on account of dividend for the accounting year (18 months) 2006-07 will be Rs.178.36 million (including Dividend Distribution Tax) versus Rs.147.54 million in 2005-06 (12 months).

BUSINESS OUTLOOK:

The new sugar projects at Chandanpur, Rani Nagal and Milak Narayanpur, and expansion of the existing Ramkola Sugar unit, were successfully commissioned at various times during the last season. All their units will be running at full capacity in the coming year, and they expect cane crush to increase by around 30%, even though the season may be shorter owing to a delayed start. They have filed a case in the Allahabad High Court against the announcement of the same State Advised Cane Price (SAP) in 2007-08 as existed in the last season. They are hopeful of a favourable outcome and a cane price in 2007-08 which is in keeping with existing and forecast sugar prices. If this occurs, it will have a positive impact on margins, and this will be significantly enhanced through the operations of their three Cogeneration units and the distillery.

In line with the forecast growth of the Indian economy and the capital goods industry, and by virtue of their concentration in the power and water sectors, they believe the Turbine, Gear and Water businesses are poised to sustain good growth in the coming years. The order books of the engineering businesses are satisfactory, and in respect of the turbine business, the thrust is on export and service revenues.

TECHNOLOGY:

The key differentiator in all their engineering businesses is technology. Expansion of the Turbine Business Group facility at Bangalore and the Gear facility at Mysore was done with latest state of the art equipment. They are undertaking increased research and development efforts to improve turbine efficiencies and develop new models to meet changing customer needs. The new turbine models introduced in the past two years have secured a major market share in their segment, and are expected to continue this performance. In their new sugar facilities, they have installed the latest technologies for increasing efficiencies and reducing steam consumption.

SUBSIDIARIES:

Subject was incorporated as a wholly owned subsidiary of the Company on 27th June, 2006. The other subsidiaries, Abohar Power Generation Limited (APGL) and Upper Bari Power Generation Limited (UBGL) have yet to commence business activities. These companies were incorporated to execute mini hydel projects in Punjab and Himachal Pradesh on a BOO basis, but for strategic reasons, the Company now does not wish to pursue these projects, and hence, their stake in these companies will be divested in the best possible manner. Triveni Retail Ventures Limited (formerly Triveni SRI Limited) is engaged in the business of semi urban retailing. Information on subsidiary companies required under Section 212 of the Companies Act, 1956 is provided in Annexure-'C' of the Report.

CONSERVATION OF ENERGY:

Energy Conservation Measures:

Turbine Unit

Installed a 30 TPH Condenser system at the Boiler House for recycling hot water to the boiler feedback water system.
Heat Recovery - By condensing 30 TPH of steam, fuel consumption is reduced with direct savings of heat energy.
Gear Unit:

The latest technology CNC Machines are being used for production activities, thereby consuming less power.

The latest technology CFL lamps are being used for the lighting systems.

Sugar and Cogeneration Units:

All the cogeneration plants use highly efficient 87 ata/515 Degree Celsius steam parameter boilers and turbo generators.
A system for recovering heat from the hot condensate has been installed at the Khatauli sugar unit.
At the Khatauli and Deoband sugar units, flash steam recovery units and direct contact juice heaters have been installed.

Distillery Unit

Installation of bio-methanation plant. Methane gas (bio-gas) is being used in the boiler as a fuel for enhancing fuel conservation.

Additional Investment and Proposals for Reducing Energy Consumption:

Turbine unit: - Proposed installation of a high energy efficient 25 TPH Boiler to replace the old Boilers.
Proposed 45 TPH Condenser for better Water and Heat Recovery.

Sugar Units:

Replacement of existing mill turbines at Triveni-1 tandem by Electrical Drives to improve the over all energy efficiency at Khatauli sugar unit.

System for recovering heat from hot condensate at Deoband for energy savings

MANAGEMENT DISCUSSION AND ANALYSIS:

Technology:

Technology is at the heart of their conviction to achieve their vision of leadership in each of their businesses. The continual R&D in their engineering businesses, as well as associations with leading institutes and corporations, allow Triveni to be placed at the forefront of each of these businesses. Their developments in their sugar businesses in terms of varietal balances, cane and farm productivity measures, and sugar processing equipment allow them to sustain their leadership in this field.

Customer Satisfaction:

Customers are a true judge of the success of their products. A market leadership position in each of their engineering businesses, in terms of market share, coupled with near 99% repeat orders, is testimony to the customer delight that they strive to achieve. In their sugar business, the premium that they are able to achieve on the sale price of their sugar is testimony to their quality and customer acceptance.

Sustainability:

They at Triveni are proud that our portfolio of businesses conforms to the notion of sustainability; not only in an ecological sense, but also in terms of social prosperity. Sugar cane is one of the most productive C4 crops in the world, which is a determination of how productively crops convert CO2 into bio-mass through photosynthesis, and that biomass is later used to produce power through their co-generation facilities. The other by-product of the sugar manufacturing process - molasses, is also converted into ethanol-a clean, green alternative to petrol/diesel. This renewable crop also allows Triveni to participate in the development of rural India through the distribution of income to more than 350,000 farmers who supply them with sugarcane. Of course, their outreach programmes touch the lives of each of their farmers and their families, which we estimate to be over 1.5 million people. In their engineering businesses, they are the undisputed market leader in providing renewable energy and water solutions to their clients.

Subject is all their factors of production join seamlessly as their guiding principles-Technology, Customer Satisfaction and Sustainability - are not viewed as distinct thoughts but rather as essential parts of a whole. Transforming these concepts into reality, they bring their financial year 2006-07 and their thoughts on the years to come.

SUGAR BUSINESSES:

- SUGAR BUSINESS GROUP- COGENERATION GROUP- DISTILLERY GROUP

Industry Overview:

World sugar production for the October/ September 2007 period is estimated to exceed all earlier expectations. The figure for October/September 2006/07 now estimated at 167.3 million tonnes, is significantly higher than the 152.5 million tonnes produced in the previous year. Of the total sugar production, over 130 million tonnes is from sugar cane while the balance was produced from sugar beet. During 06-07, the growth has come from sugar cane, while beet sugar production has shown a decline primarily due to lower production from the European Union (by 21%) and the rest of Europe (by 10%). While Africa and North and Central America produced only a little more than in 2005/06, Asia (34% Increase in production) and in particular India (48% Increase in production) led the explosive rise in output during 2006-07 Brazil, India, China and USA are the major sugar producing countries accounting for 50% of the total global sugar production Brazil continues to be the largest producer, while India continues to be the largest consumer and the second largest producer.

While the global production of sugar is estimated to have grown by 9.6% during 2006-07, the consumption has only risen by 2.9% at 150.4 million tonnes. On the global trading front, while exports have shown a marginal Increase at 56.3 million tonnes as against 55.9 million tonnes, Imports have shown a decline from 53.4 million tonnes in 2005-06 to 51.3 million tonnes in 2006-07 India continues to remain the largest consumer of sugar followed by China, Brazil, USA and the Russian Federation Consumption in China, India and Brazil is growing at a higher rate than the world average Consequently, these geographies are expected to play a larger role in the global sugar trade in the coming years.

