MIRA INFORM REPORT

Report Date :

11.04.2012

IDENTIFICATION DETAILS

Name :	NESTLE INDIA LIMITED (w.e.f.24.03.1989)
Formerly Known As :	FOOD SPECIALITIES LIMITED
Registered Office :	M-5A Connaught Circus , New Delhi- 110001, Delhi
Country :	India
Financials (as on) :	31.12.2011
Date of Incorporation :	28.03.1959
Com. Reg. No.:	55-003786
Capital Investment / Paid-up Capital :	Rs.964.157 Millions
CIN No.: [Company Identification No.]	L15202DL1959PLC003786
TAN No.: [Tax Deduction & Collection Account No.]	DELN0507C
PAN No.: [Permanent Account No.]	AAACN0757G
Legal Form :	A Public Limited Liability company. The company’s shares are listed on the Stock Exchange
Line of Business :	Subject is engaged in Manufacture of Milk Products, Soluble Beverage Powder, Soyabean Based Products, Surplus Fat, Other Foods -Own Manufacture and Outside Manufacture.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Aa (77)

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 51000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Exists
Comments :	The company was promoted by Nestle S.A Switzerland and sells over 30 branded products including coffee, tea, milk products, snacks dressing, soups, noodles, chocolates etc. Subject is a well established and a reputed multinational company having good track. Financial positions of the company appears to be sound. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal business dealings 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 – September 30, 2011

Country Name	Previous Rating (30.06.2011)	Current Rating (30.09.2011)
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 :	M-5A Connaught Circus , New Delhi- 110001, Delhi, India
Tel. No.:	91-11-23329507 / 23320379 / 23712741 / 2332 9891/23418891
Fax No.:	91-11-23329297 / 23314812 / 23722756 / 2372 5130/23415130
E-Mail :	investor@in.nestle.com cosumer.service@in.nestle.com investor@in.nestle.com careers@in.nestle.com communication@in.nestle.com export.enquiry@in.nestle.com
Website :	www.nestle.in
Head Office :	Nestle House, Jacaranda Marg ‘M’ Block, DLF City Phase II, Gurgaon – 122 002, Haryana, India
Tel No.:	91-124-2389300
Fax No.	91-124-2389399
Factory :	Village Maulinguem (North), Bicholim Taluka – 403 504, Goa, INDIA Plot No. 294-297, Usgao Industrial Area, Ponda – 403 406, Goa, INDIA Ludhiana-Ferozepur Road, Near Kingwah Canal, Moga – 142 001, Dist. Moga, Punjab, INDIA Industrial Area, Nanjangud – 571 301, Mysore District, Karnataka, INDIA P. O. Cherambadi – 643 205, Dist. Nilgiris, Tamilnadu, INDA Patti Kalyana, Kiwana Road, Samalkha – 132 101, Dist. Panipat, Haryana, India Plot No. 1, Sector No. - IA, Integrated Industrial Estate, SIDCUL, Pantnagar - 263 145, District Udhamsingh Nagar (Uttarakhand), INDIA
Branches :	Located at v Tamilnadu v West Bengal v Maharashtra v New Delhi

DIRECTORS

As on : 31.12.2011

Name :	Mr. Antonio Helio Waszyk
Designation :	Chairman and Managing Director
Name :	Mr. Shobinder Duggal
Designation :	Director - Finance and Control
Name :	Mr. Michael W.O. Garrett
Designation :	Non Executive Director
Name :	Mr. Ravinder Narain
Designation :	Non Executive Director
Name :	Mr. Christain Schmid
Designation :	Director – Technical
Name :	Dr. Rakesh Mohan
Designation :	Non Executive Director
Name :	Mr. Richard Sykes
Designation :	Alternate Director to Michael W.O. Garrett
Name :	Dr. Swati A. Piramal
Designation :	Non Executive Director
Name :	Mr. Ashok Kumar Mahindra
Designation :	Non Executive Director

