MIRA INFORM REPORT

Report Date :

13.02.2008

IDENTIFICATION DETAILS

Name :	SAKTHI SUGARS LIMITED
Registered Office :	Sakthinagar-638315, Bhavani Taluk, Erode District, Tamilnadu
Country :	India
Financials (as on) :	30.06.2007
Date of Incorporation :	12.05.1991
Com. Reg. No.:	396
CIN No.: [Company Identification No.]	L15421TZ1961PLC000396
TAN No.: [Tax Deduction & Collection Account No.]	CMBS03275G
Legal Form :	Public limited liability company. Company’s Shares are listed on the Stock Exchange.
Line of Business :	Manufacture and market crystal sugar, industrial alcohol, iron castings, soya products, sunflower oil, molasses, fertilizers, chemicals, seeds, bio earth and other industrial products.

RATING & COMMENTS

MIRA’s Rating :

Aa

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 16000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and reputed company having fine track. Available information indicates high financial responsibility of the company. Trade relations are fair. Business is active. Payments are reported as usually correct and as per commitments. The company can be considered good for normal business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office / Sugar Unit, Distillery Unit, Ethanol & Co-generation plant :	Sakthinagar-638315, Bhavani Taluk, Erode District, Tamilnadu, India
E-Mail :	shares@sakthisugars.com
Website :	http://www.sakthisugars.com
Corporate Office :	180, Race Course Road, Coimbatore - 641 018, Tamilnadu
Tel. No.:	91-422-4322 222 / 2221551 - 2 - 3 - 4
Fax No.:	91-422-2220574 / 4322488
Sugar Unit & Beverage Plant and Co-generation plant under implementation :	Padamathur Village - 630 56, Sivaganga District, Tamilnadu
Sugar Unit & Distillery Unit :	Haripur Village,Korian Post - 759 013, Dhenkanal District, Orissa
E-Mail :
Sugar Unit & Co-Generation plant :	Poonthurai Semur Post - 638 115, Erode District
Soya Unit :	Marchinaickenpalayam, Ambarampalayam Post - 642 103, Coimbatore District

DIRECTORS

Name :	Dr N Mahalingam
Designation :	Chairman
Name :	Mr. M Manickam
Designation :	Vice Chairman & Managing Director
Name :	Mr. V K Swam I Nathan
Designation :	Executive Director
Name :	Mr. M Balasubramaniam
Designation :	Director
Date of Birth/Age :	06.05.1958-49 Years
Qualification :	M.Com., M.B.A(Notredame, USA)
Experience :	Rich industrial business experience
Date of Appointment :	21.08.1989
Other Directorship :	Sakthi Finance Limited Sri Bhagavathi Textiles Limited Sri Sakthi Textiles Limited Sakthi Auto Component Limited Sri Chamundeswari Sugars Limited ABT Limited ABT Industries Limited ABT Values Limited ABT Finance Limited Sakthi Management Services (Coimbatore) Limited Sakthi Properties (Coimbatore) Limited Sakthi Logistic Services Limited The Gounder and Company Auto Limited ABT Foods Retailing (India) Limited The Union Bus Service (P) Limited ABT Textiles Private Limited
Member of Committees :	i. Sri Chamundeswari Sugars Limited Shareholders/Investors Grievance Committee ii. Sakthi Sugars Limited Audit Committee and Shareholders/Investors Grievance Committee ill. Sakthi Finance Limited Shareholders/Investors Grievance Committee
Name :	Mr. P K Chandran
Designation :	Director
Name :	Mr. G G Gurumurthy
Designation :	Director
Name :	Mr. S S Muthuvelappan
Designation :	Director
Date of Birth/Age :	5.12.1941 -65 Years
Experience :	Rich experience in sugarcane cultivation
Date of Appointment :	18.02.1985
Other Directorship	Biomed Hitech Industries Limited
Name :	Mr. M Srinivaasan
Designation :	Director
Name :	Mr. N K Vijayan
Designation :	Director
Date of Birth/Age :	22.05.1952-55 Years
Qualification :	M.Com
Experience :	Rich experience in sugarcane cultivation
Date of Appointment :	01.01.1995
Other Directorship :	Biomed Hitech Industries Limited
Name :	Mr. K V Ramaswamy
Designation :	Director
Date of Birth/Age :	12.01.1939-68 Years
Qualification :	F.C.A.
Experience :	Practicing Chartered Accountant for more than 3 decades
Date of Appointment :	27.12.2006
Other Directorship :	Remuneration Committee Audit Committee
Name :	Mr. S Doreswamy
Designation :	Director
Date of Birth/Age :	30.9.1937-69 Years
Qualification :	B.Sc., B.L.
Experience :	Rich experience in Banking Sector
Other Directorship :	Can Fin Homes Limited Ceat Limited Pantaloon Retail (India) Limited Caliberpoint Business Solutions Limited DSP Merrill Lynch Trustee Company Limited Kaytee Switchgear Limited

