MIRA INFORM REPORT

Report Date :

25.01.2011

IDENTIFICATION DETAILS

Name :	GOLDEN TOBACCO LIMITED
Registered Office :	Tobacco House, S V Road, Vile Parle (West), Mumbai-400 056, Maharashtra
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	28.06.1955
Com. Reg. No.:	009584
CIN No.: [Company Identification No.]	L16000MH1955PLC009584
Legal Form :	A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.
Line of Business :	Manufacturer and Marketer of Cigarettes and Processed Tobacco

RATING & COMMENTS

MIRA’s Rating :

Ba (46)

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

Maximum Credit Limit :	USD 2192800
Status :	Satisfactory
Payment Behaviour :	Usually correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. There appears some losses incurred by the company in the current year. However trade relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered normal for business dealing at usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

Risk Category	ECGC Classification
Insignificant	A1
Low	A2
Moderate	B1
High	B2
Very High	C1
Restricted	C2
Off-credit	D

LOCATIONS

Registered Office/ Head office :	Tobacco House, S V Road, Vile Parle (West), Mumbai-400 056, Maharashtra, India
Tel. No.:	91-22-26713951
Fax No.:	91-22-26715481
E-Mail :	share@goldentobacco.in
Website :	www.goldentobacco.in
Branches :	Located At: · Mumbai · Bhopal · Goa · Delhi · Chandigarh · Haldwani · Lucknow · Patna · Kolkata · Cochin · Hyderabad · Guntur · Chennai

DIRECTORS

As on 31.03.2009

Name :	Mr. Sanjay Dalmia
Designation :	Chairman
Name :	Mr. Anurag Dalmia
Designation :	Vice-Chairman
Name :	Mr. J. P. Khetan
Designation :	Managing Director
Name :	Mr. R. R. Kumar
Designation :	Director
Name :	Mr. Bharat B. Merchant
Designation :	Director
Name :	Mr. D. K. Jain - IFCI Nominee
Designation :	Director
Name :	Mr. V. K. Bhandari
Designation :	Director
Name :	Mr. Viney Mehra - Whole Time Director
Designation :	Director
Name :	Mr. A. K. Joshi - Whole Time Director
Designation :	Director
Name :	Mr. Rishabh Jain
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Sunil Kr. Dhandhania
Designation :	Compliance Officer

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.12.2010

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Bodies Corporate	4679022	26.57
Sub Total	4679022	26.57
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	4679022	26.57
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	9922	0.06
Financial Institutions / Banks	116270	0.66
Insurance Companies	3050	0.02
Foreign Institutional Investors	495877	2.82
Sub Total	625119	3.55
(2) Non-Institutions
Bodies Corporate	5745739	32.63
Individuals
Individual shareholders holding nominal share capital up to Rs. 1 lakh	5306650	30.14
Individual shareholders holding nominal share capital in excess of Rs. 1 lakh	1041364	5.91
Any Others (Specify)	210908	1.20
Clearing Members	136251	0.77
Directors & their Relatives & Friends	2130	0.01
Non Resident Indians	71452	0.41
Overseas Corporate Bodies	100	-
Trusts	975	0.01
Sub Total	12304661	69.88
Total Public shareholding (B)	12929780	73.43
Total (A)+(B)	17608802	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	17608802	-

BUSINESS DETAILS

Line of Business :

Manufacturer and Marketer of Cigarettes and Processed Tobacco

PRODUCTION STATUS (As on 31.03.2009)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Cigarettes	Million	14500	18012	1950
Raw Tobacco	MT	-	-	-
Sigaret Pill	Box	-	-	-
Processed Tobacco	MT	NA	NA	607

GENERAL INFORMATION

Bankers :

• Canara Bank
• Syndicate Bank
• Vijaya Bank
• State Bank of Bikaner and Jaipur
• Allahabad Bank

Facilities :

Secured Loans :	As on 31.03.2009 Rs. in Millions
12% Secured Redeemable Non-Convertible Debentures of Rs.100 each (Privately placed with IFCI Limited)	40.000
Funded interest term loan	17.215
Loan From Scheduled Banks: Working Capita Facilities	432.215
Working Capital Term Loans	25.855
Funded Interest Term Loans	29.525
From Bodies Corporate	492.549
Total	1037.359