KEY EXECUTIVES

Name :	Mr. B Murli
Designation :	Senior Vice President – Legal and Company Secretary
Management Committee	Mr. Antonio Helio Waszyk - Chairman and Managing Director Mr. Shobinder Duggal - Finance and Control Mr. Christain Schmid – Technical Mr. Ganesan Ampalavanar - Sales Mr. Biplab Baksi - Human Resources Mr. Luca Flchera – Supply Chain Mr. Shivani Hegde – Foods Mr. Binu Jacob – Nutrition Mr. B. Kanann - Chocolate and Confectionery Mr. Sanjay Khajuria - Corporate Affairs Mr. Vineet Khanna - Supply Chain Mr. Virat Mehta – Communications Mr. Chandan Mukherji – Consumer Insight Mr. B. Murli - Legal and Company Secretary Mr. Kumaran Nowuram - Dairy Mr. Zender Taningco - Nestle Professional Mr. Rajkamal Sharma - Exports Mr. Nili Zur – Beverages

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As On 31.12.2011

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter group
(1) Indian
(2) Foreign
Bodies Corporate	60515079	62.76
Sub Total	60515079	62.76
Total shareholding of Promoter and Promoter Group (A)	60515079	62.76
(B) Public Shareholding
(1) Institutions
Mutual Funds / Axis Bank	2111777	2.19
Financial Institutions / Banks	760667	0.79
Insurance Companies	4843633	5.02
Foreign Institutional Investors	10514411	10.91
Sub Total	18230488	18.91
(2) Non-Institutions
Bodies Corporate	2049811	2.13
Individuals-
i. Individual shareholders holding nominal share capital upto Rs.0.100 million	9862943	10.23
ii. Individual shareholders holding nominal share capital upto Rs.0.100 million	5378443	5.58
Any Others (Specify)	378952	0.39
Non-Resident Individual	378952	0.39
Sub Total	17670149	18.33
Total Public shareholding (B)	35900637	37.24
Total (A)+(B)	96415716	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)	96415716	--

BUSINESS DETAILS

Line of Business :	Subject is engaged in Manufacture of Milk Products, Soluble Beverage Powder, Soyabean Based Products, Surplus Fat, Other Foods -Own Manufacture and Outside Manufacture.
Products :	Product Description	Item Code No. (ITC Code)
	Soluble Coffees, Coffee Blends and Tea	21.01.0000
	Preparation of Milk, Cream and Cereals	19.01.0000
	Milk Concentrated or Condensed	04.02.0000
	Noodles	19.02.0000

PRODUCTION STATUS AS ON 31.12.2011

Particulars	Unit	Licensed capacity	Installed Capacity	#Actual Production
Milk Products and Nutrition	MT	186702	162107	148964
Beverages	MT	47750	46353	26944
Prepared dishes and cooking aids	MT	507287	226447	220165
Chocolate and confectionery	MT	48500	36052	52091

Note :

# Includes product manufactured by contract manufacturers on conversion basis.

(a) Licensed/IEM Capacity include registered capacities of industrial activities existing prior to the Industries (Development and Regulation) Act, 1951 and capacities as shown in the Industrial Entrepreneurs Memorandum (IEM) filed with the Government pursuant to Notification no. 477(E) dtd. 27-07-1991 under the said Act.

(b) The installed capacities are as certified by the management on which the auditors have relied. These are based on maximum utilization of the plant and machinery taking into account production efficiencies, maintenance of plant and machinery, shifts, seasonality etc.

(c) The products are manufactured in integrated plants as certified by the Management on which the auditors have relied. Hence, in respect of all the above class of goods, individual registered/installed capacities given can vary depending on the product mix.

(d) Actual production and purchases include purchase of 22,249 MT (22,399 MT) in Milk Products and Nutrition, 208 MT (231 MT) in Beverages, 12 MT (Nil MT) in Prepared dishes and cooking aids, 222 MT (218 MT) in Chocolate and Confectionery. The total value of these purchases is Rs. 1148.033 Millions (Rs. 957.038 Millions).