KEY EXECUTIVES

Name :	Mr. C Rangamani
Designation :	(Nominee of GICI)
Name :	Mr. K Davidson
Designation :	(Nominee of IDBI)
Name :	Mr. B Ramakrishnan
Designation :	(Nominee of TIDCO)
Name :	Mr. S Baskar
Designation :	Vice President - Finance & Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters and associates	12207037	38.91
Nationalised Banks/other Banks	42850	0.14
Financial Institutions	1121692	3.58
Mutual Funds	7280	0.02
FIIS/NRIS	4546933	14.49
Private Bodies Corporate	3092288	9.86
Public	10354986	33.00
Total	31373066	100.00

BUSINESS DETAILS

Line of Business :

Manufacture and market crystal sugar, industrial alcohol, iron castings, soya products, sunflower oil, molasses, fertilizers, chemicals, seeds, bio earth and other industrial products.

Products :

Item Code No. (ITC Code)	Product Description
17.01	Sugar
22.07	Industrial Alcohol
15.07	Soya Products

PRODUCTION STATUS

Particulars	Unit	Installed Capacity
Sugar - Unit at Sakthinagar	Tonnes of Cane Crush / Day	9000
Sugar - Unit at Sivaganga	Tonnes of Cane Crush / Day	4000
Sugar - Unit at Haripur	Tonnes of Cane Crush / Day	2000
Industrial Alcohol - Sakthinagar Unit	Kilo Litres per annum	27500
Industrial Alcohol - Haripur Unit	Kilo Litres per annum	10000
Co- Generation unit at Sakthinagar	MW	32
PVC Corrugated Rings	Tonnes per annum	800
Soyabean	Tonnes per annum	90000
Molasses	Tonnes	160095.330

GENERAL INFORMATION

No. of Employees :

1464

Bankers :

• Allahabad Bank
• Bank of India
• Canara Bank
• IDBI Bank Limited
• Indian Overseas Bank
• Oriental Bank of Commerce
• Punjab National Bank
• State Bank of India
• Centurion Bank of Punjab Limited
• Citibank NA

Facilities :

SECURED LOANS	Rs in Millions [As on 30.06.2007]
A. DEBENTURES :
Non-convertible Debentures - X Series	110.239
Interest accrued and due on the above	2.420
LOANS AND ADVANCES:
FROM BANKS
a) Term Loans	5378.286
Interest accrued and due on the above	47.546
b) Hypothecation Loans for working capital	427.842
Interest accrued and due on the above	0.848
c) Bills Discounted from Banks	117.037
FROM FINANCIAL INSTITUTIONS
Term Loans	1314.819
Interest accrued and due on the above	8.500
FROM OTHERS
i) From Government of India/TIFAC	76.515
Interest accrued and due on the above	7.361
ii) Hire Purchase /Mortgage Loans from Limited companies	12.868
Interest accrued and due on the above	0.141
UNSECURED LOANS
Fixed Deposits	274.346
Other Loans and Advances	1316.427
Interest accrued and due on the above	22.071

Banking Relations :	Satisfactory
Auditors :
Name :	P N Raghavendra Rao and Company Chartered Accountants
Address :	Coimbatore
Subsidiaries :	Sakthi Auto Component Limited (SACL) Sakthi Auto Ancillary Private Limited (SAAPL) Tilan Sugar Limited
Associates :	Sri Chamundeswari Sugars Limited ABT Limited Sakthi Finance Limited Sakthi Soyas