Unsecured Loans :	As on 31.03.2009 Rs. in Millions
Short Term Loans From Bodies Corporate	39.000
Total	39.000

Banking Relations :	-
Auditors :
Name :	Lodha and Company, Mumbai Chartered Accountants
Subsidiaries :	Western Express Industries Limited Golden Investment (Sikkim) Private Limited Golden Realty & Infrastructure Limited GTC Inc B.V.
Fellow Subsidiaries:	Raigadh Papers Limited
Associates/ Joint Ventures:	GHCL Limited Ashoka Developers and Builders Limited

CAPITAL STRUCTURE

As on 31.03.2009

Authorised Capital :

No. of Shares	Type	Value	Amount
25000000	Equity Share	Rs.10/- Each	Rs.250.000 Millions
1000000	Preference Shares	Rs.100/- Each	Rs.100.000 Millions
	Total		Rs.350.000 Millions

Issued, Capital :

No. of Shares	Type	Value	Amount
17608802	Equity Share	Rs.10/- each	Rs.176.088 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
17597858	Equity Share	Rs.10/- each	Rs.175.978 Millions
	Add : 98 Bonus Shares allotted during the year		Rs.0.001 Millions
	Less : Allotment/ Call money unpaid other than Directors		Rs.0.100 Million
	Total		Rs.175.879 Millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		175.900	175.879	175.879
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		372.300	1104.200	1113.521
4] (Accumulated Losses)		0.000	(188.281)	(190.785)
NETWORTH		548.200	1091.798	1098.615
LOAN FUNDS
1] Secured Loans		930.600	1037.359	736.954
2] Unsecured Loans		46.500	39.000	25.000
TOTAL BORROWING		977.100	1076.359	761.954
DEFERRED TAX LIABILITIES		0.000	0.000	0.000
TOTAL		1525.300	2168.157	1860.569
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		259.400	657.559	688.951
Capital work-in-progress		0.000	0.000	0.000
INVESTMENT		86.400	86.447	87.503
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1003.600	956.881	580.772
	Sundry Debtors	104.300	135.125	263.216
	Cash & Bank Balances	10.100	37.677	130.495
	Other Current Assets	14.100	0.000	0.000
	Loans & Advances	1451.600	1051.548	1050.477
Total Current Assets		2583.700	2181.231	2024.960
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors		79.012	62.561
	Other Current Liabilities	1370.700	642.927	844.984
	Provisions	33.500	35.141	33.300
Total Current Liabilities		1404.200	757.080	940.845
Net Current Assets		1179.500	1424.151	1084.115
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		1525.300	2168.157	1860.568

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	906.100	844.851	1624.583
		Other Income	215.200	471.567	28.818
		TOTAL (A)	1121.300	1316.418	1653.401
Less	EXPENSES
		Manufacturing, Trading and Other Expense	1088.700	1157.488	1492.341
		Variation in Stock	15.400	1.777	(53.594)
		TOTAL (B)	1104.100	1159.265	1438.747
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		17.200	157.153	214.654
Less	FINANCIAL EXPENSES (D)		134.800	124.915	12.378
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		(117.600)	32.238	202.276
Less/ Add	DEPRECIATION/ AMORTISATION (F)		20.300	25.475	28.722
	PROFIT BEFORE TAX (E-F) (G)		(137.900)	6.763	173.554
Less	TAX (I)		(24.500)	4.260	43.304
	PROFIT AFTER TAX (G-I) (J)		(113.400)	2.503	130.250
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		NA	(190.785)	(321.035)
	BALANCE CARRIED TO THE B/S		NA	190.785	321.035
	IMPORTS
		Raw Materials	NA	80.668	43.970
		Stores & Spares	NA	0.034	4.110
		Capital Goods	NA	3.770	20.328
		Others	NA	8.373	19.321
	TOTAL IMPORTS		NA	92.845	87.729
	Earnings Per Share (Rs.)		(6.44)	0.14	7.41