The main producers of sugar in the world are also the leading exporters excepting India and are highly dependent on the world trade Australia exports over 75% of its production, while Brazil exports over 65% of its production India is however unique, as it has the world's largest consumption market India's dependence on the world trade was marginal in the past. With the current year's record production and expected bumper crop in 2007-08, the potential for India to export large quantities is taken Into consideration in the world trade. This has resulted in softening of prices India has to export large quantities either as raw sugar or white sugar in the next two years to reduce the Inventory. This measure will lead to a certain degree of price stability within the country.

With rising crude prices as well as soft sugar prices, Brazil has been diverting more sugar cane for manufacture of ethanol Brazil currently is using approx. 55-56% of its total sugar cane production for manufacture of ethanol, significantly higher than the previous year Going forward, Brazil's utilisation of sugar cane to manufacturing ethanol will determine the volume of sugar available for the international market.

Global sugar prices have also shown significant volatility during the past eighteen months. The steep fall in raw sugar prices in New York from 18.93 cents/lb in February 2006 to 11.6 cents/lb currently is clear evidence that sugar exporters face a serious problem which is not likely to disappear overnight. Similarly, the white sugar prices have also shown significant decline from its peak of USD 490 per tonne and is moving more or less in line with raw sugar prices. The spread between the raw and white sugar contracts has also come down drastically, signifying an even availability of both products.

Some of the key structural changes that are underway in the global sugar market are:

Reduction in sugar production in the EU
Rising crude prices in global market
Diversion of more sugar cane to manufacture of ethanol by Brazil
China to emerge as one of the world's largest importers by 2015
Russian dependence on imports is likely to reduce

India's announcement of mandatory blending of 5% ethnanol in petrol from October 07 and 10% from October 2008 and also allowing mills to produce ethanol directly from sugarcane juice.

Outlook:

On expectation of a continued increase in production from Asian countries, especially India, the global market for sugar will remain in surplus in 2007-08 as output will once again overshoot demand. This will lead to another rise in inventory and low world market prices. World trade will also be impacted on account of weak US dollar which will result in lower income in local currency for the exporters. However, on account of rising crude prices and increased sugar inventory, it is estimated that Brazil will be producing less sugar in 2007-08, indicating that the global sugar prices have resistance at a price that equals the cost of production of marginal Brazilian sugar. Also, India is likely to enter the down phase in its production cycle in 2008-09 which would take pressure off the market. Hence, the outlook for 2008-09 is for an improvement in sugar fundamentals.

Source: Upto 2006-07 ISMA and future projections - company forecasts

Indian sugar industry in the past two seasons has shown a significant growth in output. From the lowest production in a decade of 12.7 million tonnes in 2004-05, the sugar production has galloped to 28.5 million tonnes in 2006-07. This was largely on account of good climatic conditions, remunerative sugar cane pricing, on-time payments to farmers and setting up of new production capacities.

Sugar prices reached a peak of Rs.20,000 per tonne during the first quarter of calendar 2006. However, on the back of expected higher production for the 200607 season coupled with the Government ban on exports, sugar prices started declining from July 06 onwards. The decline in sugar prices continued since then and towards the first quarter of calendar 2007, in most part of the country, sugar prices went below the cost of production.

In the sugar year 2006-2007, India's sugar production is estimated to have increased strongly by 48% to 28.5 million tonnes. Even after accounting for a consumption of 19.0 million tonnes and exports of 18 million tonnes, the inventory position has significantly increased to 11.6 million tonnes Higher inventory has led to a higher stock to consumption ratio which stood at 61%. This will have an impact on the pricing of sugar going forward.

The Dynamics of Cane Pricing:

The Government, both at the central and state level, plays a crucial role in the dynamics of sugar cane pricing While most of the major sugar cane producing states follow the Central Government determined Statutory Minimum Price (SMP), some states especially UP which is the most prominent and consistent sugar producing state in the country, follow a price which is announced by the State Government called State Advised Price (SAP).

Uttar Pradesh had one of the highest SAPS for 2006-07 with cane price at Rs.1250 per tonne for normal variety and Rs.1300 per tonne for early maturing variety. The SAP when compared with the SMP for 2006-07, was higher by Rs350 to 400 per tonne of sugarcane.

Sugar Pricing:

Sugar prices had seen upward movement till May 2006 following inventory reduction by sugar companies At that point in time, sugar prices had touched a high of over Rs.20000 per tonne However, since then the situation on the back of an expected bumper crop in 2006-07 sugar year coupled with a ban on exports, has resulted in an oversupply of sugar which led to a downward movement of sugar prices The decline in sugar prices was steep and at some point of time during this period, the free market sugar prices were even lower than the levy sugar prices.

SAP was higher than SMP by Rs.350-400 per tonne in 2006-07.

Government Intervention:

The Government of India, realising the impact of the bumper production of sugar, has announced various measures which enable sugar companies to partially offset their losses on account of the higher cane prices and lower sugar prices.

On the inventory side, the Government announced the creation of a buffer stock of 5 million tonnes (in two phases-firstly two million tonnes for a period of one year from 1st May 07 to 30st April 08 and subsequently three million tonnes for a period of one year from 1st August 07 to 31st July 08) The Government will reimburse the cost of carrying this inventory such as financing cost, insurance cost etc., in the light of higher sugar production during the current season, it is expected that the buffer stock will be extended for one more year The estimated annual reimbursement for Triveni on this account would be approx. Rs.140 million.

Even though the Government of India had banned exports in July 06, after realising the impact of a bumper crop for 2006-07 opened up exports under Open General License for both raw and white sugar from January 2007 onwards Further, to encourage exports, the Government in April 07, also announced an export incentive in the form of a reimbursement of expenses incurred for Internal transport and freight charges (which would Include ocean freight disadvantage and handling and marketing charges) amounting to Rs.1350 per tonne for the mills located in the coastal states of India and Re 1450 per tonne for mills located in other than the coastal states of India, This exports assistance which was initially valid till 18th April 2008 has now been extended upto 1st April, 2009.

The Government also recently approved provision of loans from banks under special guidelines for an amount equivalent to the Central Excise duty actually paid by the sugar mills for levy and non-levy sugar during 2008-07 and the estimated amount of excise duly payable in 2007-08. Government would provide partial Interest subvention to the banks on account of this loan through budgetary provisions. Such Central assistance will be confined to the portion of arrears of sugarcane pace which is relatable to SMP and this amount can bused for payment to farmers against sugar cane arrears, the modalities of which are yet to be announced.

Many other state Governments such as Maharashtra and Karnataka have also announced various relief measures to the sugar industry in their respective states, such as additional export subsidy together with the waiver of purchase tax, provision of transport subsidy for cane transport, subsidy for excess cane crush or compensation for lower recovery alter the normal crushing period.

Outlook:

It is expected roar the ensuing season 2007-08 will again be a bumper year for sugar production. Even though consumption will grow at around 3-4% year on year, the increased volume of production is expected to add a substantial volume into inventory, in spite of the expectation of doubling of exports, Under this circumstance, the stock to consumption ratio is bound to go up Sugar prices therefore should remain in a range bound with no substantial upward movement.

