MIRA INFORM REPORT

Report Date :

03.03.2007

IDENTIFICATION DETAILS

Name :	NIRMA LIMITED
Registered Office :	Nirma House, Ashram Road, Ahmedabad – 380 009, Gujarat
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	25.02.1980
Com. Reg. No.:	04-3670
CIN No.: [Company Identification No.]	L24240GJ1980PLC03670
TAN No.: [Tax Deduction & Collection Account No.]	AHMN00409D
PAN No.: [Permanent Account No.]	AAACN5350K
Legal Form :	Subject is a public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Engaged in manufacturing and selling of detergents, toilet soaps, glycerine, shampoo, distilled fatty acid, sulphuric acid, alfa olefin sulphonate, linear alkyl benzene.

RATING & COMMENTS

MIRA’s Rating :

Aa

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 80000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed Fast Moving Consumer Goods (FMCG) company having fine track. Available information indicates high financial responsibility of the company. Financial position of the company is good. Business is active. Payments are always correct and as per commitments. The company can be considered good for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Nirma House, Ashram Road, Ahmedabad – 380 009, Gujarat, India.
Tel. No.:	91-79-658 6512 – 16, 27546565-74
Fax No.:	91-79-658 9136 / 658 0697, 27546603/05
E-Mail :	nirma_corporate@nirma.co.in , ndpat@ad1.vsnl.net.in
Website :	http://www.nirma.co.in
Factory :	Ø Block No. 16/B, Ahmedabad-Mehsana Highway, P.O. Mandali, District Mehsana - 382 732, Gujarat, INDIA, Ø Village : Moraiya P.O. Chaharwadi Vasna, Near Modern Denim, Bavla Road, Taluka : Sanand, District Ahmedabad – 382 213, Gujarat, INDIA. Ø Sector-III, Bagdoon, Pithampur, District Dhar – 454 775, Madhya Pradesh, INDIA, Ø Plot No. B/4, Jainpur Industrial Area, Jainpur, District Kanpur Dhar – 209 101, Uttar Pradesh, INDIA, Ø Alindra Detergent Complex, P. O. Alindra, Taluka Savli. District Baroda-391 775, Gujarat, INDIA. Ø Bhavnagar Chemical Complex, P. O. Kalatalav, District Bhavnagar -364001, Gujarat, INDIA. Ø Wind Farm : Survey No. 691, Village Dhank, Taluka Upleta, District Rajkot – 360 001, Gujarat, INDIA. Ø Survey No. 358-369, Village Sachana, Taluka Viramgam, Dist. Ahmedabad - 382150

DIRECTORS

Name :	Mr. Karsanbhai K. Patel
Designation :	Chairman & Managing Director
Qualification :	B.Sc.
Date of Appointment :	20.02.1988
Name :	Mr. Rakesh K. Patel
Designation :	Director
Name :	Mr. Shrenikbhai K. Lalbhai
Designation :	Director
Name :	Mr. M. R. Shroff
Designation :	Director
Name :	Mr. Rajendra D. Shah
Designation :	Director
Name :	Mr. A. R Sarwan
Designation :	Director
Name :	Mr. Kaushikbhai N. Patel
Designation :	Director
Name :	Mr. Chinubhai R. Shah
Designation :	Director
Name :	Mr. Kalpesh A. Patel
Designation :	Executive Director
Qualification :	B.E. (Chemical Engineering) & M.B.A. (Marketing)
Date of Appointment :	01.04.1994
Name :	Mr. Hiren K. Patel
Designation :	Managing Director

KEY EXECUTIVES

Name :	Mr. Anil C. Shah
Designation :	Dy. Company Secretary

SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Indian Promoters' holding	61407960	77.35 %
Non-Promoters' holding
a. Mutual Funds	1901960	2.40 %
b. Banks, Financial Institutions, Insurance Companies (Central/State Govt. Institutions / Non-Government Institutions)	185404	0.23 %
Flls	334413	0.42 %
NRIs/OCBs	40215	0.05 %
Private Corporate Bodies	867092	1.09 %
Indian Public	14647640	18.46 %
Total	79384684	100.00 %
a. No. of shares held in physical form	4,06,379	00.51 %
b. No. of shares held in Demat form	7,89,78,305	99.49 %
Total	79384684	100.00 %

BUSINESS DETAILS

Line of Business :

Engaged in manufacturing and selling of detergents, toilet soaps, glycerine, shampoo, distilled fatty acid, sulphuric acid, alfa olefin sulphonate, linear alkyl benzene.