(e) Previous year's figures are indicated in brackets.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

• Citibank NA1
• Bank of America
• Bank of Tokyo-Mitsubishi UFJ
• JP Morgan Chase bank N. A.
• HDFC Bank Limited
• lClCl Bank Limited
• Standard Chartered Bank
• Punjab National Bank
• Deutsche Bank
• State Bank of Hyderabad

Facilities :

Secured Loan	As on 31.12.2011 (Rs. in Millions)	As on 31.12.2010 (Rs. in Millions)
Loans from banks	8.402	0.000
Total	8.402	0.000
Unsecured Loan	As on 31.12.2011 (Rs. in Millions)	As on 31.12.2010 (Rs. in Millions)
Short Term Loans
From Banks - Buyers Credit	2450.840	0.000
Other Loans
From Holding Company - External Commercial Borrowings	7249.480	0.000
Total	9700.320	0.000

Banking Relations :	--
Auditors :
Name :	A F Ferguson and Company Chartered Accountants
Address :	9 Scindia House, Kasturba Gandhi Marg, New Delhi- 110001, India
Tel No.:	91-11-23315884
Fax No.:	91-11-23314561
E-mail :	affdelhi@bol.net.in
Memberships :	v Confederation of Indian industry
Holding Company :	v Nestle S A v Maggi Enterprises Limited
Associates/Subsidiaries :	v Belte Schweiz AG v Galderma India Private Limited v Nestec York Limited v Nestlé (Fiji) Limited v Nestlé (China) Limited v Nestlé(PNG) Limited v Nestlé (South Africa) (Pty) Limited v Nestlé (Thai) Limited v Nestlé Australia Limited v Nestlé Bangladesh Limited v Nestlé Brazil Limited v Nestlé Central And West Africa Limited v Nestlé Deutschland AG v Nestlé Egypt S.A.E v Nestlé Foods Kenya Limited v Nestlé France S.A.S, v Nestlé Ghana Limited v Nestlé Hong Kong Limited v Nestlé Hungaria Kft v Nestlé Iran (Private Joint Stock Company) v Nestlé Japan Limited v Nestlé Korea Limited v Nestlé Kuban LLC v Nestlé Lanka PLC v Nestlé Manufacturing (Malaysia) Sdn. Bhd v Nestlé Middle East FZE v Nestlé Nederland B.V v Nestlé Nigeria PLC v Nestlé Pakistan Limited v Nestlé Philippines Inc, v Nestlé Polska S.A v Nestlé Product Technology Centre Lebensmittelforschung GMBH v Nestlé Products Sdn..Bhd v Nestlé R and D Centre (Pte) Limited v Nestlé Romania S.R.L v Nestlé Shanghai Limited v Nestlé Singapore (PTE) Limited v Nestlé Suisse S.A v Nestlé Taiwan Limited v Nestlé Tianjin Limited v Nestlé Trading (Fiji) Limited v Nestlé Turkiye Gida Sanayi A.S v Nestlé UK Limitrd v Nestlé USA Inc v Nestlé Vietnam Limited v Nestlé Waters Supply Est v Nestrade-Nestlé World Trade Corporation v Osem Food Industries Limited v Osem UK Limited v PT Nestlé Indonesia v Servcom SA v Société des Produits v Nestlé S.A. v Speciality Foods India Private Limited v Nestlé Canada Inc v Nestlé Bolivia S.A v Nestlé Waters France S.A.S v Nestlé R and D Center Shanghai Limited v Nestlé Italiana S. P. A v Nestlé Maroc S.A v Nestlé Portugal S.A v Nestlé Panama S.A v Nestlé Senegal v Nestlé Adriatic doo, v Nestlé New Zealand Limited v Nestlé Shuangcheng Limited v Nestlé Mexico S.A.de C.V v Nestlé's Products (Mauritius) Limited v Nestlé Business Services S.A. v Nestlé Dongguan Limited v Nestlé Equatorial Africa Region (EPZ) Limited. v Nestlé Cesko S.R.O., Nestlé Product v Technology Centre v Nestlé Asean (Malaysia) Sdn. Bhd., v Societe Pour L’Exportation Des Produits Nestlé S.A., v Al Manhal Water Factory Company Limited v Nestlé Syria Limited v Nestlé Manufacturing Limited v Nestlé Waters Product Technology Centre v Nestlé (Ireland) Limited

CAPITAL STRUCTURE

As on 31.12.2011

Authorised Capital :

No. of Shares	Type	Value	Amount
100000000	Equity Share	Rs.10/- Each	Rs. 1000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
96415716	Equity Share	Rs.10/- Each	Rs. 964.157 Millions

Note:

Of the Above:

1. 73413626 Shares of Rs. 10 each (Previous year 73,413,626) were allotted as fully paid-up bonus shares by capitalization of general reserves Rs. 73.897 millions (Previous year Rs. 73.897 millions) and share premium Rs. 660.239 millions (Previous year Rs. 660.239 millions).
2. 736331 Shares of Rs.10 each (Previous year 736,331) were allotted as fully paid up pursuant to a contract without payment being received in cash.

