MIRA INFORM REPORT

Report Date :

30.07.2008

IDENTIFICATION DETAILS

Name :	ION EXCHANGE (INDIA) LIMITED
Registered Office :	Tiecicon House, P. O. Box 6273, Dr. E. Moses Road, Mahalaxmi, Mumbai – 400 011, Maharashtra
Country :	India
Financials (as on) :	31.03.2007
Date of Incorporation :	06.03.1964
Com. Reg. No.:	11-14258
CIN No.: [Company Identification No.]	L74999MH1964PLC014258
TAN No.: [Tax Deduction & Collection Account No.]	MUMI04982F
PAN No.: [Permanent Account No.]	AAACI1726L
Legal Form :	Public limited liability company. The company’s shares are listed on the Stock Exchanges
Line of Business :	Manufacture and sale of ion exchange resins, water treatment plants and chemical additives

RATING & COMMENTS

MIRA’s Rating :

A

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 5700000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established company having satisfactory track. However, at present, the company is passing thru' difficult times and continue to incur some losses. Its' payments are reported as correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office / Corporate Office :	Tiecicon House, P. O. Box 6273, Dr. E. Moses Road, Mahalaxmi, Mumbai – 400 011, Maharashtra, INDIA.
Tel. No.:	91-22-24939520 / 523 / 525 / 31 / 32/24938737 / 39890909
Fax No.:	91-22-24938737
E-Mail :	· bho.ionexch@axcess.net.in · gs.ranganathan@ieiho.cc.gw.wiprobt.gsr.vsnl.net.in · ionxchng@giasbm01.vsnl.net.in · ieil@ho.ionxchng.co.in · ieli@ionindia.co.in · hocro@ionexchange.co.in
Website :	· http://www.indialog.com/ion · http://www.ionindia.com
Factory 1 :	581-12-13, GIDC, Ankleshwar Industries Estate, Ankleshwar – 393002, Bharuch, Gujarat
Factory 2 :	R – 14, TTC, MIDC, Near Thane Belapur Road, Rabale, Navi Mumbai – 400701
Tel. No.:	91) 22 3989 0909/ 3047 2400
Fax No.:	91) 22 2769 7918
E-Mail :	rabcrointl@ionexchange.co.in
Head Office :	6-3-659, 1^st Floor, Kapadia Lane, P. O. Box 1514, Somajiguda, Hyderabad – 500 082, Andhra Pradesh
Regional Offices.:	Located at :- ² Kolkata, West Bengal ² Chennai, Tamilnadu ² Delhi ² Mumbai, Maharashtra
Overseas Office :	· Pune, Maharashtra Tel. 91-212-27124284 / 27124062 Vashi, New Mumbai, Maharashtra Tel. 91-22-27632466/67/68 Fax 91-22-27631122
Branches :	Located at :- Bangalore, Karnataka Chandigarh Hyderabad , Andhra Pradesh Indore Pune Lucknow, Uttar Pradesh Vadodara, Gujarat Visakhapatnam

DIRECTORS

Name :	Mr. G. S. Ranganathan
Designation :	Chairman
Name :	Mr. R. Sharma
Designation :	Vice Chairman and Managing Director
Name :	Mr. M. R. Menon
Designation :	Director
Name :	Mr. D. G. Rao
Designation :	Director
Name :	Dr. V. N. Gupchup
Designation :	Director
Name :	Mr. M P Patni
Designation :	Director
Name :	Mr. T. M. M. Nambiar
Designation :	Director
Name :	Mr. A K Marfatia
Designation :	Director
Name :	Mr. P Sampathkumar
Designation :	Additional Director
Name :	Mr. Dinesh Sharma
Designation :	Director
Name :	Mr. Aankur Patni
Designation :	Director

