MIRA INFORM REPORT

Report Date :

12.11.2008

IDENTIFICATION DETAILS

Name :	BANNARI AMMAN SUGARS LIMITED
Registered Office :	1212, Trichy Road, Coimbatore - 641 018, Tamilnadu
Country :	India
Financials (as on) :	31.03.2008
Date of Incorporation :	01-12-1983
Com. Reg. No.:	18-1358
CIN No.: [Company Identification No.]	L15421TZ1983PLC001358
TAN No.: [Tax Deduction & Collection Account No.]	CMBB03043F
PAN No.: [Permanent Account No.]	AAACB8933G
Legal Form :	Public limited liability company. The company’s shares are listed on the stock exchange
Line of Business :	Manufacturer of Sugar, Molasses, Granite Blocks, Polished Granite Slabs, Polished Granite Tiles, Monuments, Rectified Spirit, Denatured Spirit, Denatured Spirit, Netural Spirit, Fusel Oil and Bio Compost.

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 23000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having fine track. It is faring well. Financial position is good. Payments are usually correct and as per commitments. Trade relations are fair. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a medium to long run

LOCATIONS

Registered Office :	1212, Trichy Road, Coimbatore - 641 018, Tamilnadu, India
Tel. No.:	91-422-2302277 (10 Lines)
Fax No.:	91-422-2309999 / 2305599
E-Mail :	bascbe@vsnl.com
Website :	http://www.bannari.com
Corporate Office :	252, Mettupalayam Road, Coimbatore – 641 043, Tamilnadu, India
Tel. No.:	91-422-2450045/2451515/2302277
Fax No.:	91-422-2431199/2305599
E-Mail :	bascbe@giasmd01.vsnl.net.in / bascbe@vsnl.com / shares@bannari.com
Factory :	· Sugar Unit I , Co-Generation and Granite Processing Alathukombai, Erode District, Tamilnadu · Sugar Unit II and Co-Generation Alaganchi village, Mysore District, Karnataka · Sugar Unit Kunthur village, Kollegal Taluk, Chamarajanagar District Karnataka · Distillery o I Sinnapuliyur, Erode District, Tamilnadu o II Alaganchi village, Mysore District, Karnataka · Bio-Compost o I Modur village, Erode District, Tamilnadu o II Alaganchi village, Mysore, District Karnataka · Wind Mills o Radhapuram, Irukkandurai And Karunkulam Villages o Radhapuram Taluk Tirunelveli District

DIRECTORS

Name :	Dr. S V Balasubramaniam
Designation :	Chairman and Managing Director
Name :	Mr. V Venkata Reddy
Designation :	Vice Chairman
Name :	Mr. B Saravanan
Designation :	Joint Managing Director
Age :	32 years
Qualification :	Commerce Graduate
Experience :	5^th July 2000
Name :	Mr. V Venkata Reddy
Designation :	Vice Chairman
Name :	Mr. S G Subrahmanyan
Designation :	Director
Name :	Mr. S V Alagappan
Designation :	Director
Name :	Mr. S V Arumugam
Designation :	Director
Name :	Mr. L Sivanappan
Designation :	Director
Name :	Mr. E P Muthukumar
Designation :	Director
Name :	Mr. A K Perumalsamy
Designation :	Director
Name :	Mr. T Gundan
Designation :	Director
Name :	Mr. B Saravanan
Designation :	Joint Managing Director

KEY EXECUTIVES

Name :	Mr. N Solairajan
Designation :	Executive President
Name :	Mr. P Dharmalingam
Designation :	Executive President (Unit I)
Name :	Mr. R Murugesan
Designation :	Vice President
Name :	Mr. V L Rajagopal
Designation :	Vice President (Unit I)
Name :	Mr. A Ramaswamy
Designation :	Vice President (Distillery Division)
Name :	Mr. K Sundaramoorthi
Designation :	Vice President (Distillery Unit)
Name :	Mr. R Ramgopal
Designation :	Assistant Vice President (Unit II)
Name :	Mr. C Palaniswamy
Designation :	Company Secretary

SHAREHOLDING PATTERN

(As on 30.09.2008)