Products :

Synthetic Detergents	34029001
Toilet Soap	34011103
Linear Alkyl Benzene	38171000

Brand Names :

‘Nirma’

PRODUCTION STATUS

Particulars	Installed Capacity	Actual Production
Synthetic Detergents	*	*
Alfa Olefin Sulphonate	10,000	724092
Sulphuric Acid	125,000	--
Toilet Soap	1,70,000	89441
Distilled Fatty Acid	1,35,000	--
Glycerine	18,000	--
Shampoo	2,000	--
Linear Alkyl Benzene	75,000	97295
Soda Ash	650,000	527812
Single Super Phosphate	1,00,000	--
Packaging	13,500	--
Salt	1,800,000	--
Tooth Paste	2000	--

GENERAL INFORMATION

Suppliers :

Alfa Industrial Engineers

Altop Industries Limited

Ambica Steel Furniture

Ami Industrial Corporation

Anoopam Adhesives

Aplab Limited

Ashok Industries

Avro Industries

B.D. Engineers

D.N. Engineers

Embee Engineering Works

IGP Engineers Private Limited

J.J. Engineering

Jagruti Rubeer Enterprises Private Limited

Mahavir Corporation

Precision Equipment Company

Shri Ram Filteration & Engineering Company

Standard Spring Works

Trio Engineering

Works and Triveni Equipments Private Limited

No. of Employees :

3630

Bankers :

Ø Bank of Baroda

Ø State Bank of India

Ø Bank of India

Ø HDFC Bank Limited

Ø Credit Lyonnais

Ø ANZ Grindlays Bank Limited

Ø UTI Bank Limited

Ø The Kalupur Commercial Cooperative Bank Limited

Facilities :

SECURED LOANS	(figures are in Rupees Millions)
Debentures
225 Deep Discount Bonds	3375.000
Less : Discount (to the extent remaining to be written off in future years)	416.800
	2958.200
Short term loans and advances from banks
Cash credit accounts	484.800
TOTAL	3443.000
UNSECURED LOANS
Inter corporate deposits	21.600
Interest free sales tax deferment loan under sales tax incentive scheme of Government of Gujarat (guaranteed by directors)	16.300
TOTAL	37.900

Banking Relations :	Satisfactory
Auditors :
Name :	Hemanshu Shah & Company Chartered Accountants
Address :	Ahmedabad, Gujarat, India
Subsidiaries :	Nirma Consumer Care Limited Nirma House, Ashram Road, Ahmedabad –380 009 Tel No.: 91-79-2658 6512 – 16 Fax No : 91-79-2658 9136 / 2658 0697
Associates :	Ø Mr. Karsanbhai K Patel Ø Ms. Shantaben K Patel Ø Mr. Rakeshbhai K Patel Ø Mr. Hirenbhai K Patel Ø Mr. Ambubhai M. Patel Ø Kargil Holdings Private Limited Ø Navita Detergents Private Limited Ø Nirma Credit & Capital Limited Ø Nirma Chemical Works Limited Ø Nirma Petrochemicals Limited Ø Nirma Industries Limited Ø Nityakunj Chemicals Company Limited Ø Nirma Education and Research Foundation Ø Krishna Global Trade Limited Ø Mauritius and Nirma Bangladesh Limited, Bangladesh
Joint Venture Companies:	Ø Kirsna Global Trade Limited, Mauritius Ø Nirma Bangladesh Limited, Bangladesh

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
95000000	Equity Shares	Rs.10 each	Rs. 950.000 millions
500000	6% Redeemable non cumulative non convertible preference shares	Rs.100 each	Rs. 50.000 millions
	TOTAL		Rs. 1000.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
	Issued, Subscribed Capital
79401376	Equity shares	Rs.10 each	Rs. 794.000 millions
279285	6% Redeemable non cumulative non convertible preference shares of	Rs.100 each	Rs. 27.900 millions
	TOTAL		Rs. 821.900 millions
	Paid-up Capital
79384684	Equity shares	Rs.10 each	Rs. 793.900 millions
279285	6% Redeemable non cumulative non convertible Preference shares	Rs.100 each	Rs. 27.900 millions
	TOTAL		Rs. 821.800 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		821.800	821.700	821.700
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		19658.100	17925.100	15533.900
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		20479.900	18746.800	16355.600
LOAN FUNDS
1] Secured Loans		3443.000	5644.600	5709.100
2] Unsecured Loans		37.900	132.400	1083.600
TOTAL BORROWING		3480.900	5777.000	6792.700
DEFERRED TAX LIABILITIES		3541.800	3584.800	3533.100
TOTAL		27502.600	28108.600	26681.400
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		17501.300	18906.900	20382.500
Capital work-in-progress		407.800	280.300	117.700
INVESTMENT		74.900	68.200	07.400
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	3081.400	3066.000	3196.100
	Sundry Debtors	2215.200	1929.300	1623.000
	Cash & Bank Balances	2711.700	1945.700	140.800
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	3199.800	3323.700	2858.600
Total Current Assets		11208.100	10264.700	7818.500
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	917.700	867.400	1192.200
	Provisions	771.800	544.100	452.500
Total Current Liabilities		1689.500	1411.500	1644.700
Net Current Assets		9518.600	8853.200	6173.800
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		27502.600	28108.600	26681.400

