MIRA INFORM REPORT

Report Date :

09.03.2011

IDENTIFICATION DETAILS

Name :	ETHNIC TOBACCO (INDIA) LIMITED (w.e.f. 05.09.2007)
Formerly Known As :	ETHNIC TOBACCO INDIA PRIVATE LIMITED
Registered Office :	D. No.6-23-6/A, Jaya Towers, 5^th Lane, 4^th Cross Road, Arundalpet, Guntur-522 002, Andhra Pradesh
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	23.12.2005
Com. Reg. No.:	01-48552
CIN No.: [Company Identification No.]	U16001AP2005PLC048552
TAN No.: [Tax Deduction & Collection Account No.]	HYDE01118F
Legal Form :	A closely held public limited liability company.
Line of Business :	Manufacturer and Trader of Indian Tobacco Products.

RATING & COMMENTS

MIRA’s Rating :

B (30)

RATING		STATUS	PROPOSED CREDIT LINE
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small

Maximum Credit Limit :	USD 1200000
Status :	Moderate
Payment Behaviour :	Slow But Correct
Litigation :	Clear
Comments :	Subject is an established company having moderate track. Trade relations are reported as fair. Business is active. Payments are reported to be slow but correct. The company can be considered for business dealings with some caution.

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

INFORMATION PARTED BY

Name :	Mr. Murli Mohan
Designation :	Managing Director
Contact No.:	91-9866666333
Date :	08.03.2011

LOCATIONS

Registered Office :	D. No.6-23-6/A, Jaya Towers, 5^th Lane, 4^th Cross Road, Arundalpet, Guntur-522 002, Andhra Pradesh, India
Tel. No.:	91-863-5535566/6535577
Fax No.:	91-863-2338999/2266444
E-Mail :	tvrao@ethnictobaccoindia.com
Website:	www.ethnictobaccoindia.com

DIRECTORS

As On : 17.08.2010

Name :	Mr. Tadisetty Murali Mohan
Designation :	Managing Director
Address :	D. No.6-23-6/4, Ground Floor, Jaya Towers, Congress Office, 5/4, Arundel Pet, Guntur-522 002, Andhra Pradesh, India
Date of Birth/Age :	12.07.1968
Date of Appointment :	23.12.2005
DIN No :	00302399
Name :	Mr. Tadisetty Venkata Rao
Designation :	Directors
Address :	D. No. 7-7-51, 7^th Line, Kakumanuvari Thota, Guntur-522 002, Andhra Pradesh, India
Date of Birth/Age :	30.08.1968
Date of Appointment :	23.12.2005
DIN No :	00302295
Name :	Mr. Janjanam Vidyanath
Designation :	Directors
Address :	D. No.17/7/5, Sri Gardens, Dilsuk Nagar, Hyderabad-500 060
Date of Birth/Age :	28.03.1975
Date of Appointment :	09.08.2007
DIN No :	01288689

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 17.08.2010

Names of Shareholders	No. of Shares
Tadisetty Venkata Rao	9740335
Tadisetty Murali Mohan	13754621
Janjanam Vidyanath	908090
P. Venkateswarlu	100
V. Ravi Kumar	100
K. Koteswara Rao	100
R. Veeraswamy	100
Total	24403446

AS ON 17.08.2010

Equity Share Breakup		Percentage of Holding
Category
Directors or relatives of directors		100.00
	Total	100.00

BUSINESS DETAILS

Line of Business :	Manufacturer and Trader of Indian Tobacco Products.
Products :	Indian Tobacco Products
Terms :
Selling :	Cash, Credit
Purchasing :	Cash, Credit

GENERAL INFORMATION

Suppliers :

v Chebrolu Agros Private Limited

v Tobacco Board Auction Plant Forms

v Agro Products Limited

Customers :

Wholesaler, Retailers

v A.S. Krishna and Company Private Limited

v Gita Cotton Trading Company

v Mittapalli Audinarayana Enterprises Private Limited

v Chebrolu Agras Private Limited

v Valora Exports and Imports

v Indian Tobacco Private Limited

v M L Exports

v Innovia Tobacco Private Limited

v Tribac Asia Pte Limited

No. of Employees :

100 (Approximately)

Bankers :

State Bank of India, Specialized Commercial Branch, Kannavarithota, Guntur-522004, Andhra Pradesh, India

Facilities :