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2010	30.09.2010
Type	1^st Quarter	2^nd Quarter
Sales Turnover	233.840	182.930
Total Expenditure	224.740	207.770
PBIDT (Excl OI)	9.100	(24.840)
Other Income	26.800	0.000
Operating Profit	35.900	(24.840)
Interest	32.700	39.080
Exceptional Items	(249.660)	(19.950)
PBDT	(246.46)	(83.870)
Depreciation	3.750	3.800
Profit Before Tax	(250.210)	(87.670)
Tax	0.000	0.000
Reported PAT	(250.210)	(87.670)
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	(250.210)	(87.670)

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	(10.11)	0.19	8.02
Net Profit Margin (PBT/Sales)	(%)	(15.21)	0.80	10.68
Return on Total Assets (PBT/Total Assets}	(%)	(4.85)	0.24	6.39
Return on Investment (ROI) (PBT/Networth)		0.25	0.01	0.16
Debt Equity Ratio (Total Liability/Networth)		4.34	1.68	1.55
Current Ratio (Current Asset/Current Liability)		1.83	2.88	2.15

LOCAL AGENCY FURTHER INFORMATION

Company history:

Golden Tobacco Limited, the flagship of Dalmia group is one of the prominent players in the cigarette market. The company's principal activity is to manufacture and market cigarettes and processed tobacco. They manufacture various categories of cigarettes, namely full flavor, lights, ultra lights, menthol, menthol lights and extra menthol lights. The company later diversified into petrochemicals, additives, paper, marine products, etc. The company has world class manufacturing units, located at Mumbai in Maharashtra and Vadodara in Gujarat. They also own fully equipped printing press to produce all their packaging material. Some of the major cigarette brands owned by the company include Panama, Flair, Chancellor, Esquire, Legend and Burton. Subject was established in the year 1930 by Narsee Monjee. The company was changed to a private concern in the year 1955 and went public in the year 1970. In the year 1972, the company established their full-fledged manufacturing unit at Vadodara in Gujarat. In the year 1979, the company was taken over by the Dalmia Industries. The company diversified their business into Petrochemicals, additives and paper and hence the name of the company was changed from Golden Tobacco Company Limited to GTC Industries Limited with effect form August 20, 1985. In November 1985, the company started paper production in collaboration with Raigarh Paper Mills. In the year 1993, they commenced operations in their additives division. During the year 1994-95, the company co-promoted DSS Mobile Communication Limited, the Nation's most widely located paging operation. During the year 2004-05, the company subsidiaries, namely Panama Investment and Finance Limited, Rajnigandha Investment and Finance Limited, Olive Investment and Finance Limited and GTC Investment Limited merged with Western Express Industries Limited, the wholly owned subsidiary of the company. During the year 2007-08, the company launched a new category of cigarette, 'DIET BLUE' in the King Size by using their Patented Technology, 'ECOTINE' which is less toxic. In October 2007, the company entered into an agreement for the joint development of property situated at Hyderabad. In July 2008, the company name was changed from GTC Industries Limited to Also, the company decided to de-merge Tobacco and Realty business in two separate companies.

FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE AND DIVIDEND :

Though there was no change in the excise duty structure, at the same time there was no relief given in the mini segment by the Government, in which th company enjoyed the largest market share in the cigarette industry. Beside this the grey market cigarettes continue to be a major threat for the organised sector especially low priced segment. Despite representations, before the Government by the industry, grey market continue to grow at a rapid rate resulting sharp drop in the company’s volume.

Introduction of mini filter (59 mm) in this year budget is a good move by the government.

This year saw the consolidation of the brands launched earlier. They launched new Cigar with the brand name of Golden Cigaro. This product from the stables of Golden Tobacco was received favorably, and was rolled out across the country. But this year budget heavily taxed cigars.

In view of the carried forward losses, the Directors do not recommend any dividend.

REAL ESTATE DEVELOPMENTS:

The Company has started the Real Estate business in the year 2007-08, when its Hyderabad Property was offered for Joint Development with a reputed builder. In addition its Vile Parle Property was offered for Joint Development during the year and has now tied up with a reputed builders of Mumbai to develop this property. The Memorandum of Understanding (MOU) has been signed during the year and an advance of Rs.750.000 millions have been received upto 31st March, 2010.