Names of Shareholders	No. of Shares	Percentage of Holding
Shareholding of Promoter and Promoter Group
Indian
Individuals/ Hindu Undivided Family	1837115	16.06
Bodies Corporate	4422741	38.66
Public shareholding
Institutions
Mutual Funds/ UTI	21092	0.18
Financial Institutions / Banks	250	0.00
Foreign Institutional Investors	21149	0.18
Non-institutions
Bodies Corporate	942821	8.24
Individuals
Individuals -i. Individual shareholders holding nominal share capital up to Rs 0.100 Millions	1224455	10.070
ii. Individual shareholders holding nominal share capital in excess of Rs. 0.100 Millions	2166432	18.94
Any Other Specify
Independent Directors and their relatives	106731	0.93
Non Resident Indian	280722	2.45
Overseas Corporate Bodies	178690	1.56
Clearing Member	1288	0.01
Hindu Undivided Families	236214	2.06
Total	11439700	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Sugar, Molasses, Granite Blocks, Polished Granite Slabs, Polished Granite Tiles, Monuments, Rectified Spirit, Denatured Spirit, Denatured Spirit, Netural Spirit, Fusel Oil and Bio Compost.
Products :	Item Code No. Product Description 17019902 White Crystal Sugar 2207200 Alcohol 68022301 Granite Block and Slabs

PRODUCTION STATUS

(As on 31.03.2008)

Particulars	Unit	Licensed Capacity	Installed Capacity
Tamilnadu – Sugar – I	Tones of cane crush per day	Not Applicable	4000
Karnataka– Sugar – II	Tones of cane crush per day	Not Applicable	7500
Karnataka– Sugar – III	Tones of cane crush per day	Not Applicable	2500
Granite Slabs	Sq. Mtr Per annum	50000	50000
Granite Tiles	Sq. Mtr Per annum	95000	10000
Monuments	Sq. Mtr Per annum	2500	2500
Tamilnadu Unit – Alcohol	Millions Ltrs. Per annum	24	16.33
Karnataka Unit - Alcohol	Kilo Ltrs. Per day	60	60
Tamilnadu - Power	MWH	Not Applicable	20
Karnataka- Power	MWH and 20 MWH	Not Applicable	16
Wind Mills	KWH	Not Applicable	8750
Bio-Diesel	Ltrs per day	3000	3000

Particulars	Unit	Actual Production
Sugar	Quintals	3418390
Molasses	Tones	167550
Bagasse	Tones	777732
Granite Blocks	Cubic Meters	7316
Polished Granite Slabs	Square Meters	128481
Polished Granite Tiles	Square Meters	7669
Polished Monuments	Square Meters	77
Alcohol	B. Ltrs.	21532029
Fusel Oil	B. Ltrs.	17663
Bio Compost	Tones	18040
Power	Lakh Unites	3802.06

GENERAL INFORMATION

No. of Employees :

2200

Bankers :

· Punjab National Bank

· Bank of Baroda

· Canara Bank

· The Federal Bank Limited

· The Karur Vysya Bank Limited

· Union Bank of India

· Indian Overseas Bank

· State Bank of Travancore

· State Bank of India

· The Lakshmi Vilas Bank Limited

· State Bank of Hyderabad

· Bank of India

Facilities :

SECURED LOANS	(AS ON 31.03.2008) Rs. in millions
FROM BANKS
Cash Credit Loans	761.121
Loan under SEFASU notified by the Central Government	476.250
Term Loans	406.163
FROM OTHERS Sugar Development Fund	498.989
Total	2142.523

Banking Relations :	Good
Auditors :
Name :	· P N Raghavendra Rao and Company Chartered Accountants · Internal Auditors Srivatsan and Gita Chartered Accountants · Cost Auditor M Nagarajan Cost Accountant
Associates/Subsidiaries :	· Annamallai Retreading Company (Private) Limited · A A Retreading Company · Anamallais Agencies · Bannari Amman Spinning Mills Limited · Shiva Distilleries Limited · Shiva Texyarn Limited · Vedanayagam Hospital (Private) Limited

CAPITAL STRUCTURE

(As on 31.03.2008)

Authorised Capital :

No. of Shares	Type	Value	Amount
29000000	Equity Shares	Rs.10/- Each	Rs.290.000 Millions
2100000	Redeemable Preference Shares	Rs.100/- Each	Rs.210.000 millions
	Total		Rs.500.000 millions