The sugar industry in UP made plea with the State Government for a lower cane price for Recurrent season on account of telling sugar paces which otherwise will make the sugar operations unviable. However, the Government has announced the SAP at the same level as last year. Given the ruling sugar prices, the sugar mills in UP cannot afford SAP and this forced the industry to seek court intervention and the SAP for 2006-07 and for 2007-08 have been challenged being arbitrary and not based on economic rationale. The matter is currently subjoined.

With the declining sugar prices, the inability of mills to pay remunerative prices to farmers and that too in time, may deter many farmers to switch to other crops which in turn will bong down the area under sugar cane cultivation in the coming season. This will result in lower production of sugar in season 08-09 and 09-10 which in him should correct the excess inventory and will lead to increasing trend in sugar pricing.

However, they believe with the emerging raw sugar export opportunity, Government encouragement in the form of subsidies and doing away with the export release order mechanism would lead to cumulative exports rising.

With the Government's announcement of mandatory blending of ethanol in petrel upto 10% by October 08 and its intent on allowing conversion of sugarcane juice into manufacture of ethanol, they foresee a long term sustainability in an integrated sugar operation.

Co-generation and Distillery Industry Review:

Integrating sugar operations with the setting up of co-generation units and distillery has evolved as a viable model for sustaining the operations during the down cycle With the power sector reforms and long term power purchase agreements, the sugar companies round attractive to use the surplus bagasse to generate electricity and supply to the grid. Similarly, with the Government's programme of blending of ethanol with petrol, selling up of molasses based distillery has also become attractive. These two businesses act counter cyclical to the sugar operations. In the year of surplus sugar production (and hence lower sugar realisation) more bagasse and molasses are generated which in win leads to:

Lower prices for these by-products in the market, and generating more margins by manufacturing large quantity of value added products.

Co-generation overview:

There is significant untapped co-generation potential in India. Today, bagasse based co-generation for export of power is an emerging trend in the sugar industry Long term PPAS are already in existence and me state regulator UPERC had already issued practice direction regarding tariff fixation, model PPAS and other policies and issues. Co-generation units based on latest technology such as ours, also have potential of earning carbon credits under Clean Development Mechanism (CDM). Another attraction for this business is the tax holiday it enjoys under the Indian Income Tax Act.

In India, according to CEA May 06 data, the installed exportable power by the co-generation in sugar industry is over 847 MW. The potential to generate bagasse based cogenerated power is 5000.7000 MW. Therefore, II presents a significant opportunity, and us potential is waiting to be tapped in India.

Sugar Business Group:

* The company has a sugarcane crushing capacity of 61,000 TCD in FY07.

* Three new greenfield units in Chandanpur, Raninagal & Milak Narayanpur and the capacity expansion of Ramkola sugar unit has been completed and have become operational during FY07.

Company’s sugar manufacturing capacity is the third largest in the country. It has the requisite capacity to have dominance in the market it serves. Three units of company, located in the Western part of Uttar Pradesh, caters to the sugar deficit markets of Delhi, Punjab, Rajasthan which enables it to fetch a higher sugar price Khatauli & Deoband units produce significant quantity of large grain sugar which in turn attracts a premium over the medium grain sugar With better quality and a higher grade of sugar supplied into this market over a longer period of time, sugar from these units has developed a brand for themselves in these markets.

Highlights 2006-07:

* 51% Increase in sugar cane crushing capacity from 40500 TCD in 2005-06 to 61000 TCD in 2006-07.

* Three new greenfield units at Chandanpur, Raninagal and Milak Narayanpur have commenced operations during the 2006-07 season and added 17500 TCD to the total capacity Brownfield expansion of Ramkola also commissioned during the 2006-07 season adding 3000 TCD.

* Crushed 61 million tonnes of sugar cane during season 2006-07 vis-a-vis 3.98 million tonnes in 2005-06.

* Recovery of the Deoband unit continues to be the best among the western UP mills at 10% as against the average recovery of Western UP mills of 9.53%.

* Khatauli and Deoband units of the company ranked 1st and 2nd among the Western UP mills in terms of total cane crushing and sugar production.

Performance:

The company crushed a total of 6.39 million tonnes producing 0.62 million tonnes of sugar in April 06-Sept 07 During the season 2006-07, the company's sugar units crushed 610 million tonnes of cane which is 53% more than the previous season Similarly, sugar production was also higher by 55% at 0.59 million tonnes The increase in production was on account of increased volume of crush coupled with improvements in recoveries of sugar from cane Increased crush was on account of additional crush at the existing facilities and also due to the commissioning of new facilities during the season.

Older factories have improved sugar recoveries:

Deoband unit recovery remained highest among the western UP mills at 10% and during the season 2006-07, both the older factories at Deoband and Khatuali shown significant improvements in recovery over the previous sugar season.

Outlook 2007-08:

In the coming season 2007-08, the company expects to crush over 30% more cane and is expected to have better recoveries.

With the input and output prices determined by Government/market, the company is in the process of improving efficiencies and thereby reducing cost Cane development is a thrust area where the focus is to improve the availability of high sucrose content cane which will bring down the per unit cost of output.

Allotment of more contiguous and compact cane area shall further help in improving freshness of cane available at the factory for crushing which in turn will improve operational efficiencies and also result in better recoveries apart from bringing down the cane transportation cost. A programme for improving cane yields per unit area to bring down farmers' cost of production will lead to the long term sustainability of sugar operations.

UP Incentive Policy:

The company had made capital investments in sugar operations under the U.P. Incentive Policy and is eligible for incentives prescribed under the policy. The Policy envisaged a capital subsidy of 10% of the capital investment apart from certain recurring incentives in the form of exemption of certain duties & taxes and reimbursement of certain expenses incurred in relation with sugar cane and sugar transportation etc. This recurring incentive is available for the next ten years.

Even though the Policy was terminated w.e.f. 4th June 2007 by the new State Government, their units were declared eligible under the Policy before the same was terminated. The industry has taken up with the Government to pay subsidies/Incentives to all mills which had acted under the old policy. The company has received strong legal opinion, according to which, the company having acted on the policy, compiled with all its terms and having been declared eligible under the policy before its termination, is entitled to receive subsidy and incentives as per the terms of the old policy.

Marketing Analysis Summary:

* The company has one of the largest cane crushing capacities in India.

* Well located factories with abundantly irrigated fertile soil suitable for sugarcane cultivation.

* Integrated operation with co-generation and distillery with two of the major facilities.

* Improved cane intensity in core area of new units along with high sucrose varieties could increase cane supply at lower costs apart from increased recoveries.

* Scope for reducing cost of production through Improving efficiencies.

* Introducing additional areas under Early Varieties in all units to have sustained cane crush.

* In the long term, there is scope for improving cane productivity (yield of cane per hectare of land).

