MIRA INFORM REPORT

Report Date :

25.09.2012

IDENTIFICATION DETAILS

Name :	MCLEOD RUSSEL INDIA LIMITED
Registered Office :	4, Mangoe Lane, Surendra Mohan Ghosh Sarani, Hare Street, Kolkata – 700001, West Bengal
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	05.05.1998
Com. Reg. No.:	87076
Capital Investment/ Paid-up Capital:	Rs.547.279 Millions
CIN No.: [Company Identification No.]	L51109WB1998PLC087076
TAN No.: [Tax Deduction & Collection Account No.]	CALM06113C
PAN No.: [Permanent Account No.]	AAACE6918J
Legal Form :	A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.
Line of Business :	Manufacturer of Tea.
No. of Employees:	80000 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (65)

RATING		STATUS	PROPOSED CREDIT LINE
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

Maximum Credit Limit :	USD 66450000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is an established company having fine track. Financial position of the company appear to 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 – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

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

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office/Tea Sales Shopping Department : :

4, Mangoe Lane, Surendra Mohan Ghosh Sarani, Hare Street, Kolkata-700001, West Bengal, India

Tel. No.:

91-33-22101221/ 22435391/ 22489434/ 35

Fax No.:

91-33-22488114/ 22483683

E-Mail :

administration@wmg.co.in

administrator@wmg.co.in

tea_sales@wmg.co.in

mcleod_investors@wmg.co.in

PLANT LOCATION

Assam
Bishnauth	Dekorai, Mijicajan, Monabarie, Pertabghur
Dhunseri	Behora, Bukhial
Doom Dooma	Baghjan, Bordubi, Koomsong, Phillobari, Beesakopie/Daimukhia, Raidang, Samdang
East Boroi	Bargang, Behali, Boroi, Dufflaghur, Halem, Nya Gogra
Jorhat	Hunwal
Mangaldai	Attareekhat, Bhooteachang, Borengajuli, Corramore, Dimakusi, Paneery
Margherita	Bogapani, Dehing, Dirok, Margherita, Namdang
Moran	Attabarrie, Dirai, Lepetkatta, Moran, Rajmai, Sepon
Thakurbari	Addabarie, Harchurah, Nilpur, Phulbari, Rupajuli, Tarajulie, Tezpore and Gogra
Tingri	Dirial, Itakhooli, Keyhung, Mahakali
West Bengal
Dooars	Bhatpara, Central Dooars, Chuapara, Jainti/Chuniajhora, Mathura/ Jaibirpara

DIRECTORS

Name :	Mr. Brij Mohan Khaitan
Designation :	Chairman Director
Qualification:	B.Com
Other Directorship :	· Williamson Magor and Company Limited · Everyday Industries India Limited · CESC Limited · Jay Shree Tea and Industries India Limited ( Remuneration Committee, Chairman) · Philips Carbon Black Limited · Babcock Borsing Limited
Name :	Mr. Deepak Khaitan
Designation :	Vice Chairman
Name :	Mr. Aditya Khaitan
Designation :	Managing Director
Qualification :	B.Com
Other Directorship :	· Willamson Magor and Company Limited · Everyday Industries India Limited · Williamson Financial Services Limited · Babcock Borsig Limited · Woodside Park Limited · International Development and Engineering Association Limited · D1 Williamson Magor Bio Fuel Limited · Prana Lifestyle Private Limited
Name :	Mr. Raghavachari Srinivasan
Designation :	Director
Name :	Mr. Bharat Bajoria
Designation :	Director
Name :	Mr. Ranabir Sen
Designation :	Director
Name :	Mr. Utsav Parekh
Designation :	Director
Qualification:	B.Com
Other Directorship :	· The Sirpur Paper Mills Limited · MCNally Bharat Engineering Company Limited · Xpro India Limited · Moving Pictures Company ( India) Limited · Lend Lease Company India Limited · SIMCO Telecommunication (South Asia) Limited · Salveo Life Science Limited · Transceivers India Limited · Cable Cooperation of India Limited · SMIFS capital Markets Limited · Bengal Aerotropolis Projects Limited
Name :	Mr. Srikandath Narayan Menon
Designation :	Director
Name :	Mr. Azam Monem
Designation :	Director
Qualification :	B. Com
Other Directorship:	Committee Membership
Name :	Mr. Rajeev Takru
Designation :	Director
Qualification:	B.A
Name :	Mr. Kamal Kishore Baheti
Designation :	Director
Qualification :	B.A, FCA. ACS, GRAD, CWA
Other Directorship:	· Dufflaghur Investments Limited · Majerhat Estate and Developers Limited · Williamson Financial Services Limited · Woodside Parks Limited · Metals Centre Limited · ABC Tea Workers Welfare Services · Ichamati Investments Private Limited · United Machine Company Limited · Noble House Trading and Investments Limited · Bonus Trading and Investments Private Limited · Queens Park Property Company Limited · Seajuli Developers and Finance Limited
Name :	Ramni Nirula
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Amitabha Guha Sarkar
Designation :	Company Secretary and Compliance Officer.
Audit Committee of the Board
Name :	Mr. Rahavachari Srinivasan Mr. Bharat Bajoria Mr. Ranbir SEn Mr. Srikandath Narayan Menon
Shareholders/ Investors’ Grievance Committee of the Board:
Name :	Mr. Ranbir Sen Mr. Bharat Bajoria Mr. Utsav Parekh
Remuneration Committee of the Board :
Name :	Mr. Bharat Bajoria Mr. Raghavchari Srinivasaan Mr. Ranbir Sen
Name :	Khaitan and Company
Designation :	Solicitors