Issued, Subscribed & Paid-up Capital :

11439700	Equity Shares	Rs.10/- Each	Rs.114.397 millions
1846000	9% Redeemable non-cumulative Preference Shares	Rs.100/- Each	Rs.184.600 millions
	Total		Rs.298.997 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2008	31.03.2007	31.03.2006
SHAREHOLDERS FUNDS
1] Share Capital		298.997	299.000	95.397
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		4382.526	4057.300	2715.861
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		4681.523	4356.300	2811.258
LOAN FUNDS
1] Secured Loans		2142.523	1106.400	1624.906
2] Unsecured Loans		1477.807	560.800	466.252
TOTAL BORROWING		3620.330	1667.200	2091.158
DEFERRED TAX LIABILITIES		548.067	0.000	518.922
TOTAL		8849.920	6023.500	5421.338
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		3734.490	3821.100	3133.198
Capital work-in-progress		632.345	71.900	143.177
INVESTMENT		175.075	34.300	34.311
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3104.645	2350.000	1991.112
	Sundry Debtors	834.726	716.000	651.515
	Cash & Bank Balances	935.932	485.100	158.832
	Other Current Assets	223.649	0.000	23.119
	Loans & Advances	967.654	775.100	443.179
Total Current Assets		6066.606	4326.200	3267.757
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities		1800.000	1157.105
	Provisions	1758.596	430.000	--
Total Current Liabilities			2230.000	1157.105
Net Current Assets		4308.010	2096.200	2110.652
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		8849.920	6023.500	5421.338

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2008	31.03.2007	31.03.2006
Sales Turnover		6603.523	7956.371	6140.142
Other Income		218.259	53.769	28.381
Total Income		6821.782	8010.140	6168.523
Profit/(Loss) Before Tax		391.606	1083.536	957.166
Provision for Taxation		(31.820)	180.654	187.417
Profit/(Loss) After Tax		423.426	902.882	769.749
Earnings in Foreign Currency :		1054.511	1052.183	250.967
Imports :
	Stores & Spares	48.842	45.653	30.331
	Capital Goods	119.641	NA	18.232
Total Imports			NA	48.563
Expenditures :
	Raw Materials Purchased	3837.583	3907.160	2396.008
	Manufacturing and Other Expenses	2840.272	2656.044	2131.684
	Traded Goods Purchased	2.145	135.020	0.000
	Increase/(Decrease) in Finished Goods	(742.353)	(246.041)	0.000
	Excise Duty	71.275	24.196	143.405
	Interest and Financial Charges	73.068	76.742	109.560
	Depreciation	348.186	373.483	430.700
Total Expenditure		6430.176	6926.604	5211.357

QUARTERLY RESULTS

PARTICULARS	30.06.2008	30.09.2008
Type	1st Quarter	2nd Quarter
Sales Turnover	1768.800	2065.300
Other Income	5.600	14.600
Total Income	1774.400	2079.900
Total Expenditure	1470.600	1578.200
Operating Profit	303.800	501.700
Interest	25.600	28.700
Gross Profit	278.200	473.000
Depreciation	78.300	81.800
Tax	3.300	84.200
Reported PAT	206.800	300.700

KEY RATIOS

PARTICULARS	31.03.2008	31.03.2007	31.03.2006
Debt-Equity Ratio	0.59	0.52	1.06
Long Term Debt-Equity Ratio	0.39	0.49	0.73
Current Ratio	1.64	1.81	1.37
TURNOVER RATIOS
Fixed Assets	1.09	1.46	1.31
Inventory	2.49	3.76	3
Debtors	8.76	11.95	10.9
Interest Cover Ratio	5.71	13.72	9.16
Operating Profit Margin(%)	12.11	18.88	23.26
Profit Before Interest And Tax Margin(%)	6.99	14.31	16.61
Cash Profit Margin(%)	11.36	15.62	18.55
Adjusted Net Profit Margin(%)	6.23	11.05	11.9
Return On Capital Employed(%)	6.63	21.4	21.28
Return On Net Worth(%)	9.41	25.77	31.33

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Subject was incorporated in December 1983. The company was promoted by S V Balasubramanian and K S Thirumalaiswamy to manufacture sugar in Southern India. Now, it has scattered its activities in Distillery, Granites, Co-generation of Power, Wind Mills operations.