To combat the cyclical nature of business, cost control and cost (reduction measures are continually emphasised to make the sugar operations competitive The various steps towards that are:

To improve recovery of sugar from cane (by having larger volume of high-yielding early maturing variety cane) which will bring down the per unit cost of raw material in final output.

To optimize the cane procurement thereby maximising the cane freshness and minimizing the cost of transport.

To improve operating efficiencies and reduce stores & spares and consumables consumptions.

To bring down the fixed cost in terms of manpower, administrative overheads etc.

Cane Development: An important strategy: Uttar Pradesh is the second largest sugar producing state after Maharashtra and expected to become largest sugar producing state in 2007-08. The state is bestowed with natural bounty in terms of water which is essential for sugar cane farming Western UP has intensive canal irrigation facilities and the cane intensity in these areas is significantly high when compared with other areas. With the output prices expected to be range bound in a narrow band, the only way sugar manufacturing can be viable is by improving the recovery of sugar from cane.

Continuing the thrust of company's cane development programme, improved varieties of cane planting, timely application of fertilizers & pesticides and adopting best farming practices will take this process a long way which will be mutually beneficial to farmers as well as the factories The focus of cane development is to address the recovery improvement through increasing area and supply of early maturing variety cane and also scheduling the cane harvesting on the basis of maturity of cane. In the areas around the new units, changing the varietal mix of cane from rejected and late maturing variety to early and high yielding variety will be the focus

Expansion:

In the year 2006-07, the company added sugar crushing capacities of 20,500 TCD.

The company undertook the capacity expansion in sugar operations with the setting up of three new units with an aggregate capacity of 17500 TCD and also a brownfield expansion at Ramkola where the crushing capacity was enhanced from 3500 to 6500 TCD. The total capital expenditure incurred for these expansions were Rs.5.2 billion.

Cogeneration Business Group:

* The company's co-generation business, using surplus bagasse, supplies power to the grid and addresses the captive power and steam requirements of the sugar factories

* Three co-generation plants: 1 in Deoband (22 MW), 2 in Khatauli (23 MW each) thus having total installed capacity of 68 MW and an exportable capacity of around 42 MW during the cane crushing season; and also during the off-season wherein we are presently operating for approximately 90 days.

* Khatauli plant's phase 2 cogen was commissioned in December 2006.

Highlights:

* State-of-the-art energy efficient plant

* Good Infrastructure facility

* Proximity to the substation of UPPCL

* Rapidly rising energy demand

* Power market restructuring

* Large CDM potential

Performance 2006-07:

The company has 3 co-generation plants operational currently - one in Deoband (22 MW) and two in Khatauli (23 MW each) - all plants are modern, having high pressure high temperature efficient configuration. All three co-generation plants are operating very efficiently and achieving high plant load factor. The three co-generation units generated 376.78 million units and exported 263.02 million units during April 06-Sept 07.

Outlook:

There is a long term power purchase agreement in existence signed with the Uttar Pradesh Power Corporation Limited which will continue to secure the profitability of the co-generation business.

Cane crushing expected to Increase in 2007-08 season which in turn will produce more bagasse During the last season, enough bagasse was saved which led to the operations of co-generation units for around 90 days during the off season. On account of increased availability of bagasse during the season 2007-08, the off season running is expected to go up to over 100 days.

Increase in off season operation days is expected to add to the revenue and profitability and mitigate the cyclical nature of the sugar business.

Carbon Credits:

Carbon credits are available for companies Involved in developing and implementing projects that reduce green house gas emissions, thereby generating carbon credits that can be sold in the carbon market. The carbon credits are referred to as Certified Emission Reductions (CERs).

In Annex 2 countries like India, these credits are earned by implementing 'green projects' under a Clean Development Mechanism or CDM.

These are validated and registered with the United Nations Framework Convention on Climate Change (UNECCC), which also Issues carbon credits after verification.

Company's co-generation plants at Deoband and Khatuali Phase 1 have already been registered with UNECCC.

The Company's Cogen unit at Deoband has generated 190000 Emission Reductions or ERs from November04 to March 07. These carbon credits have been verified and Issuance has been requested for the same.

Carbon Credits Outlook:

The outlook on Carbon Credits is positive. The company has a first mover advantage in this concept in co-generation having two registered projects and requested for Issuance of CERs. The phase 2 of the 23 MW bagasse based co-generation power plant at Khatauli is under validation. The CERs from Khatauli Units shall also be made available for sale in the forthcoming quarters. The company expects the pricing to remain atleast at current levels.

Distillery Business Group:

The company's distillery business can manufacture industrial alcohol (SIDS), rectified spirit (RS), extra neutral alcohol (EINA) and ethanol (Anhydrous Alcohol) depending on market requirements and thereby addresses the needs of the chemical, potable liquor industry and ethanol blending programme, presently it is manufacturing SIDS, RS and ENA.

One of the largest single stream molasses based 180 KLPD distillery, started operations in April 2007.

Molasses, the by-product generated during the manufacture of sugar is fermented and distilled to manufacture variants of alcohol.

The 760.000 litres per day distillery unit, with state-of-the-art equipment and biomethanalion process, is located at Muzafarnagar which is equidistant from two of their major sugar manufacturing facilities of Khatauli & Deoband. This will ensure security of raw material.

Customer segmentation:

The distillery business group caters to three main segments:

Used in Industrial applications Used in potable liquor manufacturing Used as a fuel-ethanol

Customer Acquisition:

The company is already supplying to all the customers in the abovementioned first two segments. Its products have been very well accepted as they are meeting all the specifications. The company has also started supplies of ENA to UB Group.

Fuel Ethanol:

The company also has the capability to produce fuel ethanol. It is presently not supplying fuel ethanol under 5% blending programme as it was not qualified for the tender floated by the oil marketing companies as its capacities came up after the lenders were floated. However, recent announcements through press release that fuel ethanol would be made mandatory at 5% blending (and 10% optional from October 07) and raised to 10% mandatory blending from October 08 would enable new lenders to be issued soon and for ethanol supplies for their distillery unit to commence. The Government has also allowed the use of sugar cane juice for producing ethanol. The company is well positioned to qualify for the tenders once blending is raised to 10%. The alcohol (other than fuel ethanol) in the country would thereby find another outlet raising realisations significantly across all segments.

Outlook:

Significant increase in realisation of alcohol (SIDS, RS & ENA) is expected on increase of the blending level of ethanol to 10%.

Company has already become a preferred supplier to all the leading customers in Industrial and Potable Segments and the product has been well accepted in terms of quality and specifications. The company is fully geared up for high value Ethanol production and supply once 10% blending is implemented.

Cane crashing expected to increase in 2007-08 season which in turn will produce more molasses. Higher availability of molasses will lead to better availability of raw material and better capacity utilisation of the distillery plant.

Benefits of availability of bio-gas through led-methanation process to reduce fuel costs. In respect of distillery plant. Bioemthanation results in generation of methane gas, the percentage of which gradually increases. This gas is fired in the boiler which replaces bagasse as fuel and thus results in saving in fuel cost.

Benefits of stabilised and consistent operation of the distillery for the entire operation eased as plant and machinery is fully tested and operational.