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		19188.000	18388.700	17427.100
Other Income		340.200	134.700
Increase / [Decrease] in Stock		69.800	[174.400]
Total Income		19598.000	18349.000	3770.300
Profit/(Loss) Before Tax		3440.200	3528.100	2468.000
Provision for Taxation		1026.400	781.600	268.700
Profit/(Loss) After Tax		2413.800	2846.500	2199.300
Earnings in Foreign Currency :
	Export Earnings	533.200	657.500	2199.300
	Other Earnings	1.900	3.300
Total Earnings		535.100	660.800	2199.300
Imports :
	Raw Materials	1703.400	1735.600
	Stores & Spares	139.200	65.800	603.700
Total Imports		1842.600	1801.400	603.700
Expenditures :
	Consumption of raw materials	9061.600	9255.300
	Payments to and provision for employees	438.000	419.200	12101.100
	Manufacturing, administrative and selling expenses	5061.300	3482.600
	Interest and charges	[67.300]	96.700
Total Expenditure		14493.600	13253.800	12101.100

QUARTERLY RESULTS

PARTICULARS	30.06.2006	30.09.2006	31.12.2006
Type	1st Qtr	2nd Qtr	3rd Qtr
Sales Turnover	5255.700	5241.700	5580.500
Other Income	83.600	10.100	31.100
Total Income	5339.300	5251.800	5611.600
Total Expenditure	4151.000	4252.300	4581.100
Operating Profit	1188.300	999.500	1030.500
Interest	[54.200]	[16.800]	[27.700]
Gross Profit	1242.500	1016.300	1058.200
Depreciation	389.100	385.600	388.000
Tax	106.100	183.900	[154.300]
Reported PAT	747.300	446.800	824.500

Notes

200606 Quarter 1 –

Expenditure Includes (Increase)/Decrease in Stock in Trade Rs (132.90) million Consumption of Raw Materials Rs 2467.80 million Staff Cost Rs 143.10 million Power & Fuel Rs 549.30 million Other Expenses Rs 1123.70 million Tax Indicates Provision for taxation (including deferred tax & fringe benefit tax) EPS is Basic & Diluted Status of Investor Complaints for the quarter ended June 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 01 Complaints disposed off during the quarter Nil Complaints unresolved at the end of the quarter 01 1. The above unaudited results after reviewed by the Audit Committee and taken on record by the Board of Directors at their meeting held on July 31, 2006, subject to Limited Review by the Auditors. 2. Figures of the previous year have been regrouped / rearranged wherever necessary. 3. A Scheme of Arrangement for the demerger and transfer of the Undertaking of Core Healthcare Limited (CHL) into the Company with effect from December 01, 2004 has been approved by the Shareholders of the Company and petition is pending before the Hon'ble High Court of Gujarat for sanction. Upon sanction Company will be entitled for set off of unabsorbed carry forward loss and depreciation, hence no provision for Income tax has been made accordingly.

200609 Quarter 2 –

Expenditure Includes (Increase)/Decrease in Stock in Trade Rs (441.30)million Consumption of Raw Materials Rs 2596.10 million Staff Cost Rs 135.30 million Power & Fuel Rs 579.00 million Other Expenses Rs 1383.20 million Tax Indicates Provision for taxation (including deferred tax & fringe benefit tax) EPS is Basic & Diluted Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 04 Complaints disposed off during the quarter 04 Complaints unresolved at the end of the quarter Nil 1. The above unaudited financial results after reviewed by the Audit Committee were taken on record by the Board of Directors at their meeting held on October 28, 2006, subject to Limited Review by the Auditors. 2. A Scheme of Arrangement and demerger and transfer of the Undertaking of Core Healthcare Limited into the Company with effect from December 01, 2004 has been approved by the Shareholders of the Company and petition is pending before the Hon'ble High Court of Gujarat for sanction. Upon sanction Company will be entitled for set off of unabsorbed carry forward loss and depreciation. The Company will give effect of the aforesaid Scheme of Arrangement including benefit of tax in its accounts upon the same becoming effective. 3. The company has spent an amount of Rs 99.00 million towards maintenance, upkeep and other cost before taking of plant at Sachana of Cora Healthcare Limited Company is operating the plant under lease agreement. Referred expenditure will be allocated with due accounting effect once the company becomes Legal Owner of the said undertaking. 4. Figures of the previous year have been regrouped/rearranged wherever necessary.