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2012

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	97578	0.09
Bodies Corporate	22866507	20.89
Sub Total
(2) Foreign
Bodies Corporate	27,067,500	24.73
Sub Total	27,067,500	24.73
Total shareholding of Promoter and Promoter Group (A)	50032585	45.71
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	2631644	2.40
Financial Institutions / Banks	57563	0.05
Central Government / State Government(s)	112	0.00
Insurance Companies	3257017	2.98
Foreign Institutional Investors	36013232	32.90
Sub Total	41959568	38.33
(2) Non-Institutions
Bodies Corporate	5810319	5.31
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	9898980	9.04
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	902429	0.82
Any Others (Specify)
Non Resident Indians	336177	0.31
Foreign Nationals	90470	0.08
Foreign Corporate Bodies	136350	0.12
Clearing Members	277150	0.25
Trusts	11707	0.01
Sub Total	17463582	15.95
Total Public shareholding (B)	59423150	54.29
Total (A)+(B)	109,455,735	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)	109,455,735	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Tea

Products :

Product Description	ITC Code
Indian Black Tea	090240.02

PRODUCTION STATUS (AS ON 31.03.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity	Actual Production
Tea (In Bulk)	Tonne	NA	91850.00	74871.72

GENERAL INFORMATION

No. of Employees :

80000 (Approximately)

Bankers :

· Allahabad Bank

· Axis Bank Limited

· HDFC Bank Limited

· ICICI Bank Limited

· State Bank of India

· State Bank of Bikaner and Jaipur

· UCO Bank

· United Bank of India

Facilities :

Rs. In Millions

Secured Loans	As on 31.03.2012	As on 31.03.2011
LONG-TERM BORROWINGS
Term Loans from a Bank
ICICI Bank Limited	410.000	640.000
(a) Nature of Security
The above Term Loans are secured / to be secured by first pari-passu charge on WM - Brand, first pari passu mortgage of certain tea estates and subservient mortgage of certain tea estates; and additionally secured by pledge of certain investments
(b) Terms of Repayment
(i) Tranches of above Term Loans are repayable in :
Twenty four (31.03.2011 - Twenty four) equal monthly instalments	50.000	50.000
Nine (31.03.2011 - Twenty one) equal monthly instalments	60.000	140.000
Twenty four (31.03.2011 - Thirty six) equal monthly instalments	300.00	45.000
	410.000	640.000
(ii) Interest is payable on monthly basis at base rate plus 2.50% p.a. on above Term Loans
SHORT-TERM BORROWINGS
Secured Loans repayable on demand from Banks
Cash Credit, Packing Credit and Demand Loans	1040.123	681.853
a) Nature of Security
The above loans are secured/to be secured by equitable first mortgage by way of deposit of title deeds of immovable properties of certain tea estates ranking pari passu with others; and hypothecation of tea crop, movable properties and book-debts present and future of the Company
Total	1450.123	1321.853

Banking Relations :	--
Auditors :
Name :	Price Waterhouse Chartered Accountant
Address :	Plot No.Y-14, Block- EP, Sector-V, Salt Lake Electronic Complex, Bidhan Nagar, Kolkata-700091, West Bengal, India
Holding Company :	Borelli Tea Holdings Limited ( BTHL)
Subsidiaries :	· Borelli Tea Holdings Limited (BTHL) · Phu Ben Tea Company Limited (PBTCL) · Rwenzori Tea Investments Limited (RTI) · Mcleod Russel Uganda Limited (MRUL) Formed Known as James finally (Uganda) Limited (JFUL) · Olyana Holdings LLC (Olyana)
Associates :	· D1 Williamson Magor Bio Fuel Limited (D1) · Babcock Borsig Limited (BBL)

CAPITAL STRUCTURE

(AS ON 31.03.2012)

Authorised Capital :

No. of Shares	Type	Value	Amount
120000000	Equity Shares	Rs.5/- each	Rs.600.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
109455735	Equity Shares	Rs.5/- each	Rs.547.279 Million

Note:

Rights, preferences and restrictions attached to Shares

(a) The Company has only one class of shares referred to as Equity Shares having a par value of Rs. 5/- per share. Each shareholder is eligible for one vote per share held. The Dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(b) Details of Equity Shares held by shareholders holding more than 5 per cent of the Equity Shares in the Company

Names of Shareholders	Number of Number of Equity Shares Equity Shares 31st March 2012
Kamal Baheti (Trustee - Borelli Tea Holdings Limited, U.K.)	27067500 (24.73%)
Williamson Magor and Company Limited	11649946 (10.64%)
Williamson Financial Services Limited	5898725 (5.39%)
CLSA (Mauritius) Limited	5495459 (5.02%)

Names of Shareholders	31.03.2012
(C) Aggregate number of Equity Shares alloted as fully paid up pursuant to Scheme of Arrangement / Schemes of Amalgamation without payment being received in cash (during five years immediately preceding the Balance Sheet date)	1118028

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		547.279	547.279	547.279
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		16066.750	14666.208	13023.266
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		16614.029	15213.487	13570.545
LOAN FUNDS
1] Secured Loans		1450.123	1321.853	2799.085
2] Unsecured Loans		0.000	0.000	0.000
TOTAL BORROWING		1450.123	1321.853	2799.085
DEFERRED TAX LIABILITIES		647.006	635.125	575.125
TOTAL		18711.158	17170.465	16944.755
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		15061.472	14529.441	14440.167
Capital work-in-progress		308.360	148.128	119.977
INVESTMENT		2451.719	2603.600	2594.605
DEFERREX TAX ASSETS		0.000	0.000	0.000
OTHER NON CURRENT ASSETS		249.696	249.601	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	749.985	704.032	529.438
	Sundry Debtors	146.516	109.964	162.926
	Cash & Bank Balances	33.111	126.923	219.203
	Other Current Assets	395.863	240.182	510.821
	Loans & Advances	2837.863	2062.602	1327.800
Total Current Assets		4163.338	3243.703	2750.188
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	693.067	598.205	1052.448
	Other Current Liabilities	954.566	1277.114	74.870
	Provisions	1875.794	1728.689	1832.864
Total Current Liabilities		3523.427	3604.008	2960.182
Net Current Assets		639.911	(360.305)	(209.994)
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		18711.158	17170.465	16944.755

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	12378.308	11011.100	10768.209
		Other Income	427.135	336.722	346.943
		Closing Stock	0.000	0.000	178.930
		TOTAL (A)	12805.443	11347.822	11294.082
Less	EXPENSES
		Cost of Materials Consumed	1125.654	886.103
		Employee Benefits Expense	4262.148	3801.250
		Other Expenses	3848.395	3346.576
		Exceptional Items	138.197	0.000
		Changes in Inventories of Finished Goods	97.921	(115.331)
		TOTAL (B)	9472.315	7918.598	7660.950
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		3333.128	3429.224	3633.132
Less	FINANCIAL EXPENSES (D)		472.444	338.083	252.680
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		2860.684	3091.141	3380.452
Less/ Add	DEPRECIATION/ AMORTISATION (F)		294.014	275.418	271.172
	PROFIT BEFORE TAX (E-F) (G)		2566.670	2815.723	3109.280
Less	TAX (H)		363.916	493.434	705.989
	PROFIT AFTER TAX (G-H) (I)		2202.754	2322.289	2403.291
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1009.881	923.653	430.902
Less	APPROPRIATIONS
		Transfer to General Reserve	1431.300	1600.000	1400.000
		Proposed Dividend	656.700	547.279	437.823
		Tax on Dividend	106.500	88.782	72.717
	BALANCE CARRIED TO THE B/S		1018.135	1009.881	923.653
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings		3256.414	4207.515
		Interests Income		16.570	2.632
		Other Earnings		6.136	0.000
	TOTAL EARNINGS		4026.338	3279.12	4210.147
	IMPORTS
		Stores & Spares	38.498	49.325	42.656
		Capital Goods	33.189	9.265	1.368
	TOTAL IMPORTS		71.687	58.59	44.024
	Earnings Per Share (Rs.)		20.12	21.22	21.96

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2012
Type	1^st Quarter
Net Sales	1456.800
Total Expenditure	1228.100
PBIDT (Excl OI)	228.700
Other Income	126.100
Operating Profit	354.800
Interest	85.600
Exceptional Items	0.000
PBDT	269.200
Depreciation	76.100
Profit Before Tax	193.100
Tax	0.000
Provisions and contingencies	0.000
Profit After Tax	193.100
Extraordinary Items	0.000
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	193.100

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	17.20	20.46	21.28
Net Profit Margin (PBT/Sales)	(%)	20.74	2.57	28.87
Return on Total Assets (PBT/Total Assets}	(%)	13.35	15.84	18.09
Return on Investment (ROI) (PBT/Networth)		0.15	0.19	0.23
Debt Equity Ratio (Total Liability/Networth)		0.30	0.33	0.42
Current Ratio (Current Asset/Current Liability)		1.18	0.33	0.42

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report [Yes/No]
Year of Establishment	Yes
Locality of the Firm	Yes
Constitution of the firm	Yes
Premises details	No
Type of Business	Yes
Line of Business	Yes
Promoters background	Yes
No. of Employees	Yes
Name of Person Contacted	No
Designation of contact person	No
Turnover of firm for last three years	Yes
Profitability for last three years	Yes
Reasons for variation <> 20%	-
Estimation for coming financial year	No
Capital the business	Yes
Details of sister concerns	Yes
Major Suppliers	No
Major Customers	No
Payment Terms	Yes
Export / Import Details [If Applicable]	Yes
Market Information	-
Litigations that the firm / promoter involved in	-
Banking Details	Yes
Banking Facility Details	Yes
Conduct of the banking account	-
Buyer visit details	-
Financials, if provided	Yes
Incorporation details, if applicable	Yes
Last accounts filed at ROC	Yes
Major Shareholders, if applicable	Yes
Date of Birth of Proprietor/Partner/Director, if available	Yes
PAN of Proprietor/Partner/Director, if available	No
Voter ID No of Proprietor/Partner/Director, if available	No
External Agency Rating, if available	No

REVIEW OF PERFORMANCE

During the year the Company has earned highest ever sales revenue of Rs.12028.900 Millions as against Rs.10689.500 Millions earned in the previous year. However, the profit after tax was lower by 5.15% primarily on account of significant increase in cost of materials, employee expenses and provision for diminution in value of investment, an exceptional item.

REVIEW OF OPERATIONS

During the financial year, the Company produced 793 lakh kgs tea as compared to 749 lakh kgs in the previous year. Favourable weather conditions spurred growth between April and October 2011. From November 2011 onwards the weather in the North Bank of Assam and Dooars became dry leading to an early closure of the season and a reduced harvest in March 2012.

The Uprooting and Replanting activity of the Company has further improved. The percentage of tea under fifty years is approximately 75% of the total area. This has contributed to an increase in an average yield of estates, which is higher than the Industry average. A good standard of nurseries with the required Clonal Blend are being maintained.

The Company’s focus has always been to produce quality teas, which commanded a premium both in the domestic and international market. As part of an upgradation and modernisation programme of factories withering capacity was increased on four estates. Thirty four Rotorvane feeders, fifteen Rotorvanes, fourteen CTC machines, twenty CFM’s, twelve VFBD’s, four coal stoves, six boilers, sixteen milling machines, five lathe machines were installed in various factories. In some factories extension of building was undertaken to accommodate additional sorting machinery. To improve and monitor quality, six Colour Sorters for Orthodox Sorting and six Sinar Moisture Meters were purchased.

To augment the standby generating capacity eight diesel generating sets and two gas generating sets were installed. Six new transformers were also installed. For undertaking river embankment work bordering tea estates and deepening outlet drains four new JCB Excavators were purchased. To facilitate weighing of leaf, fertilisers, ration among others six new weighbridges were installed. 44 new plucking machines are being put on trial. With drought prevalent annually, additional irrigation equipment was augmented on 14 estates.Transport fleet was upgraded on estates with the deployment of 58 new tractors.

The Company now has 45 Hazard Analysis Critical Control Point (HACCP) certified factories. The Company also has 4 estates certified as ‘Fairtrade’ and 14 estates certified as “Rainforest Alliance.” The Nilpur Blending Unit is a HACCP Certified unit.

The average price realisation for the Company’s tea for the year was Rs.150/- which is higher than the North Indian auction average of Rs.117/-. The Company saw a total export quantum of 236 lakh kgs. in 2011-12 with an overall export turnover of over Rs.4013.400 Millions. Favourable feedback was received from the buyers both in terms of quality and deliveries

SUBSIDIARY COMPANIES AND CONSOLIDATED FINANCIAL STATEMENTS

The Company has one wholly owned subsidiary namely, Borelli Tea Holdings Limited, U.K. (Borelli) and six step

down subsidiaries. Borelli is inter alia engaged in the business of investing funds in various Companies engaged in tea production, marketing and investment activities. As on 31st March 2012 Borelli had the following subsidiaries in different countries:-

(i) Phu Ben Tea Company Limited, Vietnam – controlling stake of Borelli being 100%

(ii) Rwenzori Tea Investments Limited (‘Rwenzori’), Uganda – controlling stake of Borelli being 100%

(iii) McLeod Russel Uganda Limited – 100% subsidiary of Rwenzori

(iv) Olyana Tea Holdings LLC (‘Olyana’), USA – controlling stake of Borelli being 95%

(v) Gisovu Tea Company Limited, Rwanda – controlling stake of Borelli being 60%

(vi) McLeod Russel Middle East DMCC – controlling stake of Borelli being 100%

BORELLI TEA HOLDINGS LIMITED

Borelli Tea Holdings Limited has invested in its Subsidiaries in Vietnam, Uganda, Rwanda, USA and Dubai. During the year ended 31st March 2012, Borelli earned a net profit equivalent to Indian Rs.293.700 Millions and has recommended payment of dividend at the rate of 200% on its equity capital held by the Company.

PHU BEN TEA COMPANY LIMITED

Phu Ben Tea Company Limited (Phu Ben) during the financial year of the Company ended 31st December 2011 earned a net profit equivalent to Indian Rs.1.500 Millions on its sales turnover equivalent to Rs.436.600 Millions.

Phu Ben achieved a total production of 54 lakh kgs. Sales for the year was 49 lakh kgs. which was sold at an average price of USD 1.74/kg.

Yield from own plantation was pegged at 2798 Kgs/Made Tea/Hectare which was a record. Implementation of improved field and cultural practices and favourable weather conditions attributed for this improvement.

Capacity expansion by way of additional trough at Van Linh and systemisation of operational procedures at all the units were reinforced.

The Company continues to lay stress on quality control in both field and factory and adheres to GAP for plantation

operational developments, along with IPM measures for Pest control.

The plantations of the Company were “Rainforest Alliance Certified” in 2011.

The Company employs 3,920 farmers, workers and staff and maintained good Industrial relations.

Phu Ben is considered to be the top most Tea Company in Vietnam and is called upon by the Provincial and Central Government authorities to impart training and partake in community development programmes along with the Local Authorities. The Company was involved by way of providing technical advice to a French Government aided AFD project to develop the fields of the local farmers.

Phu Ben was awarded for Quality and Best GMP and GAP practices by the Provincial Government at the National Tea Convention in February 2011 held at Phu Tho Province. Phu Ben was also the winner of the “Golden Leaf Award” for best Black Tea in Vietnam at the International Tea Convention held at Thai Ngyuen Province in November, 2011. In addition, awards and certificates were also received from both Central Government agencies and Provincial Authorities for Environmental Protection, contribution to the development of the Tea Industry in Vietnam and Phu Benwas cited as a Model Business Venture.

MCLEOD RUSSEL UGANDA LIMITED

During the financial year of the Company ended 31^st December 2011 McLeod Russel Uganda Limited (MRUL) earned a post tax profit equivalent to Indian Rs.794.900 Millions as against Rs.250.400 Millions in the year 2010. This was achieved due to higher price realisation from USD 1.84 per kg. in 2010 to USD 1.95 per kg. in 2011, an increase of 11 cents per kg. During the year the Company also received Income Tax exemption for a period of ten years with effect from 2007.

Production in 2011 was lower at 163 lakh kgs. Compared to 168 lakh kgs. in 2010, due to insufficient rainfall at the beginning of the year. However, the increase in prices compensated for the reduction in production. The Company declared dividend equivalent to Indian Rs.230.100 Millions during the year as against Rs.196.700 Millions in 2010.

Weather conditions were unfavorable at the commencement of the year with rainfall receding by December 2010 and becoming active only in end March 2011. As a consequence 1st quarter factory crop was in deficit against previous year by 38%. However, with resumption followed by normal rainfall levels, the Company was able to recoup and the year finished with factory deficit of 4% only against an all-time record in 2010.

Extension Tea planting was strengthened. This activity was carried out early in the year and minimal vacancy was recorded 12 months after planting. Eucalyptus extension was carried out. A Vegetative Propagation Unit for fuel wood trees was established and 4 new clones were generated at commercial level. Single Operator Harvesters were deployed at all locations and area under mechanical harvesting registered an increase to 56%. All fields were harvested on shorter rounds and no crop control was resorted to.

Factory expansion to 3 lines and increase of Withering capacity was completed at Mwenge and Bugambe. The renovated factories now have capacity to complete manufacture of peak season volumes within 16 hours. Private sales quantum increased and new markets were accessed in the Middle East. The Company achieved ISO 22000 FSMS certification and maintained RA standards.

Construction of resident workers housing (6 units) and infrastructure was completed on schedule and to high standards. A water supply project was commenced at Mwenge to provide filtered potable water for all residents. Under the Company’s commitment to CSR and community upliftment, 2 primary school blocks were constructed and handed over to local Government authority.

The Company’s commitment to, and success with, USAID sponsored Health in the Work-Place Program was acknowledged by a visit of Ms. Lois Quam, Executive Director, US Global Health Initiative accompanied by H. E. Jerry Lanier the US Ambassador to Uganda. MRUL remained the country’s largest tea producer and exporter. Presidential, Parliamentary and Local Government election took place nation-wide in February/March 2011, during which time estates remained calm and orderly. Good industrial relations were maintained and strengthened by the Company’s initiatives in the fields of sport and culture.

GISOVU TEA COMPANY LIMITED

The Management of Gisovu Tea Company Limited (Gisovu) Rwanda was taken over by Borelli on 24^th aqsition of 60% shares of Gisovu from the Government of Rwanda were completed. The Company earned a post tax profit equivalent to Indian Rs.107.400 Millions from the date of acquisition till end of the year.

Improvement of cultivation practice coupled with favorable weather, Gisovu achieved record production of 19 lakh kgs of made tea. An increase of 15.09% compared with the previous highest crop ever recorded in Gisovu.

Gisovu continued to manufacture teas of the highest standard in East Africa and realised the highest African average sales price of USD 3.39 against the previous year’s price of USD 3.16. Rwandan average (auction) for the year of operation was USD 2.71. The Company was acclaimed and awarded the prize for the best sale samples in East Africa, an award presented by President Kibaki of Kenya at the East African Tea Conference held in Mombasa.

The Factory expansion project was sanctioned in December. Machines have been ordered and will reach the Estate shortly.

Gisovu was ‘Rainforest Alliance’ certified during the year. It is already IS0 9001 certified.

Gisovu has endeavored to maintain CSR activities in its area of operation. Removal of child labour was accomplished and these children are now either in vocational training or schools supported by the Company. The Company has also been instrumental in arranging educational material in the local sector schools and has distributed these free of cost. Arrangements have also been made for teaching material for vocational courses like Carpentry and Masonry kits.

Good Industrial relations with the local Cooperatives were maintained.

MCLEOD RUSSEL MIDDLE EAST DMCC

McLeod Russel Middle East DMCC (MRME) was incorporated on 9th May 2011 in Dubai, UAE as a wholly owned subsidiary of Borelli. The principal business of the Company is trading in tea. During the period ended 31^st March 2012, the Company incurred a net loss equivalent to Indian Rs.9.900 Millions, being the first year of its operations. The Company commenced its trading business from the second half of the financial year. MRME is expected to perform better during the financial year 2012-13.

D1 WILLIAMSON MAGOR BIO FUEL LIMITED

D1 Williamson Magor Bio Fuel Limited (D1WML) was incorporated under a 50:50 joint venture agreement between Williamson Magor and Company Limited (WML) and D1 Oils Trading Limited UK to facilitate development of Jatropha Plantation under contract farming arrangements for production of bio diesel from Jatropha oilseeds. Being an associate of WML the Company presently holds 34.30% of the equity capital of D1WML.

The plantation developed by the Company under contract farming arrangements has been undergoing through initial gestation period at various levels of maturity. The farmers in North East are finding it difficult to maintain the plantation with excessive weed growth. In view of this the Company has scaled down the level of activities in North East and abandoned the plantation in Tripura. The plantation in Jharkhand, though has delayed growth is gradually becoming productive and there has been notable increase in oilseed harvest. The Company has focused its operation in Jharkhand. The longer gestation period of Jatropha plantation and the poor yield as compared to initial indication has been a global phenomenon for which all companies are adversely affected.

In view of this the Company has decided to process Jatropha Oilseed on third party installation and defer the investment in manufacturing facilities until the volume increases for commercial processing. Accordingly, the Company has surrendered the land taken on lease from Assam Industrial Development Corporation, for factory in Industrial Growth Centre, Balipara, Assam. The Company has reduced its overhead cost to the present scale of operation to manage the plantation and the working capital with the fund available in the Company

MANAGEMENTDISCUSSION AND ANALYSIS

Industry Structure and Development

India is the largest black tea producer in the world, producing around approximately 988 million Kgs during calendar year 2011 representing 38% of the global black tea production. Black tea production by other main tea producers during 2011 was Kenya (377 million kgs), Sri Lanka (328 million kgs), other African countries (168 million kgs), Vietnam (145 million kgs), Indonesia (57 million Kgs) and Bangladesh (59 million kgs).

Kenya and other African countries had dry weather conditions upto March 2011 thereby, lost around 22 million kgs of crop as compared to 2010. India however, gained 21 million kgs of crop during 2011 as compared to the previous year due to ideal weather condition upto October 2011. Strong consumption growth, low inventory and normal production has helped in maintaining the prices in domestic market during the year. Prices in global markets were positive to stable due to lower production in Kenya. Cost in India has gone up by Rs.8/- on account of revision in wages in Assam and increase in prices of power and fuel.

Outlook

Dry weather condition across all black tea producing countries has affected the production during the 1^st Quarter of calendar year 2012. Tea production in these countries is estimated to be lower by 35 million kgs upto March. Production in India during calendar year 2012 is expected to be lower as compared to previous year due to loss of crop of 12 million kgs in the 1st Quarter. Significantly lower inventory in India, production shortfall and strong consumption growth should have positive impact on prices during 2012-13. Tea prices in India are currently ruling higher by Rs.30/- per kg as compared to last year. Increase in wages, normal increase in inputs and loss of crop during March and April will have its impact on the cost during the current Financial Year

Company’s Philosophy

The Company’s philosophy on Corporate Governance is aimed at efficient conduct of its operations and in meeting its obligations towards various stakeholders such as Customers, Vendors, Employees, Shareholders and Financiers and to the Society at large. The Company is in the business of cultivation and production of Tea and is one of the major producers of Tea in the world. The Company endeavours to produce quality Tea that consistently commands respect, trust and loyalty throughout the world by way of sustained efforts, research and development in plantation and adoption of latest technology. The Company strives for successful management of contingencies like drought and flood. While it is the endeavour of the Company to continue to produce Tea of premium quality to the satisfaction of its Customers worldwide, it also gives due importance to its obligations to the large workforce that it employs on the Tea Estates. The Company runs a business that has a human face and values the environment, people, products, plantation practices, customers and shareholders. The Company believes in achieving its goals, which result in enhancement of Shareholders’ value through transparency, professionalism and accountability and nurture these core values in all aspects of its operations.

CONTINGENT LIABILITY

(Rs. In Millions )

Particular	31.03.2012	31.03.2011
Sales Tax	2.637	2.637
Electricity Dues	2.927	3.247
Assam Pollution Control Board	0.741	0.741
Provident Fund	6.843	6.843
Income Tax	24.765	7.949
Service Tax	7.548	7.548
Others	0.086	0.495

(b) Guarantees given on behalf of a subsidiary - Rs. 1144.575 Millions (31st March 2011 - Rs. 1174.546 Millions); Year end utilisation Rs. 708.993 Millions (31st March 2011 – Rs. 793.819 Millions).

(c) Bank Guarantees Rs. 10.294 Millions (31st March 2011 - Rs. 8.328 Millions)

(d) Bills Discounted – Rs. 101.445 Millions (31st March 2011– Rs. 244.565 Millions)

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30 JUNE 2012

Rs.in Millions

Particulars		30.06.2012
Net Sales/ Income from Operations		1434.500
1. (b) Other Operating Income		22.300
Total Income From operations		1456.800
2. Expenditure
a. Cost of Raw Materials consumed		554.500
b. Changes in inventories of finished goods , work in progress and stock in trade		(1569.100)
c. Employee benefit expenses		1185.500
d. Power and fuel		340.100
e. Consumption of Stores and Spares		229.900
f. Freight, Shipping and Selling Expenses		91.100
g. Deprecation and Amortization		76.100
h. Other Expenditure		396.100
Total Expenditure		1304.200
3. Profit from Operations before Other Income, Interest and Exceptional Items (1-2)		152.600
4. Other Income		126.100
5. Profit before Interest and Tax		278.700
6. Interest		85.600
7. Profit from Ordinary Activities before Tax and exceptional items		193.100
8. Exceptional items		-
9. Profit from Ordinary Activities before Tax but before exceptional items		193.100
10. Tax Expenses		-
11. Net profit/(loss) for the period		193.100
12. Paid-up Equity Share Capital (face value Rs.2 per share)		547.300
13. Reserves excluding revaluation reserve as per balance sheet of previous accounting year		-
14. Earning Per Share
a. Basic and b. Diluted		1.76
15. Public shareholding
- No. of shares		59423150
- % of holding (to total shareholding)		54.29
Promoters And Promoter Group Shareholding a) Pledged/ Encumbered
-Number of Shares		5864670
-% of Shares (As a % of the total Shareholding of Promoter and Promoter Group)		11.72
-% of Shares (as a % of the total share capital of the Company)		5.36
b) Non Encumbered
- Number of Shares		44167915
-% of Shares (As a % of the total Shareholding of Promoter and Promoter Group)		88.28
-% of Shares (as a % of the total share capital of the Company)		40.35am)m b
INVESTOR COMPLAINTS	30.03.2012
Pending at the beginning of the quarter	Nil
Received during the quarter	2
Disposed if during the quarter	2
Remaining unresolved the end of the quarter	Nil

Note:

· The company is primarily engaged in the business of cultivation, manufacture and sales of tea an is managed organisationally as a single unit. Accordingly

·Geographical (Secondary) Segment:

The geographical Segments have been identified as follows: Sales revenue by geographical market:

	Quarter ended			Financial year ended 31st March 2012
	30.06.2012	31.03.2012	30.06.2011
India	1286.300	1868.900	1187.600	8022.700
Out Side India	148.200	656.600	265.000	4013.500
	1434.500	2525.500	1462.600	12036.200

Period-end assets outside India as on 30th June, 2012 - Rs. 19.900 millions (30th June 2011 - Rs. 94.200 millions and 31st March 2012 - Rs. 2.200 millions).

·As the Company is engaged in business of cultivation, manufacture and sale of tea (single business segment), which is seasonal in character, figures for the quarter ended 30th June 2012 should not be construed as representative of likely result for year ending 31st March 2013.

· Cost of materials consumed represents only Green Leaf purchased from third party

· Stock of bulk tea as on 30th June 2012 has been valued at lower of estimated cost of production (based on estimated production and expenditure to r the financial year) and net realisable value. Production of tea not being uniform throughout the year, stock-valuation will be unrealistic if it is based on actual production and expenditure up to 30th June 2012. The effect of any variance from actual cost applicable to total valuation is not readily ascertainable. The aforesaid method of stock valuation Is consistent with the accounting policy of the Company for the purpose of determining quarterly results.

·As the ultimate income tax liability will depend on results for the year ending 31st March, 2013 snd in view of the seasonal nature of tea business, the position with regard to provision for Current Tax and also Deferred Tax will be determined at end of the year.

· The figures for the quarter ended 31st March, 2012 are the balancing figures between the audited figures in respect of the full financial year ended 31st March, 2012 and the unaudited published year-to-date figures up to third quarter ended 31st December, 2011.

·Figures for the previous period have been regrouped / rearranged, wherever necessary.

·The above results for the quarter ended 30th June 2012 have been reviewed by the Audit Committee and-approved by the Board of Directors of the Company at their meeting held on 27th July 2012, and these have been subjected to a limited review by the Statutory Auditors of the Company and their observations have been dealt with in Note Nos. 4 and 5 above which are self-explanatory

FIXED ASSETS:

· Trade Mark

· Goodwill

· Estate and Development

· Land- Freehold

· Buildings

· Plant and Machinery

· Motor and Other Vehicles

· Furniture and Fittings

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 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.53.29
UK Pound	1	Rs.86.44
Euro	1	Rs.68.95

INFORMATION DETAILS

Report Prepared by :

BYI

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	6
--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		65

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.