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
5,00,00,000	Equity Shares	Rs.10/- each	Rs. 500.000 Millions
50,00,000	Redeemable Cumulative Preference Shares	Rs.100/- each	Rs. 500.000 Millions
	Total		Rs. 1000.000 Millions

Issued Capital :

No. of Shares	Type	Value	Amount
3,14,89,735	Equity Shares	Rs.10/- each	Rs. 314.897 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
3,13,73,066	Equity Shares	Rs.10/- each	Rs. 313.731 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		30.06.2007	30.06.2006	30.06.2005
SHAREHOLDERS FUNDS
1] Share Capital		313.731	433.731	433.700
2] Share Application Money		156.600	156.600	0.000
3] Reserves & Surplus		3563.622	3460.636	2994.800
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		4033.953	4050.967	3428.500
LOAN FUNDS
1] Secured Loans		7504.422	5165.666	5070.400
2] Unsecured Loans		1612.844	916.124	684.300
3] Foreign Currency Convertible Bonds		2445.000	2752.200	0.000
TOTAL BORROWING		11562.266	8833.990	5754.700
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		15596.219	12884.957	9183.200
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		5245.247	5060.707	5784.900
Capital work-in-progress		2868.084	213.773	14.300
INTANGIBLE ASSETS		619.348	696.308	0.000
INVESTMENT		1701.626	601.885	512.300
DEFERREX TAX ASSETS		118.053	118.053	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	809.711	462.103	825.000
	Sundry Debtors	250.941	649.749	294.700
	Cash & Bank Balances	911.335	2747.515	142.000
	Other Current Assets	616.770	885.374	0.000
	Loans & Advances	3634.637	2476.789	3675.000
Total Current Assets		6223.394	7221.530	4936.700
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	1253.791	944.653	2102.600
	Provisions	56.058	123.075	1.000
Total Current Liabilities		1309.849	1067.728	2103.600
Net Current Assets		4913.545	6153.802	2833.100
MISCELLANEOUS EXPENSES		130.316	40.429	38.600
TOTAL		15596.219	12884.957	9183.200

PROFIT & LOSS ACCOUNT

PARTICULARS		30.06.2007	30.06.2006	30.06.2005
Sales Turnover		7464.767	8729.927	6414.200
Other Income		399.061	90.520	58.300
Total Income		7863.828	8820.447	6472.500
Profit/(Loss) Before Tax		301.123	952.804	274.500
Provision for Taxation		--	--	4.300
Profit/(Loss) After Tax		301.123	952.804	270.200
Earnings in Foreign Currency :
	FOB Value of Exports	1188.387	1637.548	NA
Imports :
	Stores & Spares	2.828	1.344	NA
	Capital Goods	335.923	24.462	NA
Total Imports		338.751	25.806	NA
Expenditures :
	Cost of Goods Consumed / Sold	42.17.734	47.12.824	3834.700
	Increase/(Decrease) in Finished Goods	[253.824]	196.406	[80.700]
	Manufacturing expenses	1431.008	1335.604	275.300
	Excise Duty on stock adjustments	26.017	[11.208]	227.400
	Salaries, Wages and other employee benefits	311.621	306.418	233.400
	Interest Charges	991.615	839.017	500.500
	Selling expenses	148.276	169.133	159.200
	Any other expenses	478.537	115.394	932.400
	Intangible Asset Written off	76.960	73.288	0.000
	Depreciation	134.087	121.885	115.800
Total Expenditure		3387.201	3193.881	6198.000

QUARTERLY RESULTS

PARTICULARS	30.09.2007	31.12.2007
Type	1^ST Quarter	2^nd Quarter
Sales Turnover	1715.700	1520.300
Other Income	10.100	17.400
Total Income	1725.800	1537.700
Total Expenditure	1688.100	1339.600
Operating Profit	37.700	198.100
Interest	216.300	210.200
Gross Profit	[178.600]	[12.100]
Depreciation	38.000	45.800
Tax	0.000	0.000
Reported PAT	[216.600]	[57.900]