200612 Quarter 3 –

Tax Indicates Provision for taxation (including deferred tax & fringe benefit tax) EPS is Basic & Diluted Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 14 Complaints disposed off during the quarter 14 Complaints unresolved at the end of the quarter Nil 1.The above unaudited financial results after reviewed by the Audit committee were taken on record by the Board of Directors at their meeting held on January 20, 2007 subject to limited review by the auditors. 2.A Scheme of Arrangement and demerger and transfer of the undertaking of Core Healthcare Limited (CHL) into the Company with effect from December 01, 2004 has been approved by the Shareholders of the Company and petition has been filed with the Hon'ble High Court of Gujarat. Upon approval of the said Scheme by the Hon'ble High Court of Gujarat, Company will be entitled for set off of unabsorbed carry forward loss and depreciation, hence provision for Income Tax has been made accordingly. 3. The Company has spent an amount of Rs 111.30 millions towards maintenance, upkeep and other cost for plant at Sachana of Core Healthcare Limited Company is operating the plant under lease agreement. Referred expenditure will be allocated with due accounting effect once the Company becomes Legal Owner of the said undertaking. 4. Figures of the previous year have been regrouped / rearranged wherever necessary.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	0.24	0.36	0.56
Long Term Debt-Equity Ratio	0.20	0.30	0.51
Current Ratio	1.86	1.48	1.37
TURNOVER RATIOS
Fixed Assets	0.82	0.79	0.76
Inventory	7.30	6.86	6.85
Debtors	10.83	12.10	12.63
Interest Cover Ratio	18.13	11.38	9.60
Operating Profit Margin(%)	23.19	25.29	28.32
Profit Before Interest And Tax Margin(%)	16.22	18.00	20.68
Cash Profit Margin(%)	17.73	20.54	19.77
Adjusted Net Profit Margin(%)	10.76	13.24	12.12
Return On Capital Employed(%)	15.02	16.23	17.62
Return On Net Worth(%)	12.32	16.23	16.15

STOCK PRICES

Face Value	Rs.10.00/-
High	Rs.345.00/-
Low	Rs.334.00/-

LOCAL AGENCY FURTHER INFORMATION

FIXED ASSETS

Ø Freehold land

Ø Leasehold land (permanent)

Ø Building

Ø Trademarks

Ø Goodwill

Ø Plant & machinery

Ø Furniture and fittings

Ø Equipments

Ø Vehicles

OPERATIONS: 

 During the year under review, the Company achieved Gross Sales of Rs.22441.1 Millions against Rs.21492.1 Millions for the previous year, registering growth of about 4.46%. Detergent and Soap constituted 68.66% of Gross Sales as compared to 70.38% for the previous year. Detergent sales grew by about 3.73% and Soap sales declined by about 2.20% as compared to the previous year. There was overall improvement in sales price realization, except in case of Glycerin. Marginal reduction in Raw Material consumption in relation to Gross Sales was off set by increase in Manufacturing and Other Overheads. Profit before Depreciation and Tax at Rs.5004.4 Millions was down by 1.78% as compared to Rs.5095.2 Millions for the previous year. For detailed analysis of the performance, refer to Management's Discussion and Analysis section of the Annual Report. 

NEW PROJECTS: 

The company has taken up, at Kalatalav Plant, expansion of Pure Water Plant capacity from 2240 M3/day to 4480 M3/day. The expansion has been taken up to meet the extra pure water requirement for utilities. This will also result in doubling the present Edible Salt capacity to 1600 Mt/day. In addition, the company is also setting up at the same location 200 MT/day Caustic Soda plant. In order to meet the steam and power requirement of Caustic Soda and Pure Water plant the present utilities are required to be expanded. Therefore, additional 200 MT Boiler is also being added to the present capacity. These projects will require fresh investment of about Rs.3500 Millions. It is estimated to commence Pure Water plant by March 2007 and the other two by March 2008. 

Last year the company was envisaging investment into setting up of Coke Ovens to manufacture Coke largely for its captive requirements. However sudden and significant downward trend in the prices of Coke has forced company to put the plans on hold for some time now. Similarly work on the Cement project is also delayed because of delay in acquiring land. 

SCHEME OF ARRANGEMENT OF CORE HEALTHCARE LIMITED WITH THE COMPANY: 

Last year the Company entered into Tripartite Agreement with Core Healthcare Limited (CHL) and Asset Reconstruction Company (India) Limited (ARCIL) in the matter of acquisition of Sachana undertaking of CHL effective from November 30th 2004. Pursuant to the Tripartite Agreement a Scheme of de-merger was filed on October 25th 2005 with the H'ble High Court of Gujarat. Shareholders of both the companies and Secured Creditors of CHL have approved the scheme. The demerger petition is now awaiting final approval from the H'ble High Court of Gujarat. The company took physical possession of the undertaking on January 19th 2006 under indepedent arrangements. The company has started production at the Sachana Plant after required revamp of the facilities. Necessary rights in this regard are derived from agreements executed with ARCIL. Upon sanction of the scheme, the company will be entitled for set off unabsorbed carried forward loss and depreciation. Accordingly, the company, as an abundant caution, has made provision for income tax. The company will give effect of the aforesaid scheme of arrangement, in its accounts upon the same being approved.