Subject came out with a public issue in Sep' 1985, to set up a sugar plant in Alathukombai in Tamil Nadu. This plant was commissioned with initial capacity of 1250 tonnes of cane crush per day. It manufactures sugar using the conventional double sulphitation process. The company's success in its first venture, led the company to make a next step towards its way. In 1992 the company had set up a sugar mill with a daily cane crushing capacity of 2500 TCD in Alaganchi village, Mysore district in the state of Karnataka. This project was financed by rights issue of zero interest fully convertible debentures of Rs. 196.875 Millions, secured redeemable non-convertible debentures for Rs. 140 Millions issued to Citibank N.A. and term loan of Rs. 80 Millions received from ICICI Limited Total capacity of sugar mills in Tamil Nadu and Karnataka increased to 4000 TCD and 5000 TCD over the period. 

The company diversified its activity in several segments. As a first step, it started to manufacture Citric Acid in 1987 with annual capacity of 5,400 tonnes. Subsequently it diversified into the lucrative field of granite exports by setting up a 100% EOU in Nov' 1990, at Alathukombai to produce 50,000 sq mtr of polished granite slabs and 60,000 sq mtr of granite tiles per annum. It has acquired and taken on lease several quarries in Tamil Nadu, Karnataka, Andhra Pradesh and Rajasthan.  

In 1995, M/s Coimbatore Alcohol and Chemicals Limited (CACL) amalgamated with subject. The company allotted 20,00,000 equity shares of Rs. 10/- each at a premium of Rs. 80/- per share to the shareholders of CACL as per the scheme of amalgamation. 

The company made its next diversification for Co-generation of power in the year 2000. It has set up a co-generation power plant with an installed capacity of 16 MW in the sugar factory in Karnataka. The company has also set up a 20 MW co-generation plant at Alathukombai in Aug' 2002 and an additional 20 MW co-generation plant at Alaganchi in Mar' 2004. Total capacity of co-generation power plant stands at 56 MW.  

During 2004-05, the company has diversified into windmill operation and commissioned 7 wind turbine generator at Radhapuram in the state of Tamil Nadu. The windmill has started its operation. 

During 2005-06, the company proposes to increase the installed capacity of the sugar unit in Karnataka from 5000 TCD to 7500 TCD.

REVIEW OF OPERATIONS

During the year in sugar unit-I 9.19 lakh tonnes of sugarcane was crushed as against the estimated cane crush of 9 lakh tonnes. In sugar unit-II 18.07 lakh tonnes of sugarcane was crushed as against estimated cane crush of 20 lakh tonnes of sugarcane. In sugar unit-III 5.84 lakh tonnes of sugarcane was crushed as against estimated cane crush of 6 lakh tonnes of sugarcane

Co-generation of Power

The co-generation plant in sugar unit I had generated 153.45 million units of power and exported 110.48 million units to the Tamilnadu Government Grid. In sugar unit II the 16 MW and 20 MW co-generation plants had generated 103.82 million units and 107.05 million units of power and exported 88.39 million units and 52.04 million units respectively to Karnataka Government Grid

Distillery Division

The distillery in Tamilnadu had worked for 337 days and produced 18.22 lakh B.Ltrs of Rectified Spirit 156.93 lakh B.Ltrs of Neutral Spirit and 0.06 lakh B.Ltrs of Fusel oil The distillery in Karnataka had worked for 115 days and produced 1.93 lakh B.Ltrs of Rectified Spirit 35.57 lakh B.Ltrs of Neutral Spirit and 2.74 lakh B.Ltrs of Medium Grade Alcohol

Granite Division

In the Granite Division in Tamilnadu 128481 square metres of Granite slabs 7669 square metres of tiles and 77 square metres of monuments were produced compared to production of 112030 square metres of Granite Slabs 12742 square metres of tiles and 1127 square metres of monuments in the last year

Wind Mills

Wind mills had generated 15.84 million units of power and exported 13.67 million units to Tamilnadu Government Grid

CONTINGENT LIABILITIES

· The company has preferred a Writ Appeal before the Division Bench of the Hon’ble High Court, Madras challenging the order pronounced in Writ Petition No. 4030/2002 dated 28.02.2006 in connection with increase in rate of water charges and the method of computation of water charges pursuant to the G.O. No. 474 dated 13.11.2001 for the water drawn for industrial purposes. The approximate amount under dispute is Rs.32.837 millions.