Engineering Businesses:

Turbine Business Groupgem Business Groupwater and Waste Management Business Group

Engineering Business Overview:

From its early days, the company has been focusing on its core businesses of sugar manufacturing and engineering. Of late, in line with the growth in the manufacturing sector. Company aligned Itself to leverage its competency in design led manufacture in two primary sectors power and water. These sectors are catered to by Triveni's three engineering businesses steam turbines in Bangalore, gears in Mysore and water and waste water treatment equipment in Noida.

The three businesses share similarities in many respects. The products of the three businesses, all conform to the engineered-to-order mechanical equipment space, where process and design engineering are capabilities that are critical to the cost structure as well as to the success of the products in the market. They also share a similarity in the fact that they are all technology products where servicing is a capability that each business group must excel in, and this has been achieved through a robust after market presence.

All the three businesses cater to the capital goods Industry and with the forecast growth in Industrial activity in the country, all these businesses should show consistent growth in the coming years.

Steam turbines cater to the power Industry and as unit power generation is inadequate to meet the requirements of Industry, companies are focusing on captive power generation. Secondly, Industries which are scaling up their operations also require more captive power. Thirdly, businesses are substituting the source of power from diesel generating units to generation of electricity through steam, which is much more cost effective.

In the case of High-speed gears, apart from the power generating industry, many other Industrial applications require customised gear solutions. This segment has also grown in line with general Industrial growth. Entry into new products like hydel gears, marine gears and niche slow speed gears will give further growth impetus to this business.

As water is a scarce commodity and with the application of water in Industrial applications growing continually, treatment of water becomes Inevitable Technological solutions of recycling and desalinating water to meet demand as well as stringent environmental norms are forecast to be the routes of growth for this sector.

Turbine Business Group:

Industry Scenario:

The economic environment in India is currently poised for a strong overall growth of the economy. The GDP is estimated to grow at 9% with industrial growth driving overall growth Strong investment demand in capital spending by Corporates as driving the index of Industrial Production. IIP for 2007-08 liable August 07) grew at 9.8% while the growth in capital goods segment in IIP grew at 21.3% during the same period.

With all macro economic parameters directed towards a strong economic growth, the sustainability of industries which are in the capital goods sector is quite strong in fine foreseeable future. Further, to fuel any such growth in any Industrial segment, growth in the power sector is inevitable.

Going by he National demand forecast of the 16th Electrical Power Survey conducted by Government of India, a capacity addition of about 76,400 MW is planned in that 1st Plan (i.e. 2007-2012). Out of this, 28,000 MW is planned to be added through Ultra Mega Protects, 23,000 MW through Merchant Plants and the balance 25,000 MW. Through captive/co-generation/IPP segments. Hence, a massive growth in this segment is evident.

Capacity addition of 76,400 MW planned for the power sector in the 11th Plan.

As India is a power deficit country and with fossil fuels a costly and scarce resource, it has looked at other opportunities to add capacity Captive/co-generation has proved a viable answer and a number of plants mat use steam or heat energy as a process parameter have actively pursued this opportunity, to not only generate power for their own requirement but also for selling to the national or stale electricity grids Another emerging sector, where Triveni turbines nave a dominant market share, is the small Independent Power Producer (IPP) segment. These units are normally established by using the locally available resources such as bio-mass material, agricultural waste and even municipal solid waste to generate electricity. This form of power generation and meeting power requirement on a decentralised manner has found favour with many state Governments.

Industries ranging from Paper, Textiles, Carbon Black which require steam as a process requirement, or Steel and Chemicals, which generate large volume of energy through gases and exhausts which otherwise becomes waste, are finding economic use in generating power. These are the very sectors that are the end users of their steam turbines. Recognising this potential, company has expanded manufacture and supply of power generating turbines tram 18 MW to a capacity of 30 MW in the current year.

Performance Highlights:

Production, Marketing and Sales Review Turbine-Domestic:

During 2006-07, 140 turbines with a generating capacity equivalent to over 900 MW have been produced. This year's revenue has touched a record Rs.6.9 billion, a gain of almost 149% over previous year. In the market upto 20 MW, company achieved a domestic market share of around 78%. The market for an Indian turbine customer is global as there are no barriers of entry in the form of any duties and taxes. Thus, with a dominant domestic market share in the market upto 20 MW, they are globally competitive and they believe that in this segment they lave about 20% market share globally with in-house R&D efforts. Company is developing higher MW turbines and is currently making entry into the power band of 18 MW to 30 MW and above.

Industries in Focus:

Cement, Paper Textile, Metals, Sugar and Steel (Sponge Iron) are company’s target industry segments. As these industries are energy intensive, most of these Industries are likely to go for captive/ co-generation thereby shifting to a cheaper source of power.

Further the growth of Paper industry is expected to be around 8-10% in the coming year as consumption is estimated to grow up to 20% by 2010 they estimate that the Textile industry, which is predominantly using DG based power for their captive power requirement, will be shifting to steam based power plants on account of economies of scale as well as to bring down the cost of production. A similar trend is expected in the cement industry.

Paper, Textile and Cement industry captive power requirements are a significant growth area.

The Independent Power Projects (IPP) route also offers a strong market for our products Renewable energy continues to play a major role in development of low captive energy system as they Involve lower environmental impact Carbon Credits along with income tax and duty subsidies for biomass based power plants are contributing to growth in this sector The Ministry of Non-Conventional Energy Sources has estimated that biomass based resources is capable of generating 16,000 MW per annum whereas the current Installed capacity is only about 600 MW excluding sugar co-generation capacities Various state Governments are also actively promoting IPPs for meeting the power requirements in a decentralised manner by using locally available resources.

Exports-Growing beyond boundaries:

With the completion of capacity expansion, Company is capable of meeting international standards both in terms of quality and delivery. Hence, exports have been identified as a thrust area and accordingly, Company will be focusing on the export market During the period under review. Company has entered new high-technology demanding markets such as Italy, Spain and UK.

Significant orders received during this period are:

Their largest turbine generator set overseas order is for 16.5 MW
Wartsila Finland OY order for 2 nos 4.7 MW steam turbines which was followed by a repeat order of 6.4 MW steam turbine generator set.
An order for 6 MW biomass based power plant from Spain.
Orders for 82 MW & 45 MW steam turbine generator sets from Philippines and Myanmar.

Future Potential:

Going by the trend of new countries and markets penetrated as well as new clients added, they believe that their sales prowess will grow significantly in the years to come. They also hope to have continued business from their major clients like Cabot Corporation for their projects worldwide and from major OEMs such as Wartsila, Finland. Based on their current feedback, they expect to have a significantly larger export order book during the year October 07-September 08 compared with previous year.

Cabot Corporation USA, a world leader in carbon black manufacturer, gave Triveni its first turbine order for the Indonesian plant. This was followed by two more orders for their Indian Facility and Italian Facility. This speaks of the quality, delivery and technological competence of our Turbine manufacturing facility.