MANAGEMENT DISCUSSION AND ANALYSIS 

SALES AND OPERATIONAL PERFORMANCE:  

The company's main product portfolio of Detergent and Soap belong to one of the highly competitive consumer goods industry in the country. For the Detergent and Soap industry the financial year 2005-06 proved to be sluggish and unfavorable with no discernible uptrend at the end of the year. The market did not show sign of recovery even after several years of flat growth. Mass segments within both Detergent and Soap continued to exhibit resistance to substantial price increases. Demand in the premium segment did not display any elasticity to price. On the other hand Price war witnessed in the premium segment did not last long and also did not result into any consumer shift as was widely speculated. 

Capacity Utilization of Detergent is not ascertainable as the operations are largely through manual process. However in comparison of the previous year, capacity utilization of all the products portfolio of the company has declined. When compared with previous year's figures, production of Soap declined by 4.95%, Soda Ash by 2.23% and Linear Alkyl Benzene (LAB) by 11.07%. Lower utilization was driven by lower demand of the end product and general sluggish trends in the market. 

During the year under review, Detergent, Soap, Soda Ash and LAB continued to be the main source of revenue for the company with combined Gross sales of these products Rs.20950 Millions or 93.31% of the total Gross sale of Rs.22410 Millions. While Gross sales of Detergent and Soap at Rs.15410 Millions accounted for 68.66% of the total Gross sales, Soda Ash and Linear Alkyl benzene accounted for 24.65% of the Gross sales. The proportionate shares of Detergent, Soap, Soda Ash and LAB in the total Gross sales were more or less the same as compared to the previous year. Despite stagnant market conditions, the company was able to take price hikes, on selective basis, of about 9.00% in Detergent and 4.81% in Soap. The price increases were sharper in case of Soda Ash at 23.20% and LAB at 21.54%. This price rise to an extent off set the adverse effect of contraction in volumes, increase in input cost and escalated cost of transportation.  

OUTLOOK: 

 FMCG sector is one of the most discussed and dissected sector not only in the context of Indian economy but also globally. Within FMCG, Detergent and Soap industry has highest level of penetration in India. Therefore, general industry forecast based on monsoon, disposable income and social development might not give accurate results in case of Detergent and Soap industry.

Going forward the industry will witness steady growth, inelasticity of demand to price and steady per capita consumption. Quarter over quarter results could, however, show some variation from this broader trend. The popular and economy segments, the company's main product lines, are relatively lesser sensitive to price as compared to premium segments. The philosophy to offer value for money will continue to guide the company in these touch market conditions. The company has now completed all its backward integration investment into the main line of Industry. Apart from catering to the captive requirements of the company's main product portfolio, some of the backward integration facilities have in themselves become a business line. LAB market is also showing signs of saturation, both domestically and internationally. Over the next two years the global capacities will be higher than the global demand, forcing pressure on both price and margin. Demand for Soda Ash, however, will continue to grow at healthy rate. The company's scheme of arrangement in respect of Sachana Unit of Core Health Care Limited is pending for approval of the Honorable High Court of Gujarat. The company has obtained possession of some of the assets from Asset Reconstruction Company (India) Limited (ARCIL) and commenced production. The company has launched intravenous fluids in the name of 'Nirlife' brand in the market. 

 Apart from the maintenance capex of Rs.500 Millions, new investments are underway into several projects. The Company has undertaken at it's Kalatalav plant three projects. The Company is expanding Pure Water Plant capacity from 2240 m3/day to 4480 m3/day. The Pure Water Plant project activity has been taken with the view to meet the extra pure water requirement for utilities and in turn double its edible salt capacity to 1600 MT/day. The detailed engineering job of this project has been awarded to M/s. Jacobs H&G, Mumbai and the procurement planning, project execution, etc. is being handled by the department directly. The estimated cost of this project is Rs.800 Millions and will be on stream by March, 2007. The company is also setting up a 200 MT/day Caustic Soda plant at Kalatalav at an estimated cost of Rs.1600 Millions. The project is likely to go on stream by March 2008. To meet the steam and power requirement of Caustic Soda and Pure Water Plant the present utilities are being expanded at an aggregate estimated outlay of Rs.1000 Millions. The utility expansion is scheduled for completion by February 2008. 

The company hopes to maintain operating margin by combination of cost control measures as well normal price rises. For the financial year 2006-07 the company expects to improve on its cash accruals on the back of improved volumes, better price realization and addition of new business lines. Also the company should achieve net debt free status by the end of FY 07. Effective from FY 07 the marketing from the wholly owned subsidiary Nirma Consumer Care Limited has been discontinued and instead the same is being done from the company. 

The management of the company is conscious of the need to find viable investment opportunities for robust cash flows that are generated year after year. The company is very actively looking for opportunity of inorganic growth in the FMCG space where company can leverage its current strength and past experience.  

AS PER WEBSITE

Business Summary

Incorporated as a private limited company, Nirma was converted into a deemed public company and then to a public limited one in Nov.'93. Nirma is an over Rs. 17 billion brand with a leadership presence in Detergents, Soaps and Personal Care Products, offering employment to over 15,000 people. During 1996-97, Nilnita Chemicals, Nirma Detergents, Nirma Soaps and Detergents, and Shiva Soaps and Detergents were amalgamated with the company. The company created "Nirma Consumer Care Limited" - a wholly owned subsidiary on 22nd Aug.'97, which is the sole licensee of the brand name 'Nirma' within India.To have a greater control on the quality and price of its raw materials, Nirma has undertaken backward integration into manufacture of Industrial Products like Soda Ash, Linear Alkyl Benzene (LAB), Alfa Olefin Sulphonates (AOS), Fatty Acid, Glycerine and Sulphuric Acid.

Today,Nirma sells over 800000 tonnes of detergent products annually,giving it a 35% share of the Indian market,which is the world's second largest fabric wash products markets. This makes Nirma India's largest detergent marketer and one of the world's biggest detergent brands.The Company has acquired Kisan Industries Limited situated at Village Moraiya, Dist. Ahmedabad as a going concern, which was engaged in the business of manufacture of detergents, Single Super Phosphate, fertilizer and printing and packaging.The second stream of the 420000 tpa Soda Ash plant at village Kalatalav, Bhavnagar was commissioned in September 2000. The Company also set up a pure water plant to manufacture 0.280 millions tpa Vaccum-salt in October 2000.Debottlenecking process which was made during 2001-02 by the company resulted in expansion of installed capacity of Soda Ash at Village Kalatalav,from 420000 TPA to 650000 TPA. The total cost of the project is approximately Rs.1100 millions. This project is expected to be completed in September,2002. The company issued Secured NCD aggreating Rs.3600 millions in order to augment its working capital and also to bring-in cost effiency in funding cost.

GENESIS

Nirma is one of the few names - which is instantly recognized as a true Indian brand, which took on mighty multinationals and rewrote the marketing rules to win the heart of princess, i.e. the consumer.

Nirma, the proverbial ‘Rags to Riches’ saga of Dr. Karsanbhai Patel, is a classic example of the success of Indian entrepreneurship in the face of stiff competition. Starting as a one-man operation in 1969, today, it has about 14, 000 employee-base and annual turnover is above Rs. 25000 Millions.

India is a one of the largest consumer economy, with burgeoning middle class pie. In such a widespread, diverse marketplace, Nirma aptly concentrated all its efforts towards creating and building a strong consumer preference towards its ‘value-for-money’ products.

It was way back in ‘60s and ‘70s, where the domestic detergent market had only premium segment, with very few players and was dominated by MNCs. It was 1969, when Karsanbhai Patel started door-to-door selling of his detergent powder, priced at an astonishing Rs. 3 per kg, when the available cheapest brand in the market was
Rs. 13 per kg. It was really an innovative, quality product – with indigenous process, packaging and low-profiled marketing, which changed the habit of Indian housewives’ for washing their clothes. In a short span, Nirma created an entirely new market segment in domestic marketplace, which is, eventually the largest consumer pocket and quickly emerged as dominating market player – a position it has never since relinquished. Rewriting the marketing rules, Nirma became a one of the widely discussed success stories between the four-walls of the B-school classrooms across the world.

The performance of Nirma during the decade of 1980s has been labelled as ‘Marketing Miracle’ of an era. During this period, the brand surged well ahead its nearest rival – Surf, which was well-established detergent product by Hindustan Lever. It was a severing battering for MNC as it recorded a sharp drop in its market share. Nirma literally captured the market share by offering value-based marketing mix of four P’s, i.e. a perfect match of product, price, place and promotion.

Now, the year 2004 sees Nirma’s annual sales touch 800,000 tones, making it one of
the largest volume sales with a single brand name in the world. Looking at the FMCG synergies, Nirma stepped into toilet soaps relatively late in 1990 but this did not deter it to achieve a volume of 100,000 per annum. This makes Nirma the largest detergent and the second largest toilet soap brand in India with market share of 38% and 20% respectively.

It has been persistent effort of Nirma to make consumer products available to masses at an affordable price. Hence, it takes utmost care to provide finest products at the most affordable prices. To leverage this effort, Nirma has gone for massive backward integration along with expansion and modernization of the manufacturing facilities.

The focal objective behind modernisation plan is of up gradation with resource-savvy technology to optimise capabilities. Nirma’s six production facilities, located at different places, are well equipped with state-of-art technologies. To ensure regular supply of major raw materials, Nirma had opted for backward integration strategies. These strategic moves allowed Nirma to manage effective and efficient supply-chain.

Nirma has always been practiced ‘value-for-money’ plank. Nirma plans to extend the same philosophy in categories as commodity food products, personal care products and packaged food. Distinct market vision and robust infrastructure allowed Nirma to have cost leadership. Apart from this, lean distribution network, umbrella branding and low profile media promotions allowed it to offer quality products, at affordable prices.

In present scenario, an inspiring 59-year-old persona, Dr. Karsanbhai K. Patel, leads Nirma, playing role of key strategic decision-maker, whereas his next generation has already skilled management capabilities. Shri Rakesh K Patel – a qualified management graduate, is spearheading the procurement, production and logistic functions, whereas Shri Hiren K Patel – a qualified Chemical engineer and management graduate, heads the marketing and finance functions of the organisation. Shri Kalpesh Patel, Executive Director, leads the professional organisational structure.

The man behind the success of Nirma phenomenon – Dr. Karsanbhai Patel is a recipient of various awards and accolades. He has been bestowed with various awards like…

Udyog Ratna by Federation of Association of Small-Scale Industries of Gujarat, New Delhi.

Outstanding Industrialist of Eighties by Gujarat Chamber of Commerce and Industry, Ahmedabad (in 1990).

Gujarat Businessman Award in 1998 by Gujarat Chamber of Commerce and Industry, Ahmedabad.

Excellence in Corporate Governance Award by Rotary International District 2000.

A&M Hall of Fame, _______.

Shri Karsanbhai has been awarded an Honorary Doctorate by Florida Atlantic University, Florida, USA in the year 2001 in recognition of his exceptional accomplishments as a philanthropist and businessman.

This world has also recognised his ability, acumen and wisdom and in recognition of the services rendered by him in his various capacities. Dr. Karsanbhai Patel has also served as a Chairman for two terms to the Government of India’s Development Council for soaps and detergents, as a Member of Bureau of Indian Standards Committee for Soaps and Detergent Industries and President of Gujarat Detergent Manufacturers Association.

VISION, MISION & PHILOSOPHY

Nirma is a customer-focused company committed to consistently offer better quality products and services that maximise value to the customer.

This customer-centric philosophy has been well emphasised at Nirma through:

Ø Continuously exploring & developing new products & processes.

Ø Laying emphasis on cost effectiveness.

Ø Maintaining effective Quality Management System.

Ø Complying with safety, environment and social obligations.

Ø Imparting training to all involved on a continuous basis.

Ø Teamwork and active participation all around.

Ø Demonstrating belongingness and exemplary behaviour towards organisation, its goals and objectives.

Nirma is a phenomenon and synonymous with Value for Money. The brand transcends the specific dynamic of any particular product category, which is best captured in its above mission statement - a statement of sustained innovation, an unceasing effort to deliver better value to consumers, through better product quality.

CORPORATE SOCIAL RESPONSIBILITY

Nirma's vision visualises itself as a vibrant, pro-active and widely admired, ethical corporate citizen. Nirma believes, that exemplary achievements on the business points are not enough in the making of a good corporate citizen. In fulfilment of this role as a responsible part of the society and environment in which one operates, Nirma has undertaken a host of activities in the educational and social development areas.

Realising the significant role of education - especially technical and managerial in socio-economic development of the nation, Nirma played a vital role by establishing the Nirma Education & Research Foundation (NERF) in 1994. Recently, this Foundation has been awarded University status. This status gives way to shape up and expand into a body providing education in other courses like medicine, nursing, biotechnology, etc. along with the existing courses under a single roof of Nirma University. Today, this state-of-the art academic infrastructure runs various institution bodies such as Institute of Technology, Institute of Management, Institute of Pharmaceutical Sciences and Institute of Diploma Engineering. These all institutions are located in a disciplined, serene and pleasant environment. The campus blends beautifully with the green landscaping, aesthetic elegance of arches and the vibrant pursuit of knowledge by the young aspirants. The environment gives full scope for group activities, which are plenty, as also to individual pursuits for development on preferred tracks.

Institute of Management is a one of the premier business school, providing quality management education, and nourishing managerial talent. Within a short span, this institution achieved a position in Top-25 B-schools of India. The institute is having state-of-art infrastructure facilities and eminent faculties are sharing and contributing their knowledge to nurture the Indian industry with best managerial skills. Presently, the institution offers a two-year full time programme in business management and managing family business disciplines. Fellowship programme is doctoral level programme for post-graduate scholars in management for those who want to pursue careers in research, consulting, and academics. The programme consists of domain-specific advance courses for skill formation in research, consulting and teaching. To impart management learning to working executive community, Institute of Management is also offering three-years part-time management programme. Management Development Programmes [MDPs] and Executive Diploma Programs [EDPs] are uniquely designed for working executives, managers and entrepreneurs in the fields of Finance, Marketing and Human Resource Management. The programme has been tailored to suit the needs of working executive, managers and entrepreneurs who are seeking an exposure to modern management concept and practices.

Institute of Technology offers degree-engineering courses in Chemical, Instrumentation & Control, Electronics & Communication, Computer Sciences, Civil, Mechanical and Electrical technologies. Again, the well-developed infrastructure, knowledge-based faculties and facilities offered at the institution, gives it a priority choice in student community. The institute also offers Post-graduation, advanced courses in various technology disciplines. Year-around different happenings and seminars keep the environment very lively and provide opportunities to her students to perform brilliantly in their disciplines. Institute is also offering Masters in Computer Application courses.

Institute of Diploma Studies is offering four-year diploma programme. This programme covers sandwich pattern of multi point entry (MPE) and credit system (CS). This methodology helps students to comprehend industrial practices when they are in the institution allowing them opportunity to develop skills in far better way than their counterpart of non co-operative type programme. This institute is recognized by the All India Council for Technical Education (AICTE) and State Government of Gujarat.

Institute of Pharmaceutical Sciences is responsible for preparing students to enter into a career in pharmacy and function as professionals and responsible citizens in changing health care systems. A dynamic, challenging and comprehensive curriculum, includes a foundation in the biological, biomedical, clinical, pharmaceutical and physical sciences, clear focus on application and use of knowledge in practical settings, and a general education in healthcare systems, ethics, management, professional issues, communication and practical skills.

NirmaLabs is another contribution of Nirma with an objective to nurture, promote and facilitate potential entrepreneurs in their pursuit of knowledge based large-scale wealth generation for stakeholders and society. The prospects will undergo the program of grooming and incubation at NirmaLabs, and will then be supported to build the incubated ventures with appropriate support.

Nirma has already contributed Rs. 350 million for the development of these institutes, an amount, which is likely to rise further to Rs. 500 million. The infrastructure facilities created here are of international standards and they have already become models for similar institutes. Plans are underway to start Post Graduate & Research Courses in Management and Technology, as well as an IAS training center and a programme in Masters of Computer Applications.

Nirma Memorial Trust and Nirma Foundation - Nirma Memorial Trust looks after deprived women in Gujarat. It builds Ashrams and guesthouses for pilgrims and the elderly. The Nirma Foundation, set up in 1979, contributes towards the running of schools, colleges, temples and social institutions, within the state and outside.

Chanasma Ruppur Gram Vikas Trust in Mehsana of which Mr. K. K. Patel is the founder trustee and President provides education, maintenance of public health and related facilities in rural areas. The trust has started several institutions in Ruppur, including the Arts & Commerce College, and an ITI training institute and a ladies hostel.

MAJOR PLANTS

Soda Ash ::...

Investment of Rs. 11400 millions

Capacity

650,000 TPA

770 m3/hr capacity Sea Water RODM plant

40 MW Captive co-generation plant

10,000 MT solid handling

Energy efficient technology from AKZO, Netherlands

Only Soda Ash plant in the world with full DCS controls

ICMA award for Best Total Water Management Practices in Chemical Industry Category

Linear Alkyl Benzene ::...

Investment of Rs. 6300 millions

75,000 TPA capacity

Only second plant in the world with Eco-friendly Non HF technology from UOP, USA

Bio-degradable product

70 km of integrated pipeline network for feed stock

8,00,000 TPA of Feed Stock

32% market share

DCS controlled fully automatic plant

Packaging ::...

Full range of Packaging facilities

13,500 TPA of packaging material

7,200 TPA of Poly Ethylene film manufacturing

6,000 TPA Paper Wrapper printing

6,000 TPA Laminated Wrappers & Pouch manufacturing

3,600 TPA of Stiffner Boards Poly Coating and Slitting

14,000 TPA Craft Paper manufacturing

12,000 TPA Corrugated Box manufacturing

State of art production facilities

8 colour printing from Cerruti Spa, Italy

2 lines of 3 - Layer Extrusion Plant from Reifenhauser, Germany

Automatic Control from Prestech, U.K. and Eltromet, Germany

Soaps ::...

Investment of Rs. 2000 millions

30,00,000 Soap pieces sold per day

Annual sales of Rs. 5000 millions

20% market share

Second largest soap manufacturer in India

Four lines of 500 soaps per minute

Detergents ::...

50,00,000 pieces sold per day

38% market share

Largest Detergent manufacturer of India

Edible Salt ::...

Asia’s largest salt works

Spread over 30,000 acres

Edible salt capacity of 288,000 tpa

Edible vacuum evaporated salt plant with

Technology from akzo nobel, netherlands

Tripple effect monel cladded evaporator

Fluidized bed dryer

Human contact free process from water to packaging

Industrial Salt ::...

Asia’s largest salt works

Spread over 30,000 acres

Industrial salt capacity of 15,00,000 tpa

Others ::...

AOS ( Alfa Olefin Sulfonate )

Sulfuric Acid

Glycerin

SSP ( Single Super Phosphate )

Consumer Products

Soaps

Detergents

Edible Salt

Scouring Products

INDUSTRIAL PRODUCT

LAB ( Linear Alkyl Benzene )

AOS ( Alfa Olefin Sulfonate )

Sulfuric Acid

Glycerin

Soda Ash

Pure salt

Vacuum Evaporated Iodized Salt

SSP ( Single Super Phosphate )

Sodium Silicate

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.44.56
UK Pound	1	Rs.85.79
Euro	1	Rs.58.40

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	8
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	9
--RESERVES	1~10	8
--CREDIT LINES	1~10	9
--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	YES
--OTHER MERIT FACTORS	YES/NO	NO
TOTAL		75

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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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