Of the Above:

1. 32166274 Shares of Rs.10 each (previous year 32166274) are held by Nestle S.A
2. 27463680 Shares of Rs.10 each (Previous year 27463680) are held by Maggi Enterprises Limited =, the ultimate holding company being Nestle S.A

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2011	31.12.2010	31.12.2009
SHAREHOLDERS FUNDS
1] Share Capital		964.157	964.157	964.157
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		11775.355	7589.982	4848.793
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		12739.512	8554.139	5812.950
LOAN FUNDS
1] Secured Loans		8.402	0.000	0.000
2] Unsecured Loans		9700.320	0.000	0.000
TOTAL BORROWING		9708.722	0.000	0.000
DEFERRED TAX LIABILITIES		434.980	332.724	319.972
TOTAL		22883.214	8886.863	6132.922
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		15757.522	10127.373	8962.048
Capital work-in-progress		14186.385	3489.080	796.273
INVESTMENT		1343.655	1506.788	2032.555
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	7340.385	5759.516	4987.379
	Sundry Debtors	1154.245	632.854	641.863
	Cash & Bank Balances	2272.097	2552.915	1555.863
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	1963.535	1514.412	1380.487
Total Current Assets		12730.262	10459.697	8565.592
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	9978.737	7454.376	5875.906
	Other Current Liabilities	117.539	162.326
	Provisions	11038.334	9079.373	8347.940
Total Current Liabilities		21134.610	16696.075	14223.846
Net Current Assets		(8404.348)	(6236.378)	(5658.254)
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		22883.214	8886.863	6132.622

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2011	31.12.2010	31.12.2009
	SALES
		Income	74908.209	62547.425	51293.767
		Other Income	508.905	426.541	377.976
		TOTAL (A)	75417.114	62973.966	51671.743
Less	EXPENSES
		Material Consumed and Purchase of goods	36376.565	31385.105	24570.317
		Manufacturing and other Expenses	23486.874	19495.229	16465.167
		Adjustment due to Increase/ Decrease in finished goods	(482.867)	(829.427)	(86.545)
		Impairment loss / Gain on fixed Assets	103.867	0.000	103.168
		Provision for contingencies	469.037	183.679	323.201
		TOTAL (B)	59953.476	50234.586	41375.308
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		15463.638	12739.380	10296.435
Less	FINANCIAL EXPENSES (D)		51.085	10.745	13.985
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		15412.553	12728.635	10282.450
Less/ Add	DEPRECIATION/ AMORTISATION (F)		1533.310	1277.533	1112.692
	PROFIT BEFORE TAX (E-F) (G)		13879.243	11451.102	9169.758
Less	TAX (I)		4263.773	3264.454	2619.730
	PROFIT AFTER TAX (G-I) (J)		9615.470	8186.648	6550.028
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		3345.027	1425.203	1001.053
Less	APPROPRIATIONS
		Transfer to General Reserve	961.547	818.665	655.003
		Interim Dividend	3470.966	3470.966	3470.966
		Final Proposed	1205.196	1205.196	1205.196
		Corporate Dividend Tax	753.935	771.997	794.713
	BALANCE CARRIED TO THE B/S		6568.853	3345.027	1425.203
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	3091.644	2472.967	2453.405
		Commission Earnings	810.207	1030.455	807.696
		Other Earnings	5.568	1.587	0.474
	TOTAL EARNINGS		3907.419	3505.009	3261.575
	IMPORTS
		Raw Materials	2508.372	2434.819	1925.727
		Stores & Spares	90.509	56.638	65.663
		Capital Goods	7206.353	1189.272	533.150
		Others	240.393	162.685	62.238
	TOTAL IMPORTS		10045.627	3843.414	2586.778
	Earnings Per Share (Rs.)		99.73	84.91	67.94