SECURED LOAN	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
State Bank of India – TL (Honda CR-V)	0.000	1.085
State Bank of India – TL (Office)	10.297	10.818
State Bank of India – EPC	322.500	100.548
State Bank of India – CC	47.996	84.984
State Bank of India – CC Standby Line of Credit	70.842	27.022
State Bank of India – CC SLC ADHOC	50.644	0.000
Total	502.279	224.457
UNSECURED LOAN	31.03.2010 Rs. In Millions	31.03.2009 Rs. In Millions
From Directors and Relatives	3.313	0.000
Total	3.313	0.000

Banking Relations :	--
Auditors :
Name :	Ch. Ganapathi Chartered Accountants
Address :	4^th Lane, Brodipet, Guntur-522 001, Andhra Pradesh, India

CAPITAL STRUCTURE

As On : 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
30000000	Equity Shares	Rs. 10/- each	Rs. 300.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
24403446	Equity Shares	Rs. 10/- each	Rs. 244.034 millions
	Share Application Money		Rs.17.625 millions
	Total		Rs. 261.659 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		244.034	41.992	8.649
2] Share Application Money		17.625	0.000	19.851
3] Reserves & Surplus		58.120	17.601	10.320
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		319.779	59.593	38.820
LOAN FUNDS
1] Secured Loans		502.279	224.457	92.460
2] Unsecured Loans		3.313	0.000	13.492
TOTAL BORROWING		505.592	224.457	105.952
DEFERRED TAX LIABILITIES		0.942	1.257	0.131
TOTAL		826.313	285.307	144.903
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		36.397	29.044	14.307
Capital work-in-progress		120.203	0.000	0.000
INVESTMENT		1.001	1.001	1.001
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	612.512	327.853	115.694
	Sundry Debtors	141.298	133.109	22.236
	Cash & Bank Balances	29.836	11.069	3.130
	Other Current Assets	12.505	5.449	4.047
	Loans & Advances	9.314	10.428	1.060
Total Current Assets		805.465	487.908	146.167
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	84.147	22.055	1.947
	Other Current Liabilities	32.684	203.986	11.254
	Provisions	19.922	6.638	3.437
Total Current Liabilities		136.753	232.679	16.638
Net Current Assets		668.712	255.229	129.529
MISCELLANEOUS EXPENSES		0.000	0.033	0.066
TOTAL		823.313	285.307	144.903

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Tobacco Sale Income	1292.568	511.808	308.916
		Other Income	10.691	0.539	0.000
		TOTAL (A)	1303.259	512.347	308.916
Less	EXPENSES
		Cost of Materials	1057.493	410.709	246.066
		Manufacturing Expenses	117.541	48.821	30.362
		Directors Expenses	14.165	7.380	7.171
		Increase/(Decrease) in Finished Goods	(20.020)	(1.605)	0.000
		Staff Salaries and Other Expenses	7.756	2.472	1.301
		Postage and Telephones	1.572	0.320	0.015
		Administrative Expenses	13.404	5.601	1.007
		General Expenses	0.748	0.343	0.148
		Miscellaneous Expenses	0.292	0.186	0.061
		Written Off	0.033	0.033	0.034
		TOTAL (B)	1192.985	474.260	286.165
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		110.274	38.087	22.751
Less	FINANCIAL EXPENSES (D)		47.470	21.836	12.053
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		62.804	16.251	10.698
Less/ Add	DEPRECIATION/ AMORTISATION (F)		2.928	1.191	1.038
	PROFIT BEFORE TAX (E-F) (G)		59.876	15.060	9.660
Less	TAX (H)		19.357	7.779	3.505
	PROFIT AFTER TAX (G-H) (I)		40.519	7.281	6.155
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		17.601	10.320	4.165
	BALANCE CARRIED TO THE B/S		58.120	17.601	10.320
	EXPORT VALUE		870.395	220.777	NA
	Earnings Per Share (Rs.)		1.66	1.73	7.12

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	3.11	1.42	1.99
Net Profit Margin (PBT/Sales)	(%)	4.63	2.94	3.13
Return on Total Assets (PBT/Total Assets}	(%)	7.11	2.91	6.02
Return on Investment (ROI) (PBT/Networth)		0.19	0.25	0.25
Debt Equity Ratio (Total Liability/Networth)		2.01	7.69	3.16
Current Ratio (Current Asset/Current Liability)		5.89	2.10	8.78

LOCAL AGENCY FURTHER INFORMATION

Note : Registered Office of the company has been shifted from ETHNIC TOBACCO (INDIA) PRIVATE LIMITED, Andhra Pradesh, India to the present address w.e.f.19.04.2007

SUNDRY CREDITORS DETAILS

(Rs. In Millions)