KEY RATIOS

PARTICULARS		30.06.2007	30.06.2006	30.06.2005
PAT / Total Income	(%)	3.83	10.80	4.17
Net Profit Margin (PBT/Sales)	(%)	4.03	10.91	4.28
Return on Total Assets (PBT/Total Assets}	(%)	2.63	7.76	2.56
Return on Investment (ROI) (PBT/Networth)		0.07	0.24	0.08
Debt Equity Ratio (Total Liability/Networth)		3.19	2.44	2.29
Current Ratio (Current Asset/Current Liability)		4.75	6.76	2.35

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Sakthi Sugars is into the business of Sugar and industrial alcohol and Soya products. It is being spearheaded by M.Manickam Vice Chairman and Managing Director and he is also the son of Dr. N Mahalingam who is the Chairman of Sakthi Sugars. The company has 3 units with crushing capacities of 6000 TCD, 4000 TCD and 2500 TCD respectively. 

SSL took over a 1250-tcd sugar unit on a 10-year management contract basis from the Badamba Co-operative Sugar Industries in 1991 with an option to extend the contract for a further period of 10 years. It has also established a modern sugar unit with a crushing capacity of 2500 tcd which commenced operations during 1994-95.  

Apart from the four sugar units, Sakthi Sugars has two distilleries and a foundry. The capacity of the foundry was expanded to 24,000 tpa. The company entered into technical collaboration with George Fischer Foundry, Switzerland, to supply state-of-the-art manufacturing technology.  

Sakthi Soyas, a group company, was merged into SSL with effect from 1st, Apr.'93. The unit has an installed capacity of 1,00,000 tpa to produce refined oil, de-oiled cake, full-fat soya meal, soya flour flakes and texturised vegetable protein. SSL has installed a new unit at Haripur for industrial alcohol with an installed capacity of 10000 KL pa.  

During 1997 the new disamatic foundry wing commenced its production with SG Iron Casting and Graded Iron Casting with a annual capacity of 2600 MT and 1000 MT p.a. The capacities of both the products was increased 14400 MT and 9600 MT p.a respectively. As a restructuring measure the company has hived off its foundry division to wholly owned subsidiary viz Sakhti Auto Components Limited from April, 2000. 

The crushing capacity of Sakthi Nagar Unit was increased 6000 TPD in October, 1998. 

The company has taken up implementation of co-generation project at Sakthinagar Sugar Unit. The installed capacity of the proposed co-generation plant is 35 MW. The Co-generation project could not be started off as per schedule and the same is expected to be commissioned in October, 2003. An incidental 2 MW co-generation at Sivaganga Sugar unit has commenced its operations from April, 2002.  

The process for setting up a beverage project with Hindustan Coca-Cola Beverages is complete and the plant is ready for operation. Necessary permission from the State Government is expected to commence commercial production. It has entered into JV with TNPL under which the bagasse produced by the company will be exchanged for steam required for operation of the mill and the boilers at Sakthinagar. 

The Sakthinagar Distillery Division has intalled Ethanol plant with an annual capacity of 50000 ltrs per day and trial production commenced on June,2003 and supply of ethanol to oil companies is expected to commence shortly.

REVIEW OF OPERATIONS: 

SUGAR DIVISION: 

The quantum of cane crushed at various units of the Company for the year 2006-2007 is as under: 

Sakthinagar Unit : 22,21,452 tonnes

Sivaganga Unit : 10,03,955 tonnes

Dhenkanal Unit : 2,51,796 tonnes 

The free sale/levy sale ratio remains at 90:10. 

During the year under review, 3,32,233 tonnes of sugar was manufactured out of cane crush and 4,763 tonnes out of raw sugar refining. The Company exported 85,170 tonnes of sugar. Due to increased sugar production in India, the sugar prices have sharply decreased to uneconomical levels resulting in erosion in the profits of the Company. International sugar prices are also at very low levels due to record sugar production. 

In the current year, the sugar production is expected to be higher than the previous year and sugar prices may continue to remain at depressed levels. 

The installed capacity of Sakthinagar Sugar Unit has been enhanced to 9000 TCD and the new sugar mill with 3500 TCD at Poonthurai Semur, Modakurichi, Erode District has commenced its operation on 7th September 2007. 