KEY RATIOS

PARTICULARS		31.12.2011	31.12.2010	31.12.2009
PAT / Total Income	(%)	12.75	13.00	12.67
Net Profit Margin (PBT/Sales)	(%)	18.53	18.61	17.87
Return on Total Assets (PBT/Total Assets}	(%)	48.72	55.62	52.31
Return on Investment (ROI) (PBT/Networth)		1.09	1.34	1.57
Debt Equity Ratio (Total Liability/Networth)		2.42	1.95	2.44
Current Ratio (Current Asset/Current Liability)		0.60	0.63	0.60

LOCAL AGENCY FURTHER INFORMATION

Financial Results:

Net Profit for the year 2011 increased by 17.50%. The cost of materiel for good sold in percentage of Net sale has decreased to 47.9% from 48.9% in 2010, mainly due id improved product / channel mix and nestle Continuous. Excellence initiatives partially offset by the higher input cost inflation. Tax expense increase is higher than the increase in Net profit due to the end of the first years on income- tax holiday @100% of profits from the pantnagar factory. Effective 1^st April, 2011 for the next five years, the tax holiday will continue @30% of profits from pantnagar factory. The increase in interest and Financing Expenses is after reducing Rs.1100.000 Millions out of the costs of borrowing. Which comprise largely of the exchange loss on External Commercial borrowing as this has been treated as capital expenditure in line with applicable Accounting Standards.

The company continues to emphasize cash generation and delivered strong operating cash fkow during the year short term surplus funds arising out of timing differences between generation and utilization thereof, have been prudently invested after ensuring that such investments satisfy the company’s criteria of safety, liquidity and return.

The impairment Loss on Fixed assets of Rs,104.000 Millions relates to various items of plant and machinery that have been brought down to their recoverable vale upon evaluation of future economic benefits from their use and is net of deferred taxes of Rs.70.000 Millions.

The company supplemented the provision for contingencies with further amount of Rs.469.000 Millions (net) for contingencies resulting mainly from issues, which are under litigation/dispute and other uncertainties requiring management judgment. This was after the reversal/ utilization of Rs.24.000 Millions Provision, due to settlement of certain disputes for which provision was no longer required. The current year has commenced with uncertainties and ambiguity especially with respect to the political and economical environment which requires careful alternation but the directors are committed to sustain momentum. The company is hopeful the government, through its policies, will to India’s growth model with moderate inflation.

The directors are confident of the long term business prospects of the company.

Exports:

During the year, Export Seles at Rs. 3366.000 Millions was higher by 11.9%.

The increase in exports wet largely on account of increase in exports of Coffee to Russia end Egypt aided by better realization Exports o) coffee to Turkey also received a further fillip due to development of a new grade fur that market Efforts have been to widen the direction of coffee exports In addition, the year saw an increase in exports or the culinary range to United States of America end United Kingdom, aimed at the Indian Diaspora Concentrated efforts, were made to increase penetration in the ethnic segment. These increases were offset by the ban on export of Milk powders.

Exports'' Instance: Tea witnessed good increase during 2011, particularly to Mexico, Japan arid Singapore. Continuous efforts to innovate end renovate products, ensures that your Company remains updated on customer requirements, which is essential for new business development.

The Company continued its efforts to develop more products for the Indian ethnic commune fibroid and creeks new products were developed during the year, which would be snipped during the ensuing year. Some new grades of Instant Tea have been developed in response to customer specification end these will add variety and value to the portfolio in the coming years.

DIVIDENDS

The Board of Directors has recommended a final dividend of Rs. 12.50 per equity here of the face value of Rs. 10/- each for the year 2011, amounting tufts. Rs.1205.000 Million. This is in addition to the two interim Dividends for 2011, aggregating to Rs. 36.00 per equity share, paid in may 2011 and December 2011 {amounting to Rs.3471.000 Million). The total dividend payout for 2011 would be Re. 4676.000 Million (excluding the corporate dividend tax}, and maintains the total dividend payout for 2010, and fee in keeping with the financing needs for capital expenditure.

SALES

The Company has always emphasized its preference for reaching consumers wherever they may be and with products that are fresh. It has also always recognized the importance of an efficient distribution structure that delivers these products from factory to consumers In the shortest time. The Company continued to expand the reach of its products at an accelerated pace, and like the earner year 2010, added another 400,000 outlets in the year 2011, contributing to a very fast

growing sales network in the food industry.