Service and Spares - Seeds of future growth:

With the increase in number of higher MW turbines sold during the past couple of years, servicing and sale of spares on these have started accruing. Significant growth in Service and Spares business, which offers higher margins, has been achieved during FY 07. In order to meet the increasing demand in services and spares, the company is focusing in the area of customer care and the motto is to provide customer service within the shortest time and in almost all cases, within 24 hours of registering the call their service engineer would be at the client site. To ensure complete customer satisfaction, they are fully equipped to respond to emergency calls through their 13 service centres spread across the country Approximately 30% of the business units' personnel are dedicated to their after-sales program. They also provide service support to non-company brand of turbines

Refurbishing promises higher growth in coming years they have already booked a record breaking single order for 2 X 57 MW Alsthom turbine in FY 07 With this break through order, they expect to have more such orders in future Other main activities carried out are:

Refurbishment and Residual Life Assessment (RLA) of all makes of turbines/compressors/blowers/pumps in India as well as overseas.

Upgradation of old turbines for higher power output as well as to meet changing requirements of customer process requirements.

Overhauling and troubleshooting services for all makes of turbines.

Full speed balancing machine, a state-of-the-art equipment from SCHENCK, Germany, one of its kind with a manufacturer of our size, is used for balancing of turbine/ compressor/alternator/gas turbine, rotors around 150 MW capacity depending on the size of the rotor.

Unique capability in India for high speed balancing of flexible rotors by using CABELEX software.

Gas Engine Business:

The growth in business of distribution and servicing of Waukesha Gas Engines has seen some major milestone in FY 07 We have booked a prestigious order of 7 X 1 MW Wauksha High Efficiency Gas Engine generator sets, which is so for the biggest ever order booked and they expect order book to grow in the near future.

New Business Opportunities:

Steam Turbine line:

An agreement with Beijing BEIZHONG Steam Turbine Generator Company Limited. (BZD) for marketing and distribution of steam Turbines up to 330 MW in India.

Company will be distributing and marketing BZD products by offering power solutions upto 330 MW which will consist of steam turbines, alternators, condensing and cooling systems along with electricals and power evacuation systems; Company will also sell the balance of plant and provide after sales support. The agreement facilitates company to enter into Technology Transfers and the company will work towards these in the future.

BZD, a subsidiary of the state owned Beijing Jingcheng Mechanical and Electrical Holding Company Limited. is a technology leader and fourth largest steam turbine manufacturer in the People's Republic of China with products offering power solutions up to 660 MW.

Oil and Gas line:

An agreement with GE Oil and Gas Operations LLC, USA for packaging and marketing of High-speed Reciprocating Compressors.

GE's agreement with Company will consist of an initial term of five years and will involve the import of bare (Flange-to-Flange) compressors from GE Oil and Gas' Oshkosh, Wisconsin, USA facility. Company will do the engineering design, manufacturing and assembly of the package. It will also procure drivers and the rest of the components for packaging in India. Company will be the customer point of contact in India for both selling of the packaged product and the after-market sales and service.

GE's world-renowned compressors, formerly known by their popular Gemini brand name, are used across the Oil and Gas sector Common applications for these compressors are for well-head gas gathering, vapor recovery, gas reinjection, gas lift, pipeline gas transmission, gas storage and fuel gas boosting.

Agreement for manufacturing of precision components in their works for Schlumberger, USA and France.

Schlumberger is the world's leading supplier of technology, project management and information solution provider to the Oil and Gas Industry Schlumberger has entered into an agreement with Triveni for manufacturing various high precision components for its customers, based on their manufacturing infrastructure and capabilities for manufacturing such precision parts. Triveni will be using the existing infrastructure for manufacturing such components.

Capacity and Capability Additions:

The activities for increase in factory capacity by more than 80% over the previous year are over and all planned machinery are purchased and installed, except for the CNC Vertical Turret bathe which is expected to be commissioned by the second quarter of FY 08 High precision multiple 4-axis CNC machining centre were set up for manufacturing complex blade profiles. All Test Beds in the new Bay extensions were made operational and also commissioned the Boiler, Condenser, Cooling Towers etc., for full speed steam testing. With the installation of the state-of-the-art WFL Mill Turn Machine, machining of rotor with various root profiles will enhance the throughput with precision A5-axis blade manufacturing has been ordered.

Full speed balancing tunnel - SCHENCK balancing machine- for balancing of turbine/compressor/alternator/gas turbine, rotors around 150 MW capacity has been installed.

For facilitating smooth operations, tool crib operations were streamlined by rearranging all the tools systematically and instituting structured procedures for procurement issues and accounting of all tools.

State-of-the-art equipments and software installed the world's turbine manufacturers, makes the Turbine facility at Bangalore, world class.

Technology & Development:

Technology and development is the hey in their engineering business Continual programmers are taken up for improving the efficiencies of the existing range of turbines as well as further development of new models to cater to various Industrial segments. Similarly, continuing efforts are on to bring down the cost through value engineering using technology as a tool some of the major activities are listed as under:

The new 15 MW extraction condensing model developed and launched by them incorporating twisted and tapered blades has been successfully tested and is at customer's site for steam-rolling.

Development of 20 MW back pressure turbine is in advanced stage Development of new high-pressure high temperature 30 MW model is under progress and is in the process of designing and developing higher MW blades The pursuit for development of new models in the higher ranges and endeavouring to improve the efficiencies are also the focus of their R&D team

Associations with institutions such as I.I.Sc, Bangalore and NAL, Bangalore have been strengthened and various product improvement and validation initiatives are underway in association with expert scientists from these institutions.

Quality Assurance:

The Quality Management System continues to be certified for ISO 9001-2000 and Environmental Management System is certified for ISO 14001-2004 Performance guarantees were met for all the turbines commissioned during the period. Quality improvements form an Integral part of the system and are effected through various initiatives the Six Sigma, Just in Time etc. Expert guidance for quality improvements is being provided by Professors from JIT Laboratories, Japan, Indian Statistical Institute, Bangalore, Confederation of Indian Industries etc., 30 Officers are trained as Black Belts and about 50% of the officers are trained as Green belts in Six Sigma methodology for process improvements One of their Six Sigma process improvement projects has been selected and published in the "Guidebook For Six Sigma With Read Time Applications" released by Indian Statistical Institute and Quality Council of India during April 2007 dean concepts to achieve Just in Time production are initiated and expected to be in place in near future.

Future Outlook:

Triveni Khushali Bazaar plans to experiment with various business models at its established stores to gauge customer reaction and feedback before pursuing an aggressive growth plan. Since the business is still in an evolutionary stage and with the adoption of various business models to optimise the operations, they expect the operations and margins to stabilise in future With the first mover advantage in the areas of our operations, TKB will be able to take the benefit of future growth in these markets and make efforts to expand its operations to other areas of Uttar Pradesh and Uttarakhand. Major focus would be to strengthen and expand the non-agri and finance verticals so as to cater to a larger customer base. The expansion of life style products range in the non-agri vertical will enable us to move Into more developed townships and B-class cities.