PARTICULARS	31.03.2010	31.03.2009	31.03.2008
Sundry Creditors
ADVANCE FROM CUSTOMERS
Universal Leaf Tobacco Company Inc	75.566	0.000	0.000
Creditors for Expenditure	8.581	22.055	0.000
Essae Teraoka Limited	0.000	0.000	0.039
D T E Exports Private Limited	0.000	0.000	1.883
M Sherif and Sons Private Limited	0.000	0.000	0.025
Total	84.147	22.055	1.947

OPERATIONS

The Company has gained the momentum and has recorded the turnover of Rs 132.328 millions during the year. The net profit before tax was Rs 59.876 (15.060) millions and after tax it was Rs 40.519 (7.282) millions. The whole amount was accumulated as reserve available for the carrying on the business. The Paid up Capital was Rs 261.659 (41.992) millions. And a further amount of Rs NIL millions was introduced as Share Application money, pending for allotment.

FORM 8

Corporate identity number of the company	U16001AP2005PLC048552
Name of the company	ETNIC TOBACCO (INDIA) LIMITED
Address of the registered office or of the principal place of business in India of the company	D. No.6-23-6/A, Jaya Towers, 5^th Lane, 4^th Cross Road, Arundalpet, Guntur-522 002, Andhra Pradesh, India
This form is for	Modification of charge
Type of charge	Book Debts Movable Property Immovable Property
Particular of charge holder	State Bank of India, Commercial Branch, Kannavarithota, Guntur-522 004, Andhra Pradesh, India
Nature of instrument creating charge	Form C.1-A Form C.2-A Form C.5 Form SME-7
Date of instrument Creating the charge	27.09.2010
Amount secured by the charge	Rs. 1211.800 millions
Brief of the principal terms an conditions and extent and operation of the charge	Rate of interest TL I - Card rate presently @ 7.25% above Base Rate i.e., 14.75% TL II - 4.25% above Base Rate i.e., 11.75% TL III - 4.50% above Base Rate i.e., 12.00% Cash Credit - 4.50% above Base Rate i.e., 12.00% Terms of repayment Cash Credit repayable on demand. The Term Loan III of Rs. 190.000 millions shall be repayable in 81 monthly installments Margin Raw materials - 30.00% Stock-in-process - 30.00% Finished goods - 30.00% Book debts/receivables - 40.00% Term Loan - 33.80% EPC - 10.00% EPCG BG - 33.80% Extent and operation of the charge Charge operates full on securities.
Short particulars of the property charged (Including location of the property)	1. Working Capital - Hypothecation of Company's Stocks, Receivables and other current assets of the Company. Extension of Charge on Company's fixed assets. 2. Extension of Equitable Mortgage of lease holds rights of land admeasuring Ac. 8.30 cents located at D. No. 5/1, Edulapalem village, Prathipadu mandal, Guntur District for working capital. 3. Extension of Equitable Mortgage of lease holds rights of land admeasuring Ac. 0.30 cents located at D. No. 5/1, Edulapalem village, Prathipadu mandal, Guntur District for working capital. 4. Term Loans - Hypothecation of Company's fixed assets acquired out of Bank loan. 5. Equitable Mortgage on lease hold rights of land admeasuring Ac. 8.30 cents located at D. No. 5/1, Edulapalem village, Prathipadu mandal, Guntur District for Term Loans. 6. Equitable Mortgage of lease holds rights of land admeasuring Ac. 0.30 cents located at D. No. 5/1, Edulapalem village, Prathipadu mandal, Guntur District for working capital. 7. Extension of Charge on Stocks, Receivables and other current assets of the Company for Term Loans. 8. Extension of Lease hold rights of an extent of 5269 sq. ft area of Jaya Towers, Ground floor, 1 to 14 shops and 1^st floor, Flat No. 102 along with all accessories with SC connection and common corridor passage parking drainage and easement rights at D. No. 6-23-6, 5th Line Arundelpet, Guntur.
Charge identification number of the charge to be modified	10006385
Particulars of the present modification	Overall limits enhanced from Rs. 909.700 millions to Rs. 1211.800 millions

FIXED ASSETS:

v Furniture and Fixtures

v Vehicles

v Other Equipment

v Computer

TRADE REFERENCE

· A. S. Krishna and Company Private Limited

· M L Exports

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.45.03
UK Pound	1	Rs.72.97
Euro	1	Rs.62.94

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	3
PAID-UP CAPITAL	1~10	4
OPERATING SCALE	1~10	4
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	4
--PROFITABILIRY	1~10	3
--LIQUIDITY	1~10	4
--LEVERAGE	1~10	3
--RESERVES	1~10	2
--CREDIT LINES	1~10	3
--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	NO
--LISTED	YES/NO	NO
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		30

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.