DISTILLERY DIVISION:

During the year under review, 28.009 Million litres of industrial alcohol was produced at Sakthinagar Unit and 4.040 Million litres at Dhenkanal Unit. The capacity of distillery at Sakthinagar has been enhanced during the current year. 

In the current year, 56.300 Million litres of industrial alcohol is expected to be produced. 

ETHANOL PLANT: 

During the year under review, 0.900 Million litres of Anhydrous Alcohol (Ethanol) was produced and 0.972 Million litres was sold to oil companies viz., Bharat Petroleum Corporation Limited, Hindustan Petroleum Corporation Limited and Indian Oil Corporation Limited Since the State Government has not given permission for supply of ethanol to oil companies, production of ethanol has been suspended. 

SOYA DIVISION: 

65,677 tonnes of soya bean has been crushed in the soya plant during the year under review. Out of the total crushing in the plant, 44,304 MT were on contract basis. This division exported products worth Rs.143.389 Million to various countries. 

CO-GENERATION PLANT: 

The 32 MW Co-generation plant at Sakthinagar generated 246.903 Million units of power and evacuated 165.361 Million units of power to the State Grid of Tamil Nadu Electricity Board. The performance of the plant was satisfactory. 

The Company's second Co-generation plant with 25 MW in the new sugar mill premises at Poonthurai Semur, Erode District commenced operations from 7^th September 2007.  

The other two Co-generation plants at Sakthinagar and Sivaganga with an aggregate capacity of 60 MW are under implementation and are expected to go on stream during the current year. 

The 2 MW Incidental Co-generation plant at Sivaganga Sugar Unit generated and transferred to State Grid 0.523 Million units of power during the year under review.  

BEVERAGE DIVISION: 

As the Beverage plant at Sivaganga has not been commissioned for want of necessary approval from the State Government, alternative plans for putting the asset to effective use are being considered. 

FUTURE OUTLOOK: 

Excess production of sugar over demand with huge opening balance for the current season will have negative impact on sugar prices. However, with the commissioning of the cogeneration plants under implementation at Sakthinagar and Sivaganga during the current financial year, the revenue pattern of the Company will be more or less stable taking care of the cyclical movements in Sugar Division. 

SUBSIDIARY COMPANIES: 

The Company has acquired the entire equity share capital of Tilan Sugar Limited. By virtue of this, Tilan Sugar Limited has become the wholly owned subsidiary of the Company. 

During the year under review, Sakthi Auto Component Limited (SACL), the wholly owned subsidiary of the Company acquired the entire share capital of Orlandofin B.V., Netherlands. Intermet Netherlands B.V., Intermet European Foreign Sales Corporation B.V., Intermet Holding B.V., Intermet Europe GmbH and Co. KG, Intermet Europe Verwaltungs GmbH, Intermet Neunkirchen GmbH, Intermet Service GmbH and Portcast Fundicao Nodular S.A. are subsidiaries of the Orlandofin B.V. Intermet Neunkirchen GmbH has two foundaries in Germany for manufacture of ductile iron castings with an aggregate capacity of 1, 10,000 tonnes per annum, Portcase Fundicao Nodular S.A. has a manufacturing facility in Portugal with a capacity of 50,000 tonnes of castings per annum.

An Overview: 

The Company is engaged in the business of manufacture of White Crystal Sugar, Industrial alcohol, Generation of power and Soya products. Molasses, one of the by-products, is used in the distillery for manufacture of industrial alcohol. 

Industry Structure and Developments: 

The sugar industry has gone back to a bad shape after witnessing a phase of revival in mid 2006. This is mainly due to excess production of sugar, not only in India but globally. The ban on export as a measure to control inflation when the price of sugar in international market was at its peak had drastically affected the industry and quickened the downward path. Subsequent lifting of the ban had not helped the industry. The measures taken by the Central Government to stabilize the domestic price have not yielded the desired result and the incentives announced to boost export are yet to be implemented. 