Website Details:

Management Team:

Mr. Dhruv M. Sawhney, Chairman & Managing Director graduated with a Masters in Mechanical Sciences from Emmanuel College, University of Cambridge, U.K. and M.B.A with distinction from the Wharton School, University of Pennsylvania, U.S.A. He was on the Dean's list for all terms, came second in the University, and is a life member of Beta Gama Sigma. Mr. Sawhney has received the highest civilian award "Chevalier de la Legion d'Honneur" from President Chirac of the French Republic.

Mr. Sawhney is a Past President of the Confederation of Indian Industry (CII), the Indian Sugar Mills Association and the Sugar Technologists Association of India. He was the first Chairman from the developing world of the International Society of Sugar Cane Technologists. Mr. Sawhney has served on the Board of various public sector organizations and chaired Government advisory councils on Industry, Energy and Sugar. He chairs the Commonwealth Leadership Development Conferences founded by HRH Prince Philip, The Duke of Edinburgh in 1956 to foster and broaden the understanding and decision-making ability of individuals in the commonwealth countries. Mr Sawhney is Deputy Chairman of the Evian Group and Chairman of the India Steering Committee of the World Economic Forum, Switzerland. He also chairs CII's International and Internal Audit Committees.

Mr. Sawhney takes a keen interest in education, and was a past Governor of the Indian Institute of Management, Lucknow, the Management Institute at the University of Delhi and Chairman of the Doon School, Dehra Dun, one of India's most famous Public Schools. He is a Companion Member of the Chartered Institute of Management, U.K. and chairs the Board of Trustees of Delhi's oldest private charitable hospital. He was President of the All India Chess Federation for 12 years.

Mr. A.K. Tanwar, President (Sugar), has a Bachelors degree in Electrical Engineering and an Associate of National Sugar Institute (Sugar Engineering) from the NSI, Kanpur.

He joined as Vice President (Sugar) as Unit Head at Deoband in 1996 and subsequently given charge of additional Units. In the year 2005 he was elevated to the position of President (Sugar) and given charge of all the Sugar Units of the Company. Prior to joining Triveni, he had worked with Kashipur Sugar Unit and various Co-operative Sugar factories in U.P.

Mr. Vikram Raina, Group Advisor studied at the Mayo College, Ajmer and Delhi University. He began his professional career with the reputed Birla Group and is today an active member of the Indian commercial mainstream, having successfully pioneered the development of Mini Hydel Turbines on the Indian canal network for power generation, in rural areas. He has been closely associated with Triveni since 1988 and leads all external communication initiatives for the group including on policy issues with Government of India, State Governments, Sugar Industry Associations, etc.

His wide range of interests include, the promotion of a website Spiritualageindia.com, freelance journalism and frequently co-ordinating seminars on Holistic issues. He has also hosted several television shows and penned a book "The Holistic Path to Joy" and is currently working on two more books.

Mr. Arun Mote, Chief Executive Officer (Turbine Business Group), has a Masters degree in Technology from the IIT-Bombay and a Masters degree in Business Administration from the Jamnalal Bajaj Institute of Management Studies, Bombay University.

He joined the Company in 1999 and prior to that he was President with Magneti Marelli. He has earlier worked with Larsen & Toubro, SKF Bearings, Blue Star and HPL Gmmco (a Caterpillar Associate).

Mr. Suresh Taneja, Vice President and Chief Financial Officer, has a Bachelors degree in Science from Delhi University and is a Fellow of Chartered Accountants from the Institute of Chartered Accountants.

He joined the Company in 1994 and has earlier worked with Oman National Transport Company, Muscat and Eicher Tractors.

Mr. V.P. Ghuliani, Vice President (Legal & Company Secretary), has a Bachelors degree in Arts from Delhi University and a Bachelors degree in Law from Meerut University. He is a Fellow Member of the Institute of Company Secretaries of India.

He joined the Company in 1977 with the past experience of 14 years.

Mr. Tarun Sawhney, Corporate Vice President, is a promoter of the company. He has a Masters degree in Arts from the Emmanuel College, University of Cambridge, UK and a Masters degree in Business Administration from the Wharton School of Business, University of Pennsylvania, US.

Mr. Sawhney has work experience in the fields of e-business, telecommunications, information technology, and financial and portfolio analysis. He worked with AT Kearney Inc., UK, a management consultancy firm from 1998 to 2000.

He has been associated with their company since February 1, 1996 and currently occupies the post of Corporate Vice President in their company.

Mr. Nikhil Sawhney, Corporate Vice President is a promoter of our company. He has a Bachelors degree in Arts and a Masters degree in Arts from the Emmanuel College, University of Cambridge, UK and a Masters degree in Business Administration from the Wharton School of Business, University of Pennsylvania, USA.

Mr. Sawhney has worked in India and overseas in the fields of finance, consumer goods, engineering products and capital markets. He worked with Flexibox Ltd., Manchester, UK in 1996 as a Marketing Analyst, with Nomura International, London, UK in 1997 as a Capital Markets and Sales Analyst, with ING Barings, London, UK in 1998 as a Corporate Finance Analyst, and with Nestle USA, Los Angeles, USA in 2003 as a Marketing Associate.

He has been associated with their company since October 1, 1999 and currently occupies the post of Corporate Vice President in their company.

Mr. Sameer Sinha, Vice President (Power, Alcohol & Corporate Planning), has a Bachelors degree in Technology from the Indian Institute of Technology, Kanpur and a Post Graduate Diploma in Management from the Indian Institute of Management, Ahmedabad.

He joined the Company in 1994 and Prior to that he has worked with Vam Organics, Shaw Wallace and Larsen and Toubro.

Mr. Bharat Mehta, Vice President & Chief Human Resources Officer, has Masters Degree in Sociology, PG. Dip. in Personnel Management and P.G. Dip. in labour Laws. He started his career as Lecturer in Udaipur University and has subsequently worked with J.K. Industries and DCM Shriram Group prior to joining Triveni in 1997.

Mr. M. A. Qureshi, Chief General Manager, Sugar Unit, Ramkola is B.E. (Mech.). He joined the Company in 2002 and prior to that has worked for over 32 years with private, co-operative and U.P. Sugar corporation mills.

Mr. Rajiv Rajpal, Chief General Manager, Gear Business Group is B.E. (Mech.). He joined the Company in 1991 and prior to that has worked with Thermax, HCL and Vijayshree Equipments. Currently he occupies the position of Chief General Manager (GBG)

Mr. B. K. Agrawal, Chief General Manager (Water Business Group), is B.E. (Chemical) from University of Roorkee (now Indian Institute of Technology, Roorkee). He joined Triveni as Engineer in 1979 and has worked in various positions. Currently he occupies the position of Chief General Manager (WBG).

Mr. Kuldip Singh, Chief General Manager, Sugar Unit, Khatauli is B.Sc. (Hons.) in Agriculture. He joined the Company in 2005 and prior to that has worked for over 23 years with Simbhaoli, Bajaj Hindusthan and DCM Shriram Group sugar factories.

Mr. D.N. Mishra, General Manager, Sugar Unit, Deoband, is M.E. (Production) & ANSI (Sugar Engineer). He joined Triveni in 2006 and prior to that has worked for 28 years with U.P. State Sugar Corporation Ltd.