The existing manufacturing facility of Vile Parle Property is being shifted to Vadodra/Palghar units. The workers have been offered Voluntary Retirement Scheme (VRS) during the year. The response to the scheme was overwhelming as 343 workers out of a total of 352 have opted for the scheme. The workers who have accepted the VRS has already been paid in the month of April, 2010.

MANAGEMENT DISCUSSION AND ANALYSIS:

ENVIRONMENT, OCCUPATIONAL HEALTH AND SAFETY

At the root of a good performance is, a good environment and safe and healthy working conditions. the Company has been in a constant quest for providing to its employees, a very congenial work environment which will in turn add to the performance of the Company. Keeping in mind the dynamism in the environment, your Company is continuously imparting requisite training to its employees in their respective fields of work.

Health and safety of our employees is of primary importance to us. The workplace is designed to abate the hazards naturally connected to their product. There was no accident or any pollution problem noticed during the year at any of the three units. Care is taken that all laws pertaining to environmental pollution, health and safety of employees and other associated enactments are being scrupulously adhered to. Their commitment towards the society in terms of providing a clean and healthy environment is of our utmost concern and we pledge to take active efforts to preserve the same.

CHANGE OF NAME

The Directors are pleased to inform that the name of the Company has been changed from GTC Industries Limited to Subject w.e.f. 23'" July, 2008.

Fixed Assets:

· Land and Building

· Plant and Machinery

· Electric Installations

· Furniture and Fixtures

· Vehicles

· Factory and Office Equipments

Website Details:

Profile:

Subject is a professionally managed organization in the field of tobacco and tobacco related products. Established in the year 1930 by the late Shri. Narsee Monjee, Golden Tobacco is the first wholly owned indigenous company in the country, taken over by Dalmia Group in the year 1979. The group is headed by Mr. Sanjay Dalmia as Chairman and Mr. Anurag Dalmia as Vice Chairman.

Nurtured under the leadership and guidance of Mr. J P Khetan the Managing Director of Golden Tobacco, the company offers customers an exceptional variety of the finest tobacco products, which meet world – class standards of quality and consistency, and is a valid example of contemporary manufacturing techniques, professional Marketing, good HR practice and quality control systems.

Golden Tobacco has manpower strength of 2000 employees spread across manufacturing, purchasing, processing, sales and marketing. The Company has two major production facilities in Mumbai as well as Baroda. To keep the pace with its strategy of providing quality cigarettes to its national and international customers, Golden Tobacco, Vadodara has recently implemented ISO 9001:2000 and has been certified by world’s one of the most reputed accreditation agency RWTUV.

The company’s offerings are grouped under the Brand families of Panama, Chancellor, Golden’s and Steel. Each Brand family has several strong offerings in its portfiolio, such as Panama Virginia Regular and Panama Filter, Chancellor Browns and Chancellor Exclusive, and Golden’s Gold Flake.

Apart from Tobacco Products, the Dalmia group has interests in the fields of Telecommunication, Chemicals, Explosives, Textiles and Holiday Resorts.

Exports:

Subject was established in 1930. The wholly Indian owned company specializes in manufacturing and exporting an exclusive range of Cigarettes, Flavored Cigar, Cigarillos, Roll the Own Smoking mixture and Non Tobacco smoking products.

Subject is engaged in International business from last 3 decades, carving a niche of brilliance in the highly competitive international markets, on the strength of its high quality products, variants and services. The high standard of quality attracted Rothmans of Pall Mall International to subject premises for manufacturing their largest selling brand 'Rothmans' in India.

Subject exports an exceptional variety of Cigarettes and Cigars brands including Chancellor, Panama, Style, Esquire, Flair, June, Just Black and many other private labels all over the globe.

Subject is also exporting Super Slim and Slim Cigarettes under the brand name 'June', which has shown tremendous potential in International Arena. The Company has recently launched Kretek type Clove Cigarettes in Conventional and Tobacco free versions.

Subject success springs from the efforts of an excellent team professional, a modern communication network and a management culture of high ethics which believes in excellent service to its customers in term of quality, packaging, and other value added services which today's intense competition demands.

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.45.58
UK Pound	1	Rs.72.79
Euro	1	Rs.62.01

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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		46

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	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
-	NB	New Business	-

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

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.