· Sugar Unit-I at Sathyamangalam was permitted to sell 100% of the sugar production as Free Sugar for a period of 8 years from 1985-86 Sugar Season. Chief Director (Sugar), Directorate of Sugar, Department of Food New Delhi has restricted the entitlement of Free sale Sugar Incentive to 275000 quintals production per season by a subsequent notification. A Writ Petition has been filed in the Madras High Court challenging the restriction imposed and interim injunction has been obtained. By virtue of injunction order the entire production was sold as Free Sugar. The approximate unprovided quantum under dispute is Rs.68.335 millions

· Sugar Unit-I at Sathyamangalam was allowed to sell 100% of the Sugar production as free sugar for 8 years from 1985-86 sugar season and pay excise duty on incentive sugar as applicable to levy sugar and to retain the difference in excise duty between levy and free sale sugar. In respect of incentive sugar sold by Unit – I from 20.09.1991 to 31.01.1994 the Central Excise Department has issued show cause notices to the Company to show cause why the difference of Rs.33/- per quintal being the difference between duty on levy sugar and free sugar should not be demanded from the Company. The Company has filed Writ Petitions in Madras High Court and obtained an interim injunction against the show cause notices. The excise duty in dispute is Rs.14.999 millions.

· The Entry Tax of Rs.21.713 millions on Inter-state purchased of rough blocks is disputed.

· The Company has received a demand for payment of excise duty for Rs.14.843 millions on the machineries purchased for co-generation plant which have been cleared by the manufacturers based on the certificated alleged to have been forged by an Official in the Ministry of Finance. The Company has remitted the amount under protest. The company opted for obtaining a valid certificate for which steps have been taken through a Writ petition filed before Hon’ble High Court of Madras.

· The Company has been asked to pay Electricity Tax of 10 Paise per unit with effect from 16^th June 2003 for the electricity consumed from own captive power generators which has been disputed by filing a Writ petition vefore the Hon’ble High Court of Madras. The approximate quantum under dispute is Rs.12.463 millions.

· Erstwhile Maheswara Sugars Limited has appalled against a Provident Fund demand of Rs.5.249 millions. The dispute is pending in the Provident Fund Tribunal, Delhi.

· Punjab National Bank has extended bank guarantee for Rs.10.000 millions on behalf of the company to the Chief Director (Sugar) Directorate of Sugar Ministry of Consumer Affairs Food and Public Distribution Government of India towards completion of setting up of sugar factory at Heggadadevanakote Taluk Karnataka State within the stipulated time as per the Sugarcane (Control) Order, 1966.

· Canara Bank has extended bank guarantee for Rs.10.000 millions on behalf of the company to the Chief Director (Sugar), Directorate of Sugar Ministry of Consumer Affairs, Food and Public Distribution Government of India towards completion of setting up of Sugar factory at Thandarampattu Taluk Tamilnadu State within the stipulated time as per the Sugarcane (Control) Order 1966

· The Company has preferred an appeal before the Income Tax Appellate Tribunal, Chennai challenging the order of Commissioner of Income Tax (Appeals) in connection with disallowance of deduction under section 80IA of the Income Tax Act 1961 for the Assessment year 2004-05. The quantum under dispute is Rs.75.230 millions.

· The Company has preferred an appeal before the Commissioner of Income Tax (Appeals) challenging the order of Assistant Commissioner of Income Tax in connection with disallowance of deduction under section 80IA of the Income Tax Act 1961 for the Assessment year 2005-06. the quantum under dispute is Rs.69.637 millions.

· The Company has an obligation under EPCG Scheme to export sugar of a value of US$ 4266717 over a period of 8 years reckoned from the financial year 2008-09

· The Company has disputed the demand of excise duty on Tenax paste used in the manufacture of polished granite slabs. The appeal is pending before the Central Excise and Service Tax Appellate Tribunal, Chennai. The quantum of dispute is Rs.1.659 millions.