This systematic focus on building a wider and deeper distribution across geographies is only one dimension of how the Company is building its sales capacity. The other dimension that has always been very Important for the Company is the reliability and efficiency of the operations where it has been systematically cutting out waste and focusing on increasing the productivity Of its partners in the distribution system. The project on sales automaton In the previous year created a robust distributor management solution and has facilitated a more transparent record of transactions in primary and secondary sales. During 2011 this effort was slapped up fanner and the Distributors are now being trained to improve their processes and operations with Nestle Continuous Excellence.

Opportunities:

• Potential for expansion in smaller towns and other geographies.
• Increasing demand for premium products
• Introduction of GST to simplify the distribution network
• Development of ‘Out of Home’ segment and Health Care Nutrition
• Leverage Nestle Technology to develop more products that provide Nutrition, Health and Wellness at affordable prices.

Fixed Assets

v Freehold Land

v Leasehold Land

v Building

v Railway Siding

v Plant and Machinery

v Furniture and Fixture

v Information Technology

v Equipments

v Vehicles

Press Release:

Nestle India Celebrates 100 years with Earnings per Share at - 100 Rupees

· NET SALES: Rs.74908.000 Millions.

· NET PROFIT: Rs. 9616.000 Millions.

· Domestic Sales : Rs.70950.000 Millions

· Enables contribution to exchequer of Rs.18720.000 Millions

· Capacity expansions on track

· Sustained focus on working with Communities on Nutritional Awareness, Water Sustainability and Rural Development.

· Recommends Final Dividend of Rs.12.50 Per share

NESTLE HOUSE, Gurgaon 14^th February, 2012: The Board of Directors of Nestle India met today at Nestle House and announced results for the Full Year 2011.

Commenting on the results for full year 2011, Mr. A Helio Waszyk, Chairman and Managing Director, Nestle India said "What an achievement to have our EPS touching 100 Rupees at the time Nestle India is celebrating 100 years! This has been possible due to the strength of our Brands, the engagement of our People and the strong support provided by Nestle S.A. We are proud to be part of India's success story and continue to create shared value with our business partners and in the communities where we operate. While the current environment is uncertain and volatile requiring cautious attention, we continue our journey. We are just starting to operate the Rs.20000.000 Millions investments made in manufacturing and distribution creating additional jobs and at the same time continuing to reward our confident people - our main competitive advantage!"

NET SALES

Net Sales for the Full Year 2011 were Rs.74908.000 Millions and have increased by 19.8% over 2010. Domestic Sales increased by 20.2% on account of selling prices and volumes. Export growth has been adversely impacted by the ban on exports of Milk Powder.

NET PROFIT

Net Profit at Rs.9616.000 Millions for the year has increased from Rs.8187.000 Millions in 2010. Earnings per Share increased to Rs.99.73.

The cost of materials for goods sold as percentage of Net Sales has decreased largely due to improved product/channel mix and Nestle Continuous Excellence initiatives, partially offset by the higher input cost inflation. The increase in employees cost is the result of our policy of continuing to invest in our people. In 2011 we continued to reward performance and have also added 1000 more employees.

The increase in Tax Expense is higher than the increase in Profit before Tax due to the fact that on completion of 5 years of the Pantnagar factory, the 100% income tax holiday was reduced to 30% of the profits of Pantnagar factory. Effective from April 2011, it will continue at the same rate for the next 5 years.

QUARTER 4 ENDED DECEMBER 2011

Net Sales during Quarter 4 were Rs.19547.000 Millions and have increased by 17.0% over the same Quarter in 2010.

DIVIDENDS

The Board of Directors has recommended a final dividend for 2011 of Rs. 12.50 per equity share (nominal value Rs.10/- per equity share). This is in addition to the two interim dividends for 2011. of Rs. 9.00 and Rs. 27.00 per equity share paid in May 2011 and December 2011 respectively. The total dividend per share in 2011 aggregates to Rs. 48.50, the same as in 2010 and 2009, and is in keeping with the financing needs for capital expenditure.

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.51.20
UK Pound	1	Rs.81.50
Euro	1	Rs.67.15

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	9
--LIQUIDITY	1~10	9
--LEVERAGE	1~10	8
--RESERVES	1~10	9
--CREDIT LINES	1~10	9
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	YES
--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		77

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.