Mr. Amod Sharma, General Manager, Sugar Unit, Chandanpur, is B.Sc., ANSI (Sugar Technology). He joined Sugar Unit Deoband as Head of Production Department in 1999 and was elevated as Unit Head of Sugar Unit Chandanpur in 2006. Prior to joining Triveni he has worked for 15 years with Mansurpur, Kashipur, Pilibhit & Shamli sugar factories.

Mr. Ashok Kumar, General Manager, Sugar Unit, Milaknarayanpur, is B.Sc., ANSI (Sugar Technology). He joined Triveni in 2006 and prior to that has worked for 29 years with Markfed Sugar & Allied Industries, Diwan Sugar & Monnet Industries.

Mr. Pradeep Tyagi, General Manager, Sugar Unit, Sabitgarh, is M. Sc., ANSI (Sugar Technology) from NSI Kanpur. He joined Triveni in 2007 and prior to that has worked for 25 years with DSCL Sugar Ajabpur, Balrampur Chini Mills, DSM Sugar, Upper Ganges Sugar and Daurala Sugar Works.

Mr. V. Venkatarathnam, General Manager, Sugar Unit, Raninangal, is B.E. (Mech.), ANSI (Sugar Engg.) from NSI Kanpur and B.O.E. He joined Triveni in 2007 and prior to that has worked with DSCL Loni, Bajaj Hindusthan, Monnet Sugars and Oswal agro.

NEWS RELEASE:

GE OIL & GAS AND TRIVENI ENGINEERING SIGN AGREEMENT TO TAP THE FAST GROWING HIGH SPEED RECIPROCATING COMPRESSOR MARKET IN INDIA

NEW DELHI, INDIA – 22 October, 2007 – General Electric Company’s (GE) Oil & Gas business has signed an agreement with Triveni Engineering and Industries Limited (Triveni) to enter the fast growing High Speed Reciprocating (HSR) Compressor Market in India.

GE’s agreement with Triveni will consist of an initial term of five years and will involve the import of bare (Flange-to-Flange) compressors from GE Oil & Gas’ Oshkosh, Wisconsin, USA facility. Triveni will do the engineering design, manufacturing and assembly of the package. It will also procure drivers and the rest of the components for packaging in India. Triveni will be the customer point of contact in India for both selling of the packaged product and the aftermarket sales and service.

GE’s world-renowned compressors, formerly known by their popular Gemini brand name, are used across the Oil & Gas sector. Common applications for these compressors are for wellhead gas gathering, vapor recovery, gas reinjection, gas lift, pipeline gas transmission, gas storage and fuel gas boosting.

“Oil & Gas is a big part of India’s Infrastructure growth. Our agreement with Triveni is a key step in our localization and partnership strategy which will enable us to serve our customers In-India-From-India,” said Pratyush Kumar, President & CEO of GE Infrastructure, India.

Commenting on the strategic partnership with GE, Mr. Dhruv M Sawhney, Chairman and Managing Director said “Triveni’s world class manufacturing facility at Bangalore has got further credence through this strategic partnership.GE technology and quality at Indian prices would be the key deliverable from this relationship. We see a buoyant oil and gas market in India in the coming years and we are certain that Triveni with GE association will make a mark in this market by providing the world’s best technology to the Indian customer. The market for HSRs should be about 5 billion rupees per annum and in line with our market leadership in all our existing product lines, we aim to be the leader in this product segment as well.”

“To sustain India's current growth levels, energy and oil and gas sectors will become even more important in the future. Almost all Indian and International oil and gas major companies are planning extensive investment over the next few years. For example, there will be more than $70B of investments in the oil and gas sector alone in India in next five years,” said Riccardo Procacci, Country Manager for GE Oil & Gas in India. ”This agreement with Triveni shows GE Oil & Gas’ commitment to India. Besides improving our cost competitiveness, partnering with a local player like Triveni will also improve our pre-sale and post-sale customer support and responsiveness ... a win-win for both GE and our customers”.

GE Oil & Gas is a global leader in supplying technology-based equipment and services for the entire oil and gas industry with a local presence in 70 locations around the world and more than 10,500 employees providing expert, local service whenever and wherever it is needed. The company’s Indian operations have over 120 employees; including 100 engineers at GE’s Bangalore based John F Welch Technology Center. Headquartered in New Delhi, GE Oil & Gas has sales and service offices in Ahmedabad, Baroda, Chennai, Delhi and Mumbai.

Triveni’s Bangalore facility which manufactures precision engineering products like Steam turbine had undergone significant expansion and modernization with the installation of state of the art equipments and software to produce worldclass products backed up by a strong nation-wide service network and is one of the best in the world. Triveni’s entry into Oil & Gas segment with GE is the result of the building of a world-class engineering facility matching with the requirements of meeting the quality and technology norms akin to GE.

GE’s High Speed Reciprocating Compressors are known for their flexibility and reliability. GE offers a full line of high speed reciprocating compressors, ranging from 30 HP (22KW) to 9000 HP (6.7MW), with a variety of piston rod load capacities and frame stroke combinations. Over 10,000 of GE’s HSR compressors can be found around the globe, working in gas boosting, gathering, lifting, fueling and injection applications – operating 24 hours a day, seven days a week.

Commenting on the new business initiative of Triveni, Chief Executive Officer, Turbine Business Group, Mr. Arun Mote, said, “The Oil & Gas business will be a part of this business division and will be led by Mr. Milind Warke, General Manager, from our office in Mumbai.”

About Triveni Engineering & Industries Limited

Triveni Engineering & Industries Ltd. (‘Triveni’) is one of India’s leading companies engaged in the manufacture of sugar and engineered-to-order mechanical equipment, such as steam turbines, high speed gears and water and wastewater treatment equipment. The company’s core strength in the engineering business emerges from its focus on high quality, high technology and continuing focus on research & development strongly supported by after sales service network. The company has created a niche for itself in the engineered to order mechanical equipment space with market leadership in steam turbines and high-speed gears in its applicable market segments. In the sugar business, Triveni has a daily sugar cane crushing capacity of 61000 tonnes with 68 MW of co-generation capacity and 160,000 litres of distillery. For further information on the Company, its products and services please visit www.trivenigroup.com

About GE's Oil & Gas business

GE's Oil & Gas business is a world leader in advanced technology equipment and services for all segments of the global oil and gas industry. Based in Florence, Italy, the company offers complete solutions for production, LNG, transportation, storage, refineries, and petrochemicals, as well as pipeline integrity solutions including pipeline inspection related software and pipeline asset management. Through its recent acquisition of VetcoGray, GE Oil & Gas has added products, systems and services for onshore and offshore drilling, completion and production to its portfolio.

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.42.37
UK Pound	1	Rs.84.01
Euro	1	Rs.65.96

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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	YES
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		72

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

MIRA INFORM REPORT

4208.100

4047.900

942.800

1003.440

254.300

259.190

0.000

2.740

4739.600

870.660

10144.800

6183.930

5251.900

2123.650

1146.300

487.600

6398.200

2611.250

3746.600

3572.680

Unit