Financial Performance with respect to Operational Performance: 

The gross income for the year under review is Rs. 8117.652 Millions. The year has ended with a profit of Rs. 1427.499 Millions (previous year Rs.1922.588 Millions) before interest and depreciation. After providing Rs.991.615 Millions for Interest and Rs. 134.087 Millions for depreciation, the net profit for the year is Rs. 301.797 Millions (previous year Rs.961.686 Millions). 

CONTINGENT LIABILITY:

a) Sales-tax demands against the company aggregating to Rs. 90.593 Millions are disputed and appeals are pending.

b) Demands against the company for payment of Excise duty aggregating to Rs.4.495 Millions are disputed and

appeals are pending.

c) A writ petition has been filed before the Hon'ble High Court of Madras in respect of Administrative Service fee

increase by the Government of Tamilnadu. Amount under dispute is Rs.96.757 Million.

d) The Company has provided Corporate Guarantees aggregating to Rs. 227.742 Million to secure the loans availed by Cane Growers' Societies at Orissa. The aggregate of the loans repayable by the above Society as on

30.6.2007 is Rs.327.235 Million including interest thereon.

e) The company had filed Writ Petitions before the Hon'ble High Court of Madras with respect to water charges

payable by the Company to the Government of Tamilnadu. The amount involved is Rs.61.181 Millions

f) A quantity of 179113 MTs. of sugar has to be exported by the Company to fulfil its obligation against import of raw sugar under Advance Licencing Scheme.

g) The company has preferred an appeal before Income Tax Appellate Tribunal, Chennai against the Order of the

Commissioner of Income Tax-l and the disputed amount of tax is Rs.6.538 Millions.

h) The levy of fringe benefit tax under the Income-tax act has been challenged by a writ petition before Hon'ble High court of Madras through The Indian Chamber of Commerce and Industry, Coimbatore. The Hon'ble High Court has admitted the writ petition and the same is pending before the said court for disposable. The amount involved is Rs. 11.765 Millions.

i) An amount of Rs. 1.367 Millions decreed against the Company is under appeal before the High Court of Andhra

Pradesh.

j) A writ petition has been filed in the Gujarat High Court against a show cause notice issued by the Deputy Collector, Stamp Valuation Cell, Mehsana, Gujarat, towards shortfall in stamp duty/registration fee. The amount

involved is Rs. 43.024 Millions.

k) The Executive Engineer, Angul Irrigation Division, Angul, Orissa State has raised a demand of Rs. 0.600 Millions towards water tax arrears against which a writ petition before the High Court of Orissa, Cuttack has been filed and pending disposal.

FIXED ASSETS

• Land
• Development of Property Eco Friendly Trees
• Buildings
• Plant and Machinery
• Molasses & Alcohol Storage Tanks
• Electrical Installation
• Office Equipment & Furniture and Fixtures
• Laboratory Apparatus
• Motor Vehicles

AS PER WEBSITE

Sakthi Sugars Limited is one of the largest producers of white crystal sugar in the country accounting for a capacity of 13,500 tonnes of cane crush per day.

Growth in terms of Crushing Performance

• Mills equipped with Auto Setting facilities.
• Best export quality of Sugar produced.
• Scientific farming
• Continuous R&D in sugar rich, pest resistant and high yielding sugarcane varities
• Mechanisation of cane harvesting.
• Efficient Sugar manufacturing method used thereby reducing the sugar loss.
• Factory sites are maintainted neat and clean - Hygiene at its best.

Sakthi Sugars has set up sugar units in different parts of India.

Sakthinagar Unit

Crushing Capacity 7500 tonnes / day

Total Sugar Produced (1998-1999)  13,82,100 quintals

Total Cane Crush (1998-1999) 14,23,252 Metric Tonnes

Sivaganga Unit

Crushing Capacity 4000 tonnes / day

Total Sugar Produced (1998-1999)  4,66,825 quintals

Total Cane Crush (1998-1999)  4,87,409 Metric Tonnes

Dhenkanal Unit

Crushing Capacity 2000 tonnes / day

Total Sugar Produced (1998-1999)  2,00,496 quintals

Total Cane Crush (1998-1999)  2,38,339 Metric tonnes

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.39.65
UK Pound	1	Rs.77.41
Euro	1	Rs.57.62

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	NO
--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