SECURED LOANS

Name of the Banks/Financial Instituition	Particulars of Loan	Security
Punjab National Bank consortium consists of Punjab National Bank Bank of Baroda Canara Bank The Federal Bank Limited The Karur Vysya Bank Limited Union Bank of India Indian Overseas Bank State Bank of Travancore and State Bank of India	Cash Credit and other Working Capital limits / Demand Loan aggregating to Rs.2358.907 millions sanctioned to the Company’s Sugar Unit I and Sugar Unit II	Hypothecation of current assets of the Company’s two sugar units viz. stocks of raw materials stocks in process semi-finished and finished goods including Sugar, Raw Sugar processed out of Raw Sugar Molasses Gunny bags and stores and spares not relating to Plant and Machinery (consumable stores and spares) Bills Receivables and book debts and all other movable block assets both present and future wherever situate. These loans are further secured by way of third mortgage on the immovable properties of the Company’s two sugar units situate at Alathukombai Village Sathyamangalam Taluk Erode District in the State of Tamilnadu and Alaganchi and Mallupura Villages Nanjangud Taluk Mysore District in the State of Karnataka.
Punjab National Bank and State Bank of India	Packing Credit Limit and other working capital limits aggregating to Rs.89.000 millions sanctioned to the Company’s Granite Processing Division	Hypothecation of current assets of Granite Processing Division of the Company viz. Raw Materials Stock in process, Finished Granite Products consumable stores and spares, bills receivables and book debts both present and future. A second mortgage and charge on the immovable and movable properties of the Company’s Granite Processing Unit (both present and future) situate at Alathukombai Village Sathyamangalam Taluk Erode District in the State of Tamilnadu.
Canara Bank and The Lakshmi Vilas Bank Limited	Cash Credit Loans aggregating to Rs.18.000 millions sanctioned to the Company’s Distillery Division at Tamilnadu	Hypothecation of current assets of Company’s Distillery unit in Tamilnadu viz. raw materials molasses furnace oil stock in process finished goods consumable stores and spares bills receivables and book dents both present and future. A second mortgage and charge on the immovable and movable properties of Distillery Unit situate at Sinnapuliyur and Periapuliyur villages Bhavani Taluk Erode District in the State of Tamilnadu.
State Bank of Hyderabad consortium consists of State Bank of Hyderabad The Federal Bank Limited and Bank of India	Cash Credit Loans aggregating to Rs.360.000 millions sanctioned to the company’s Sugar Unit - III	First charge by hypothecation of the whole of the current assets of the company’s sugar unit at Kunthur Village Kollegal taluk Chamarajanagar District in the State of Karnataka viz. Stocks of raw materials stocks in process semi-finished and finished goods including sugar Molasses Gunny bags and stores and spares not relating to plant and machinery (consumable stores and spares) bills receivables and book debts and all other movables both present and future in the possession on pari-passu basis. This loan has been personally guaranteed by the Managing Director.
Government of India	Sugar Development Fund loan of Rs.180.000 millions	Second Mortgage on lands measuring 234.28 ½ acres and buildings and structures thereon of Sugar Unit – II situate at Alaganchi and Mallupura Villages Nanjangud Taluk Mysore District in the State of Karnataka and second charge by way of hypothecation of all the movable properties of the company’s sugar unit – II.
ICICI Bank Limited	Term Loan of Rs.200.000 millions	Hypothecation of all movables (save and except book debts) including movable machinery spares tools and accessories present and future of sugar unit – I at Alathukombai village, Sathyamangalam Taluk Erode District in the State of Tamilnadu subject to prior charges created / to be created in favour of company’s bankers on the current assets for securing the working capital requirements. Mortgage on lands measuring 155.71 ½ acres and buildings thereon pertaining to the company’s sugar unit – I situate at Alathukombai Village Sathyamangalam Taluk Erode District in the State of Tamilnadu and buildings thereon.
Government of India	Sugar Development Fund Loan of Rs.155.078 millions	Second Mortgage on lands admeasuring 155.71 ½ acres and buildings and structures thereon of Sugar Unit – I situate at Alathukombai Village Sathyamangalam Taluk Erode District in the State of Tamilnadu and exclusive second charge by way of hypothecation of all the movable properties of the company’s sugar unit – I.
Government of India	Sugar Development Fund Loan of Rs.159.000 millions	Second charge on the whole of the moveable properties of the company pertaining to its Sugar and Co-generation Units situate at Alaganchi village Nanjangud Taluk in the State of Karnataka including the company’s moveable plant and machinery spares tools and accessories and other moveables both present and future (save and except book debts.) Second Mortgage on lands admeasuring 234.28 ½ acres and buildings thereon pertaining to the company’s sugar unit – II situate at Alaganchi and Mallupura Villages Nanjangud Taluk Mysore District in the State of Karnataka
Punjab National Bank	Term Loan of Rs.150.000 millions. Letter of Guarantee obtained in favour of Government of India for Sugar Development Fund Loan of Rs.124.000 millions.	Hypothecation of Plant and Machinery spares tools and other movable assets forming part of the block assets, both present and future of the Company’s distillery Unit at Alaganchi Village nanjangud Taluk Mysore District Karnataka. Mortgage on lands admeasuring 47.16 acres pertaining to the company’s distillery unit situate at Alaganchi village, Nanjangud Taluk Mysore District in the State of Karnataka and all plant and machinery attached thereto.
State Bank of India	Term Loan of Rs.224.000 millions with an option to convert it as FCNR (B) Term Loan with swing option at a later date.	Hypothecation of Suzlon make 7 Wind Electric Generators of 1.25 MW each installed at Irukkandurai Karunkulam and Radhapuram villages Radhapuram Taluk Tirunelveli District in the State of Tamilna0fdu.