KEY EXECUTIVES

Name :	Mr. Milind Puranik
Designation :	Company Secretary
Name :	Mr. N M Ranadive
Designation :	Vice President – Finance
Name :	Dr. S. V. Mahendale
Designation :	Vice President – Resin and Membrane Division
Name :	Mr. S. N. Iyenger
Designation :	Vice President – Standard Systems
Name :	Mr. A. Mohapatra
Designation :	Vice President-HRD
Name :	Mr. A. Popat
Designation :	Vice President-Corporate Marketing
Name :	Mr. L V Keshav
Designation :	Vice President-R&D, Corporate Quality & Environment Management
Name :	Mr. R. S. Rajan
Designation :	Vice President-Consumer Products
Name :	Mr. S. Ramachandran
Designation :	Vice President-Speciality Chemicals
Name :	Mr. N. Samant
Designation :	Vice President-Water & Environment
Name	Mr. G. S. Ranganathan
Designation	Executive Chairman
Age	76 years
Qualification	M.S. (Michigan, U.S.A.)
Experience	50 years
Date of Joining	01.01.1965
Previous Employment	J. Stone & Company (India) Private Limited - Resident Engineer
Name	Mr. Rajesh Sharma
Designation	Managing Director
Age	47 years
Qualification	B. Sc., LL.B.
Experience	28 years
Date of Joining	08.01.1974

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 31.03.2007

Names of Shareholders	No. of Shares	Percentage of Holding
Promoter and Promoter Group	4949142	41.27 %
Mutual Funds and UTI	6534	0.05 %
Banks, Financial Institutions and Insurance Companies	358668	3.00 %
FIIs	826324	6.89 %
Domestic Companies	1261880	10.52 %
Public	4545298	37.91 %
NRIs / OCBs	43115	0.36 %
Total	11990961	100.00 %

BUSINESS DETAILS

Line of Business :	Manufacturer and sale of ion exchange resins, water treatment plants and chemical additives
Products :	Item Code No. Product Description 3914.00 Ion Exchangers 3906.00 Water Treatment Chemicals 842121.00 Water Filter - Zero B
Brand Names :	INDINON, INDRO, INDCHLOR, INDFLOC, EXATECH, PURIFLOW, ELECTROPURA and ZERO B
Exports :
Products :	Africa, Japan, Middle East, Russia, South East Asia, UK and USA.

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Ion Exchange Resins	M3	7764	7617
Water Treatment Plants	Nos.	Not Applicable	47647
Chemical Additives	Tonnes	5000	9344
Consumer Products		Not Applicable	Not Applicable

GENERAL INFORMATION

No. of Employees :

750

Bankers :

Ø Bank of India

Ø Canara Bank

Ø State Bank of India

Ø Axis Bank Limited

Ø Punjab National Bank

Ø EXIM Bank

Ø Indian Overseas Bank

Facilities :

Loan Funds	Rs in Millions As on 31.03.2007
Secured Loans
Cash Credit from Banks [Including working capital demand loan]	201.440
Packing Credit from Banks	18.895
Packing Credit Loan from Bank	86.970
Term Loan from a Bank	58.113
Vehicles Finance from Bank	0.544
Loan from a Bank	6.919
Total	372.881
Unsecured Loans
Fixed Deposits	126.637
Inter Corporate Deposit	28.000
Loan From Banks	40.000
Total	194.637

Banking Relations :	Satisfactory
Auditors :	S. R. Batliboi and Company Chartered Accountants
Advocate and Solicitors :	Crawford Bayley and Company
Membership :	Confederation of Indian Industry
Subsidiaries :	Ø Ion Exchange Enviro Farms Limited Ø Water Care Investments (India) Limited Ø Aqua Investments (India) Limited Ø Ion Exchange Asia Pacific Pte Limited, Singapore Ø IEI Environmental Management (M) Sdn.Bhd, Malaysia Ø Ion Exchange Environment Management [BD] Limited, Bangladesh Ø Ion Exchange Infrastructure Limited Ø Ion Exchange LLC, USA Ø Ion Exchange and Company LLC, Oman
Associates :	Ø Ion Exchange Services (East) Limited Ø Ion Exchange Services (West) Limited Ø Ion Exchange Services (North) Limited Ø Ion Exchange Services Limited Ø Aquanomics Systems Limited Ø IEI Water Tech [M] Sdn. Bhd. Malaysia Ø Astha Technical Services Limited Ø Total Water Management Services (India) Limited Ø Ion Exchange Financial Products Private Limited Ø Ion Exchange Training Resources Private Limited Ø Global Composites and Structural Limited
Joint Venture :	Ion Exchange Waterleau Limited

CAPITAL STRUCTURE

AS ON 31.03.2007

Authorised Capital :

No. of Shares	Type	Value	Amount
15000000	Equity Shares	Rs. 10/- each	Rs. 150.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
11990961	Equity Shares	Rs. 10/- each	Rs. 119.910 millions

Of the above :

1. 10000 Equity Shares of Rs. 10/- each are allotted as fully paid – up, pursuant to a contract, for consideration other than cash.
2. 2065184 Equity Shares of Rs. 10/- each are allotted as fully paid-up Bonus Shares by capitalization of Revenue Reserve / Shares Premium.
3. 9600 Equity Shares of Rs. 10/- each are allotted to the shareholders of erstwhile Hydranautics Membranes India Limited at the meeting of Board of Directors held on 15^th May 2000, pursuant to the Scheme of Amalgamation of the erstwhile HMIL with the company
4. 666700 Equity Shares and 578675 Equity Shares have been allotted to the directors and employees under Employees Stock Options Scheme – ESOS 2001 and ESOS – 2003 respectively upto 31^st March 2007.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2007	31.03.2006	31.03.2005
SHAREHOLDERS FUNDS
1] Share Capital		119.910	114.100	111.329
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1021.143	959.400	918.075
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1141.053	1073.500	1029.404
LOAN FUNDS
1] Secured Loans		372.881	441.900	488.786
2] Unsecured Loans		194.637	309.500	278.651
TOTAL BORROWING		567.518	751.400	767.437
DEFERRED TAX LIABILITIES		24.223	0.000	0.000
TOTAL		1732.794	1824.900	1796.841
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		423.204	414.800	403.128
Capital work-in-progress		70.587	9.900	18.928
INVESTMENT		64.175	41.600	30.850
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	302.750	290.200	324.549
	Sundry Debtors	1833.218	1326.500	1103.239
	Cash & Bank Balances	103.279	131.900	38.572
	Other Current Assets	2.493	0.000	3.555
	Loans & Advances	668.038	747.100	531.452
Total Current Assets		2909.778	2495.700	2001.367
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	1695.754	964.200	639.386
	Provisions	39.196	174.900	22.745
Total Current Liabilities		1734.950	1139.100	662.131
Net Current Assets		1174.828	1356.600	1339.236
MISCELLANEOUS EXPENSES		0.000	2.000	4.699
TOTAL		1732.794	1824.900	1796.841

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2007	31.03.2006	31.03.2005
Sales Turnover		4059.228	2942.049	2390.104
Other Income		28.766	25.877	0.000
Total Income		4087.994	2967.926	2390.104
Profit/(Loss) Before Tax		103.303	70.372	50.517
Provision for Taxation		43.450	19.823	2.540
Profit/(Loss) After Tax		59.853	50.549	47.977
Earnings in Foreign Currency :
	Export Earnings	453.984	346.606
	Commission Earnings	3.146	1.526	386.656
	Other Earnings	2.834	0.939
Total Earnings		459.964	349.071	386.656
Imports :
	Raw Materials	498.177	356.545	343.406
Expenditures :
	Cost of Goods Sold	2908.352	1981.197
	Operation and Other Expenses	958.508	789.795	2339.586
	Interest	73.980	84.284
	Depreciation & Amortization	43.852	42.279
Total Expenditure		3984.692	2897.555	2339.586

SUMMARISED RESULTS

PARTICULARS	31.03.2008
Type	Full Year
Sales Turnover	4755.800
Other Income	64.500
Total Income	4820.300
Total Expenditure	4549.100
Operating Profit	271.200
Interest	69.600
Gross Profit	201.600
Depreciation	44.900
Tax	50.200
Reported PAT	106.500
Dividend (%)	200..000

KEY RATIOS

PARTICULARS	31.03.2007	31.03.2006	31.03.2005
Debt-Equity Ratio	0.59	0.72	0.73
Long Term Debt-Equity Ratio	0.25	0.31	0.37
Current Ratio	1.45	1.65	1.76
TURNOVER RATIOS
Fixed Assets	4.70	3.51	2.77
Inventory	14.82	10.48	8.77
Debtors	2.78	2.65	2.49
Interest Cover Ratio	1.77	1.50	1.45
Operating Profit Margin(%)	7.39	7.83	8.21
Profit Before Interest And Tax Margin(%)	6.39	6.52	6.28
Cash Profit Margin(%)	2.65	2.88	3.79
Adjusted Net Profit Margin(%)	1.65	1.57	1.86
Return On Capital Employed(%)	15.93	11.65	9.32
Return On Net Worth(%)	6.56	4.81	4.76

LOCAL AGENCY FURTHER INFORMATION

History

Ion Exchange (India) Limited, a leader in Indian water treatment Industry offers total water management solutions for Industry, Homes and Communities. It is one of the very few companies in the world with a range of technologies, products and services that cover the entire spectrum of water and waste-water treatment. A subsidiary of British Permutit till 1985, it became a wholly Indian company when Permutit divested its holdings.  

Ion Exchange has three decades of experience in the manufacture of ion exchange resins and in the design and supply of treatment plants for water, process liquid and waste water. The company which concentrated more on Industrial sector occupies top slot in this sector. The company has also entered domestic household segment with its well known Zero-B brand of drinking water purifiers and water conditioners. Further it also entered public health sector, urban and rural, for infrastructural and community level drinking water treatment.  

Its product range includes water, process liquid and waste water treatment as well as recycling plants, using various physico-chemical processes for setting, clarification, filteration, disinfection, membrane and ion exchange technology, ion exchange resins, polymers and polyelectrolytes for water and non-water processes; boiler, cooling water and fireside treatment chemicals; Zero-B (bacteria) water purifiers which provides bacteria-free drinking water instantly and electrochlorinators for disinfecting water. 

More than 2000 plants have been supplied in India and abroad, of which over 400 installations are at thermal and nuclear power plants, fertilizer factories, refineries, and the petrochemical and other industries. The company has executed World Bank-funded projects worth over US $ 25 mln in India and many projects abroad in Thailand, Indonesia, Malaysia and Africa. 

The company has licensing agreements with some of the best known specialist water treatment companies in the US and Western Europe. It has an R&D centre which is recognised by the Department of Science and Technology. 

The company provides comprehensive consultancy services including water management surveys and detailed project reports, apart from a range of technical services. 

The company recently commissioned a second resin factory for anion manufacture.  

The company has diversified into financial services through IEL Finance, a subsidiary, which provides a wide spectrum of services in fund and fee-based areas. Ion Exchange Enviro Farms, another subsidiary is into commercial horticulture. On 19th Jan.'98, Ion Exchange Demag Limited, a 50:50 joint-venture between Ion Exchange(I) and Mannesmann Demag of Germany was incorporated. 

Hydronautics Membranes India Limited and Ion Exchange Finance Limited (a subsidiary of the Company) was amalgamated with the Company. The Company has also decided to merge the businesses of Ion Exchange Environmental Services Limited (both 100 % subsidiaries) with the company to rationalise operations, reduce costs and increase profitability. 

The company is planning to develop Oil Field Chemicals, Refinery Process Chemicals, Chemicals for Pulp & Paper Mills and Ion Exchangers.

OPERATIONS: 

During the financial year ended 31st March, 2007, the net profit after tax of the company was Rs. 59.800 Millions, an increase of 18.4% over the previous year's net profit after tax of Rs. 50.500 Millions. The turnover increased to Rs.4390 Millions from Rs. 3220 Millions of the previous year, an increase of 36.3%. 

There was a substantial jump in turnover achieved with major contribution from Engineering segment. Profitability continues to be under pressure due to increase in raw material prices and expenses incurred for efforts in Brand building exercises. 

FUTURE OUTLOOK: 

The Indian economy continues to be strong and the investment climate healthy. 

Increasing scarcity of water, rising environmental pollution, more stringent regulations on pollution control and water conservation, major investments in infrastructure development are opening up tremendous opportunities for the water and environment industry. Huge investment is planned by Government on drinking water and Sanitation Projects. Additionally government plans to privatise drinking water and sanitation projects will also open up drinking water purification and operation & maintenance business for water treatment companies. 

The expansion of the Company's solutions portfolio into entire environment management-water, waste water, solid waste, air and renewable energy and the diverse sectors the Company operates in - infrastructure, industrial, municipal and household, are expected to result in significant growth of its markets and business. 

Significant increase in the Company's presence overseas and the global acceptance of its products and services are expected to considerably increase export business. 

Further, the demand for world class quality, standards and ethics from industry worldwide, places the Company in a favourable position. 

The Company therefore views the future with optimism. 

FINANCIAL RESOURCES: 

Share Capital: 

Under Employees' Stock Option Scheme - ESOS - 2001, the Employees' Stock Option Compensation Committee (ESOCC) allotted 1,19,375 equity shares [1,60,025 equity shares in 2005-2006] and under Employees' Stock Option Scheme - ESOS - 2003, the Committee allotted 3,18,050 equity shares [1,38,325 in 2005-2006] to the directors and employees of the Company. The paid-up equity capital of the company increased from Rs. 11,55,35,360/- to Rs. 11,99,09,610/- after allotment. 

SUBSIDIARY COMPANIES: 

Aqua Investments (India) Limited and Watercare Investments (India) Limited 

During the year ended 31st March, 2007, the Subsidiary companies M/s. Aqua Investments (India) Limited posted profit before tax of Rs. 0.200 Million compared to Rs. 0.395 Million of the previous year and M/s. Water care Investments (India) Limited posted profit of Rs. 0.393 Million compared to Rs. 0.391 Million of the previous year. 

Ion Exchange Enviro Farms Limited (IEEFL): 

The focus at Ion Exchange Enviro Farms Limited (IEEFL) during the year was on 'Cost Effective' methods of cultivation. This includes Green manuring, mulching etc. This resulted in improvement in the production of mangoes and cashew in the Western and Southern farms despite unfavourable weather conditions. Intercrop income also improved through successful cultivation of groundnut in the Southern farms and vegetables in the Western farm. 

Concentrated efforts in the marketing of inputs has led to greater awareness and better acceptance of the products in specific market segments in Maharashtra. The Company's R & D has also provided necessary support by improving the products to meet specific customer requirements. All efforts are on to tap the potential markets with the existing and new products, which is expected to generate substantial business in the near future. 

With a systematic approach, IEEFL is expected to have a favourable impact on company's performance in the near future. 

Ion Exchange Infrastructure Limited: 

The Company has been established with a view to provide integrated solutions for Water treatment encompassing industrial effluent and sewage treatment and recycle etc. The Company will also provide comprehensive technical and process assistance services such as consultancy, design, detailed engineering, turnkey contracting etc. 

Ion Exchange Asia Pacific Pte. Limited, Singapore: 

The performance of the Company picked up during the year as the Company has started to cater multiple geographical areas. The Company has strengthened its resources in terms of manpower and increased presence in other countries. 

IEI Environmental Management (M) Sdn. Bhd., Malaysia: 

The Company's main activity is trading in water filtration equipments, water chemicals, resins and taking up projects of installing water filtration plants. The Company has been established with a view of facilitating operations in Malaysia and is a strategic investment which would be crucial for increasing the overall Exports to the country. 

Ion Exchange Environment Management (BD) Limited, Bangladesh: 

The Company is set up with a view to strengthen and widen the Company's presence in the International market. 

The Company's main activity is trading in water filtration equipments, water chemicals, resins and taking up projects of installing water filtration plants. 

Ion Exchange & Company LLC, Oman: 

The Company is set up to address the needs of middle east market especially Oman. The Company proposes to undertake water & waste water projects and operation & maintenance contracts of any nature. 

Ion Exchange LLC, USA: 

This subsidiary is established to address the needs of US market. The Company's operations will substantially benefit and address the parent company's needs in the US. 

Management Discussion and Analysis Report: 

a. Industry Structure and development: 

The Indian economy continues to be fundamentally strong with an upward trend, inflation is coming under control, and the GDP growth is in line with the expectations. Overall the investment climate is favorable. 

As the water crisis deepens globally, the need for water and environment management is intensifying, and increasingly water is becoming the focus of government, municipalities, industry and consumers. Awareness of water contamination and the need for good water management, introduction of increasingly stringent regulations on rainwater harvesting, water recycle, water consumption & discharge, public litigation continue to drive the water and environment industry. 

The huge investment in infrastructure development by government and private sector is another major factor driving this industry's growth and industry initiatives in developing innovative and cost-effective, technologies that will address rising environmental concerns. Companies are also increasingly adopting an environmentally sustainable approach in their production processes as well as intermediate and end products. All this augurs well and for the water and environment industry in which the company is a leading player. 

The company had already made the strategic move from water to the broader environment domain through the joint venture Ion Exchange Waterleau Limited They now offer a complete portfolio of advanced environmental solutions for infrastructure, industrial, municipal and household applications spanning water, liquid & gaseous effluents, solid waste and generation of energy from waste. This is opening new vistas and business opportunities for the company. 

b. Highlights of Performance: 

Gross turnover for the year 2006-2007 grew by 36.3% to Rs. 4390 Millions driven by good top line growth across all businesses of the company. Profit after tax increased substantially by 18.4 per cent to Rs. 59.800 Millions as compared to 50.500 Millions in the previous year. Savings in interest cost was Rs. 10.300 Millions. 

Profits could have been much higher but for steep rise in the raw material costs and investment in brand building. 

c. Segmentwise Operational Performance: 

The business of the company can be segmented into: 

1. Engineering

2. Chemicals

3. Consumer Products 

Engineering: 

The segment manufactures and sells medium and large size equipment for Water & Waste Water treatment. The turnover of Engineering Segment increased to Rs. 2830 Millions as compared to Rs. 1820 Millions during previous year. This segment continues to grow at a healthy rate while focussing more selectively on larger and profitable projects. 

This segment has taken various steps like outsourcing labour intensive activities, improved procurement practices and adopting more modern project Management methodologies. 

Chemicals: 

The segment achieved a turnover of Rs. 1280 Millions compared to Rs. 1090 Millions of the previous year. 

The segment is exporting a broad spectrum of ion exchange resins for high end applications to various overseas markets including North America. These have been received well and their acceptance is increasing. NSF certification obtained for two products is further facilitating business in the US. The Company's expansion project for increasing the resin capacity is now almost complete and they expect the business benefits to start showing thereafter. 

Good growth in turnover was registered for Specialty products, like flocculants, fuel and fireside additives and process chemicals for sugar and paper industry. 

With the promise of revival in the economic and industrial environment the segment is poised for attractive growth opportunities. The outlook is positive for the coming years. 

Consumer Products: 

2006-07 was an extremely challenging year for Consumer Product Segment. It has marked the success in catering Water Treatment Solutions to homes, societies and communities and achieved sales of Rs. 550 Millions, an increase of 12.2% over last year. The growth is a clear indicator of segment's performance and consistency in offering high quality domestic water solutions. Consumer Product Segment has successfully established Brand Zero B in the domestic water purification market as a pioneer in Reverse Osmosis (RO) water purification technology. 

The Consumer Product Segment's thrust will be in acquiring larger market and maximum customer's mind share by offering new and innovative products as per the customer's need. 

They are proud to announce that the Consumer Product Segment's Zero B brand has won the prestigious 'Water Digest' award bestowed by UNESCO along with CNBC for the year 2006-07 in the RO water purifier category. 

Consumer Product Segment's Zero B brand has also won the prestigious 'Mera Brand', India's most preferred brand award in 'Water Conditioner and Softener Plants' and continuously for the third year in the 'RO water purifier category' in a nationwide survey among consumers in 225 towns, 25 state capitals and 6 metros. 

Exports: 

The Exports grew by 31.4% from Rs. 350 Millions to Rs. 460 Millions. 

The Company has considerably expanded its overseas geographical footprint including in Oman, USA, UAE and Thailand, through the establishment of subsidiaries and joint ventures and they are well on the path of establishing themselves as a significant player in the global market. The Company is now focussing on strengthening all its overseas operations in terms of teams, infrastructure and business networks. 

d. Risks, Threats, Concerns and Risk Mitigation: 

Risk mitigation has been a priority of the Management's agenda. During the year, due to the risk concerns, management appointed an external agency to evaluate the risks that affect the business. A structured method of evaluating Risk, its impact, evolving a mitigation plan and continuous monitoring of performance against the plan is developed and operational. 

The company faces competition from multinationals and other unorganised players. These players sometimes offer unrealistic prices leading to loss of business or erosion of margins in certain cases. Mitigation plan for these risks include undertaking cost reduction without compromising quality and tying up with vendors for assured supply at competitive prices. 

Regulatory policies and changes in the law of the land, though completely beyond the control of company, affect the business operations. A periodic internal certification process to provide regulatory compliance assurance has been evolved to mitigate the regulation related risks. 

The company being a technology driven company is continuously on the look out for reputed and reliable new alliances and international partners to capitalise on the gains of technological innovations. Significant investment is also planned on research and development, technology upgradation and adoption to new technologies. 

The business has witnessed the vagaries of global prices of various raw materials like steel and styrene and the impact of the same on the profitability. The management has pursued timely action to curtail the impact still cost overruns in some projects could not be arrested. 

Fluctuations in exchange rate has been also identified as one of the risks which could impact the export earnings. However, the company has adequate hedging methods in place to mitigate this risk. 

Contingent Liabilities

1. Guarantee given by the company on behalf of subsidiary company / others Rs. 265.304 Millions
2. Bank Guarantees given to various authorities amounts to Rs. 4.507 Milliobs
3. Demand raised by authorities against which the company has filed an appeal.

Income Tax – Rs. 18.938 Millions

Excise Duty – Rs. 3.200 Millions

Sales Tax – Rs. 94.582 Millions

Customs Dury Rs. 2.453 Millions

1. Claims against the company arising in the course of business not acknowledged as debts Rs. 22.470 Millions

Fixed Assets :

Ø Land Including

Ø Property Rights

Ø Buildings on Leasehold Land

Ø Buildings on Freehold Land

Ø Ownership Blocks

Ø Ownership Flat in Leasehold

Ø Premises - DDA

Ø Plant & Machinery

Ø Vehicles

Ø Furniture, Fixture and Office Equipments

Ø Leased Assets

The concern is in trade terms with :

Ø A. A. Chemicals

Ø Alfa Fluid Piping Systems

Ø Ambika Industries

Ø Anant Enterprises

Ø Anant Udyog

Ø Ankush Enterprises - Ank

Ø Anssons Rubber Private Limited

Ø Apollo Plastic Industries

Ø Arihant Raysan

Ø Beetachem Industries

Ø Chawda Chemicals

Ø Chirag Corporation

Ø Chirag Packaging

Ø Coastal Plasto Containers

Ø Excel Prints

Ø Fusion Chemical & Products

Ø Geeta Engineering Works

Ø Godavari Plasto Containers Private Limited

Ø GPC Flow Instruments Private Limited

Ø Gujarat Barrels

Ø Heena Marketing

Ø Hindustan Chemical Industries

Ø Industrial Process Controls

Ø Innovative Services Private Limited

Ø International Fibreglass Private Limited

Ø Jai Ambe Enterprises

Ø Jas Engineering

Ø Jasmino Polymertech

Ø Jaykay Enterprises

Ø Jinal Salt Supplier

Ø KK Trading

Ø K. R. Engineers

Ø Lalan Enterprises

Ø Magnachemical Mfrs Private Limited

Ø Mani Enterprises

Ø Melzer Chemicals

Ø Metco Industries Private Limited

Ø Miramar Scientific Furnishers

Ø Modern Petro Packaging

Ø Navjeevan O Chem

Ø Nile Chemicals

Ø Oasis Enterprises

Ø Orient Chemicals

Ø Pam Synthetics

Ø Paresh Chemical Corporation

Ø Parikh Chemicals

Ø Pravinkumar & Co

Ø Prime Wovens Limited

Ø Procon Engineers

Ø R. R. Enterprises

Ø R. R. Polymers

Ø R. S. Associates

Ø Raigad Chemical Private Limited

Ø Raldeep Plastic Containers

Ø Reinhold Polyglass

Ø Reliance Cellulose Products Limited

Ø Relief Chem

Ø Roma Chemicals

Ø S. V. Sacks Private Limited

Ø Safe Offset Private Limited

Ø Sai Rubber Industries

Ø Sangeeta Plastic & Engg

Ø Savai Printers Private Limited

Ø Shree Gopal Celluchem Private Limited

Ø Shree Ram Industries

Ø Shree Surya Timbers

Ø Shri Harisiddhi Timber Mart

Ø Sis Industries

Ø Spark Engineers

Ø Sri Manjunatha Fabrication & Machining Works

Ø Srikant Minerals Private Limited

Ø Sun Beam Rubber Lining

Ø Supreme Packs

Ø Sure Manufacturing Enterprises

Ø Thermo Fab

Ø Ultrapure Technologies & Appliances India Limited

Ø Universal

Ø Usha Packaging

Ø Venture Prints & Packs

Ø Vidkul Engineering

Ø Vinay Plastics

Ø VS Enviropure India Private Limited

Ø Western Rubber Works Private Limited

Ø Yash Enterprises

Ø Zarhak Moulders Private Limited

Name	Expertise	Chairman/ Director of Other Company(s)	Chairman/ Member of the Committees of the Company and other Company(s)
Mr. M. P Patni	Mr. Patni has wide range of experience in the marketing of heavy & medium engineering equipments, water treatment plants and allied items since last 40 years. He has considerable exposure in handling large projects of national importance.	1 . Aartus & Associates Private Limited 2. Labhda Properties Private Limited 3. Ion Exchange Water treatment Services (Bangladesh) Limited 4. IonExchange Asia Pacific Pte Limited	As Member in the following committees of the Board : 1. Employees' Stock option compensation committee 2. Remuneration Committee
Mr. G. S. Ranganathan	of the Founder Members of Ion Exchange (India) Limited and was its Managing Director since inception. Under his able guidance the company has attained position of eminence in water treatment industry. He has contributed immensely for the development and growth of the Company over the years.	1. Bharat Bobbins Limited. 2. Ion Exchange Enviro Farms Limited - Chairman 3. Engineering & Agencies Private Limited	As Chairman/Member in the following committees of the Board : 1. Employees' Stock option compensation committee - Chairman 2. Shareholders/ Investors' Grievance Committee 3. Share transfer Committee - Chairman
Mr. TM. M. Nambiar	Mr. Nambiar has vast experience in Finance and General Management. He had occupied senior positions in Associated Cement Company Limited and was the Managing Director of Associated Cement Company Limited from 1996 -2002.	1. Ion Exchange Enviro Farms Limited 2. Coromandel Fertilisers Limited 3. Navin Fluorine International Limited	As hairman/Member in the following committees of the Board: 1. Audit Committee - Chairman 2. Employees' Stock Option compensation committee. As Chairman/ Member in the following committees of other companies : 1. Navin Fluorine International Limited- Chairman of Audit Committee & Member of Remuneration & Shareholders/ Investors' Grievance. 2. Coromandel Fertilisers Limited- Chairman of Audit Committee.
Mr. P Sampathkumar	Mr. Sampathkumar is currently holding the position of President- Project Management & Implementation in M/s. Makers Development Services Private LimitedHe is in charge of developing the Bandra Kurla Maker Township consisting of High Tech office buildings, entertainment centre, shopping malls etc. He has held senior positions in Taj Group of Hotels, Grand Hyatt, Oberoi Hotels and served in other capacities at Glaxo and Great Eastern Shipping.	None	None
Mr. Rajesh Sharma	Mr. Rajesh Sharma joined the Company in 1974 and during his career with the company has held a number of sales, marketing and management positions. Before taking up the office of Managing Director from April 2000, Mr. Sharma has held position as Deputy Managing Director.	1. Ion Exchange Enviro Farms Limited 2. Power Water Financial Services Private Limited 3. Watercare Investments (India) