GICS Industry: Food products l Sub Industry : Packaged Foods & Meats l Website : www.bannari.

com

Bannari Amman Sugars Ltd.

Key Stock Indicators
NSE Ticker: Bloomberg Ticker: Face value / Share: Div. Yield (%): BANARISUG BNRI: IN 10.0 1.2 CMP (as on 07 Jan 2011Rs/share): 52-week range up to 07 Jan 2011 (Rs) (H/L): Market Cap as on 07 Jan 2011 (Rs mn): Enterprise Value as on 07 Jan 2011 (Rs mn): Div. Yield (%): 0.0 834.1 1220.65/804.0 9,542 11,669 Shares outstanding (mn): Free Float (%): Average daily volumes (12 months): Beta (2 year): 11.4 45.3 1,773 0.7

Bannari Amman Sugars Limited (BASL), a flagship company of Bannari Amman group (BAG) was incorporated in 1983 with an installed capacity of 1,250 tonnes of sugarcane crushed per day (TCD) at its first sugar unit. The company today has 4 sugar units with a total capacity of 19,000 TCD. Its units are located in Karnataka and Tamil Nadu (2 each).

Key Financial Indicators

Revenue (Rs mn) EBITDA margins (%) PAT (Rs mn) PAT margins(%) Gearing (x) EPS (Rs/share) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x) n.m.: Not meaningful Mar-08 5,392.3 14.2 423.4 7.9 0.8 37.0 21.5 2.0 6.3 9.8 15.6 Mar-09 7,128.9 24.9 1,197.8 16.8 0.4 104.7 6.4 1.4 16.8 23.9 5.7 Mar-10 8,881.3 26.8 1,436.9 16.2 0.3 125.6 6.6 1.4 22.2 23.2 4.9

KEY HIGHLIGHTS
Strong player in south BASL is part of the Tamil Nadu-based Bannari Amman group, one of the largest business conglomerates in southern India. The company has four sugar units 2 in Tamil Nadu and 2 in Karnataka. As on March 31, 2010, BASLs sugar factories had a combined cane capacity of 19,000 TCD. The sugar manufacturing units crushed 1.45 million tonnes of cane in FY10, which contributed to 67% of total revenue. Diversified revenue streams BASL manufactures a wide range of products, which diversifies its revenue stream. It manufactures sugar, granite and alcohol, and also generates power. The sugar segment comprises ~74% of Bannaris consolidated sales. The granite division accounted for ~5% of BASLs turnover. The distillery or alcohol segment accounts for ~11% of revenues, manufacturing Indian-made foreign liquors and other alcohol products. The company also generates power, which contributed ~9% to revenues in FY10.

Shareholding (As on September 30, 2010)

FII 0% Others 45%

KEY RISKS

DII 0%

Climatic conditions Government regulations

Stock Performances vis--vis market

Returns (%) YTD BANARISUG NIFTY
Note: 1) YTD returns are since Apr 01, 2010 to Jan 07, 2011. 2) 1-m, 3-m and 12-m returns are up to Jan 07, 2011.

Promoter 55%

1-m 0 -1

3-m -6 -4

12-m -35 12
(index) 140 120 100 80 60 40 20 0 Nov-10 Apr-10 Mar-10 May-10 Dec-10 NIFTY Aug-10 Feb-10 Sep-10 Oct-10 Jun-10 Jan-10 Jul-10 30 20 10 0 ('000) 60 50 40

-9 12

Indexed price chart

Volumes (RHS)

BANARISUG

CRISIL COMPANY REPORT | 1

Bannari Amman Sugars Ltd.

BACKGROUND
BASL was incorporated in 1983; it started commercial production in the year 1986 with an initial capacity of 1,250 TCD at Sathyamangalam in Erode district, Tamil Nadu. As on March 31, 2010, the company has a total capacity of 19,000 TCD. The companys other sugar units are at Nanjangud and Kunthur in Karnataka and at Kolundampattu in Tiruvannamalai district in Tamil Nadu. The company also has distillery units, with a total capacity of 127.5 kilolitres per day, situated in Tamil Nadu and Karnataka. Through these distillery units, the company manufactures extra neutral alcohol (ENA), ethanol or absolute alcohol, depending on the market demand. BASL has also developed cogeneration plants at Karnataka and Tamil Nadu, having combined power generation capacity of 84 MW. The company also has wind power generation capacity of 29 MW in Poolavadi and Gudimangalam near Coimbatore.

COMPETITIVE POSITION
Peer Comparison

Revenue (Rs mn) EBITDA ma rgins (%) PAT (Rs mn) PAT ma rgins (%) Gea ring (x) EPS (Rs /s ha re) PE (x) P/BV (x) RoCE (%) RoE (%) EV/EBITDA (x)
n.m: Not meaningful

Bannari Amman Bajaj Hindusthan Dollex Industries Sugars Ltd. Sugar & Inds. Ltd. Ltd. Mar-10 Mar-10 Mar-10 8,881.3 3,699.8 117.3 26.8 24.6 17.9 1,436.9 544.1 10.3 16.2 14.7 8.8 0.3 3.1 0.0 125.6 -6.1 0.1 6.6 n.m 180.1 1.4 1.0 1.3 22.2 n.m 3.1 23.2 16.3 2.6 4.9 14.5 12.4

Dwarikesh Sugar Inds. Ltd. Mar-10 4,711.9 26.8 250.8 5.3 3.3 -5.6 n.m 1.0 13.0 17.6 4.7

FINANCIAL PROFILE
Consistent growth in top-line; PAT increases due to buoyant sugar prices

Key Financial Indicators Units Revenue Rs million Per cent Rs million Per cent Per cent Per cent Per cent Times Per cent Per cent EBITDA margins PAT PAT margins Revenue growth EBITDA growth PAT growth Gearing RoCE RoE

Mar-08
5,392.3 14.2 423.4 7.9 -21.7 -49.1 -53.1 0.8 6.3 9.8

Mar-09
7,128.9 24.9 1,197.8 16.8 32.2 131.4 182.9 0.4 16.8 23.9

Mar-10
8,881.3 26.8 1,436.9 16.2 24.6 34.1 20.0 0.3 22.2 23.2

BASL registered a CAGR of ~28% in top-line from FY08 to FY10. Sales growth in sugar and other segments helped it register ~25% growth in revenue in FY10. Top-line increased to Rs 8.8 bn in FY10 from Rs 7.1 bn in FY09. PAT increased by 20% (year-on-year) to Rs 1.4 bn in FY10, as compared with Rs 1.1 bn in FY09, principally due to buoyant sugar prices.

INDUSTRY PROFILE
Sugar India is the world`s largest consumer of sugar and it is also among the world`s leading sugarcane and sugar producers. Sugar production in India is concentrated in six states namely, Maharashtra (30-35 per cent), Uttar Pradesh (30-35 per cent), Tamil Nadu (10 per cent), Karnataka (10 per cent), Gujarat (5 per cent) and Andhra Pradesh (4 per cent). The industry is fragmented, with close to 500 mills operating in the country. Being an agricultural commodity, the production of sugarcane the main input in the manufacture of sugar - is vulnerable to weather vagaries. The sugar industry is also highly regulated. The government controls the distribution of sugar in the open market, i.e. free sale of sugar, through a regulated release mechanism. The government controls sugarcane pricing through the Fair and Remunerative Price (F&RP) (earlier the statutory minimum price). The F&RP for sugarcane for SS 2010-11 has been pegged at at Rs 139.12 per quintal, linked to a recovery rate of 9.5 per cent. Players with integrated operations (distillery and co-generation) are better placed to tackle the cyclicality in the business, as the distillery and co-generation businesses provide a steady revenue stream throughout the cycle.

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Bannari Amman Sugars Ltd.

ANNUAL RESULTS
Income Statement (Rs million ) Net Sales Operating Income EBITDA EBITDA Margin Depreciation Interest Other Income PBT PAT PAT Margin No. of shares (Mn No.) Earnings per share (EPS) Cash flow (Rs million ) Pre-tax profit Total tax paid Depreciation Change in working capital Cash flow from operating activities Capital Expenditure Investments and others Balance sheet (Rs million ) Equity share capital Reserves and surplus Tangible net worth Deferred tax liablity:|asset| Long-term debt Short-term-debt Total debt Current liabilities Total provisions Total liabilities Gross block Net fixed assets Investments Current assets Receivables Inventories Cash Total assets Ratio Mar-08 373.7 -2.1 348.2 -1,179.0 -459.2 -822.0 -140.8 Mar-09 1,324.1 -80.5 340.8 225.2 1,809.6 -1,309.6 131.1 Mar-10 1,984.1 -309.2 383.4 745.0 2,803.3 -2,418.3 5.0 Revenue growth (%) EBITDA growth(%) PAT growth(%) EBITDA margins(%) Tax rate (%) PAT margins (%) Dividend payout (%) Dividend per share (Rs) BV (Rs) Return on Equity (%) Return on capital employed (%) Gearing (x) Interest coverage (x) Debt/EBITDA (x) Asset turnover (x) Current ratio (x) Gross current assets (days) Mar-08 -21.7 -49.1 -53.1 14.2 0.5 7.9 18.9 5.5 393.1 9.8 6.3 0.8 6.7 5.0 0.9 Mar-09 32.2 131.4 182.9 24.9 6.1 16.8 9.6 8.5 482.5 23.9 16.8 0.4 11.1 1.4 1.0 Mar-10 24.6 34.1 20.0 26.8 15.5 16.2 8.0 10.0 598.3 23.2 22.2 0.3 47.0 0.9 1.0 Mar-08 4,395.4 5,392.3 768.4 14.2 348.2 98.0 51.6 391.6 423.4 7.9 11.4 37.0 Mar-09 6,049.4 7,128.9 1,777.7 24.9 340.8 143.1 30.3 1,318.5 1,197.8 16.8 11.4 104.7 Mar-10 8,015.0 8,881.3 2,383.1 26.8 383.4 50.7 35.1 1,998.0 1,436.9 16.2 11.4 125.6 Mar-08 114.4 4,382.5 4,496.9 548.1 2,043.8 1,761.1 3,804.9 1,271.6 113.1 10,234.6 6,339.6 4,366.8 175.1 5,692.7 834.7 3,104.6 935.9 10,234.6 Mar-09 114.4 5,427.0 5,541.4 588.2 1,707.4 744.3 2,451.7 1,182.7 153.3 9,917.3 7,353.2 5,335.6 44.0 4,537.9 695.5 2,875.8 55.0 9,917.5 Mar-10 114.4 6,730.1 6,844.5 840.1 1,789.8 392.8 2,182.5 1,687.6 133.8 11,688.5 10,448.5 7,370.5 39.0 4,279.1 449.1 2,665.7 55.8 11,688.6

Cash flow from investing activities Equity raised/(repaid) Debt raised/(repaid) Dividend (incl. tax) Others (incl extraordinaries)

-962.8 19.0 1,953.1 -113.1 13.8

-1,178.5 0.0 -1,353.2 -153.3 -5.7

-2,413.3 0.0 -269.2 -133.8 13.9

Cash flow from financing activities Change in cash position Opening cash Closing cash
n.m : Not meaningful;

1,872.8 450.8 485.1 935.9

-1,512.2 -881.1 935.9 55.0

-389.1 0.9 55.0 55.8

1.9
371

2.2
219

1.9
163

QUARTERLY RESULTS
Profit and loss account (Rs million) No of Months Revenue EBITDA Interest Depreciation PBT PAT Sep-10 3 1,634.2 264.9 33.6 178.3 53.0 43.0 100.0 16.2 2.1 10.9 3.2 2.6 % of Rev Sep-09 3 2,144.9 663.9 10.2 83.6 570.2 420.9 100.0 31.0 0.5 3.9 26.6 19.6 % of Rev Jun-10 3 1,849.6 292.1 33.6 176.3 82.2 91.7 100.0 15.8 1.8 9.5 4.4 5.0 % of Rev Sep-10 6 3,483.8 557.0 67.2 354.6 135.2 134.7 100.0 16.0 1.9 10.2 3.9 3.9 % of Rev Sep-09 6 4,351.5 1,283.9 21.5 166.0 1,096.4 881.3 100.0 29.5 0.5 3.8 25.2 20.3 % of Rev

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Bannari Amman Sugars Ltd.

FOCUS CHARTS & TABLES
Rs mn 3,000 2,500 2,000 1,500 1,000 500 0 Dec-08 Dec-09 Sep-08 Sep-09 Mar-08 Mar-09 Mar-10 Sep-10 Jun-08 Jun-09 Jun-10

Quarterly sales & y-o-y growth

Per cent 250 200 150 100 50 0 -50 -100

Rs mn 700 600 500 400 300 200 100 0 -100 Jun-08 Mar-08

Quarterly PAT & y-o-y growth

Per cent 3,000 2,500 2,000 1,500 1,000 500 0 -500

Dec-08

Dec-09

Sep-08

Sep-09

Mar-09

Sales

Sales growth y-o-y (RHS)

Net Profit

Net profit growth y-o-y (RHS)

Rs/share 60 50 40 30 20 10 0 -10 Dec-08

EPS

Per cent 70 60 50 40 30 20 10 0 -10 Dec-07 Mar-08 Dec-09 Mar-10 Sep-10 Jun-10

Movement in operating and net margins

Dec-08

Dec-09

Sep-08

Sep-09

Mar-10

Sep-10 Mar-10 Sep-10 Jun-10

Jun-09

Jun-08

Sep-08

Mar-09

Sep-09

Jun-09

OPM

Mar-09

Jun-09

NPM

Shareholding Pattern (Per cent) Dec 2009 Mar 2010 Promoter 54.7 54.7 FII 0.2 0.2 DII 0.2 Others 44.9 45.1

Jun 2010 54.7 0.2 0.0 45.1

Sep 2010 54.7 0.2 0.1 45.0

Board of Directors Director Name Sa ngampal a ya m Veda na ya ga m Ba l a s ubra ma ni am (Dr.) Va l a s a reddi Venka ta Reddy (Mr.) Ba l a s ubra ma ni am Sa ra va na n (Mr.) Sa ngampal a ya m Veda na ya ga m Al a ga ppa n (Mr.) Sa ngampal a ya m Veda na ya ga m Arumuga m (Mr.) Era nga ttur Pa l a ni s a my Muthukuma r (Mr.) Al a thukomba i Ka ruppa Gounder Peruma l s a my (Mr.) Gunda n Tha tha Gowder (Mr.)

Designation Executi ve Chai rma n, Promoter-Di rector Non-Executi ve Vice Cha i rma n, NonExecuti ve Di rector Ma na gi ng Di rector Non-Executi ve Di rector Non-Executi ve Di rector Non-Executi ve Di rector Non-Executi ve Di rector Non-Executi ve Di rector

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CRISIL COMPANY REPORT | 4

Jun-10