FIXED ASSETS

· Land-Free hold

· Land-Lease hold

· Buildings

· Plant and Machinery

· Furniture, Fixtures, Office and Canteen Equipments

· Live Stock

· Motor Vehicles

WEB DETAILS

Sugar Division

WHITE CRYSTAL PLANTATION CANE SUGAR production in the three units of subject, are now almost Eleven Times at 14,000 tonnes of cane crush / day from the initial capacity of 1250 TCD of its first Sugar Unit. The Total Cane Crush in the three units was 33.10 lakh tonnes in the year 2007-08.

Sugar Unit-1: The first Sugar unit near Sathyamangalam of Erode District, Tamil Nadu State, started its commercial production in the year 1986 with an initial capacity of 1250 tonnes of Cane crush per day and expanded to 2500 tonnes in 1998. The crushing capacity is now expanded to 4000 TCD. The unit has many credits and firsts in the sugar industry of the country.

An EN/ISO 9002 unit accredited by RWTUV of Germany in 1997 for its good system of quality management ensuring a better product. This has been upgraded to ISO 9001:2000 valid upto 20.7.2010. The unit's sugar is also marketed in consumer packs of 1 kg in select cities of Tamil Nadu.

The Sugar Unit -I has an imported facility to produce 300MT of Refined Sugar per Day and the same is mainly marketed to Pharmaceutical and Food Industries. For manufacture and supply of refined sugar TUV of GERMANY in 2007 accredited HACCP certificate for its management system as per Codex Aliemtarius commission (Recommended international codex of practice - General principles of Food Hygiene CAC/ RCP 1- 1969, rev.4 (2003)). Bannari's ONE-UP Refined Sugar in 1 Kg. consumer packs is available in the market.

Subject produces Bio Products for Soil fertility, high yield and toxic free farming. High quality Fertilisers and Pesticides for healthy crop and for better pest management are offered at low prices...

Sugar Unit-II: The Second unit of subject, near Nanjangud in Mysore District of Karnataka State, started the commercial production in the year 1992 with an initial cane crushing capacity of 2500 tonnes per day and expansion to a capacity of 5000 tonnes in Year 2000. Another expansion to 7500 Tonnes Cane crush per Day was completed in July 2006.

A Sugar Refinery Plant with a capacity of 500 MT per day is being installed.

The Distillery at the Sugar Unit-2, to produce 60,000 litres of Industrial Alcohol per day, has commenced its production from March 2005. An incineration plant to burn spent wash with 2 MW power generations is under implementation in the Distillery.

Sugar Unit-III: The Company has acquired a sugar mill having a cane crushing capacity of 2500 TCD in Kunthur Village near Kollegal in Karnataka by way of amalgamation of M/s. Maheswara Sugars Limited, with the company.

The Karnataka Government has approved the proposal to change the location of this sugar plant and to establish a Sugar Plant with 6000 Tonnes Cane per Day from the existing capacity of 2500 TCD besides setting up of a 28.8 MW Co-generation Plant.

Sugar Unit-IV: The Tamilandu Government has demarcated necessary cane areas for establishment of an integrated Sugar Complex comprising of 5000 TCD Sugar Plant, Co-generation Plant, Distillery Ethanol Plant and a Bio Composting Unit at Kolundampattu Village, Thandarampattu Taluk, Tiruvannamalai District. Effective steps are being taken for implementation of the project.

Granite Division

A 100% Export Oriented Unit, established in the year 1991 for manufacture of Polished Granite Slabs, Tiles and Monuments. One of the most modern and well planned granite plants in India, having a reputed clientele base all over the world including USA, Germany, Belgium, Italy, Australia, Middle East and the Far East. Granite Division Has own captive granite quarries in some of the well-known Indian materials, which ensure timely delivery of the finished goods. Also exports rough Granite Blocks.

Distillery Division

The Distillery Division produces over 60,000 litres of Industrial Alcohol per day. The distillery has set up a bio-gas plant with the help of technical know-how from France, to provide an alternate source of energy. This reflects the company's growing concern for the environment and the need to find suitable alternatives.

Distillery being a down stream industry of Sugar, subject, produces over 60,000 litres of industrial alcohol and extra neutral spirit per day from sugarcane molasses. The technical know-how from France meets the strict pollution control measures to protect environment and also need to find sustainable alternative source of energy with a bio-methanisation plant.

Bio-Compost Fertilizer Unit

Let us add value to the soil. Bio-compost plays a key role in maintaining soil fertility. It possesses many desirable properties and exerts beneficial efforts on the physical, chemical and biological characteristics of the soil. In addition, it improves the efficient usage of chemical fertilizers. Bio-compost being used in Kenya, Philippines and America has consistently increased crop yield, while reducing the usage of chemical fertilizers.

BIO COMPOST is prepared in Sugar Unit –I and II of subject, by mixing the nutrient rich Pressmud from sugar mills with Nitrogen, Phosphorous and Potassium rich Spent wash obtained from Distilleries. In this process, decomposing beneficial bacteria and aero booster are engaged for proper and better decomposition of the above mixture.

Co-Generation

The The Two Co-generation Plants at the Sugar Unit II with Turbo Alternators of capacities 16 and 20 MW export the surplus power to the Karnataka State Electricity Board's Grid.

The Co-Generation Plant for generating 20 MW power at the Sugar Unit-1 exports the Surplus power to the Tamilnadu State Electricity Board.

The three Co-generation Plants have generated 364.32 million units of power in the year 2007-08.

Wind Mill

The Alternate non-conventional renewable source of energy is the ultimate answer for the future.

Seven nos. of 1250 KW WTG from Suzlon have been installed in Karunkulam, Radhapuram, Irukkandurai villages in Tirunelvelii Districts of Tamilnadu.

The power generated from the wind energy generators is fed to the Tamilnadu State Electricity Board's Grid and adjusted in the power consumption of various industries, established by the group. These Wind Turbines have generated 15.84 million units in the year 2007-08.

BIO-DIESEL

The Company's Bio Diesel Plant at Sathyamangalam, Tamilnadu, has commenced production of 3000 litres of Bio Diesel per Day, from multi feed stock viz Jatropha, Pungan seeds etc.

For promotion and popularization of Jatropha as a Bio Fuel Crop for afforestation of Non Forest Wastelands, the Company is providing training and all technical assistances to the farmers of Coimbatore, Erode, Karur and Dindigul districts of Tamilnadu, and has plans to plant Jatropha in more than 10,000 Acres by 2009-10.

The Company has also arranged financial assistance to the farmers under tie-up arrangements with banks.

Farmers having uncultivable/degraded land, wasteland with minimum water source, having large extent of lands in drought prone area, willing to take up long term plantation in wastelands with minimum risk, are now having opportunity to harvest money.

Aforestation of the existing wastelands in the rural India by using Jetropha Curcus may increase the rural employment opportunities and the income for the well being of the rural India as a whole and contribute to the energy security of the country.

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.47.59
UK Pound	1	Rs.74.55
Euro	1	Rs.60.57

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	8
--PROFITABILIRY	1~10	8
--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	NO
--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/normal.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions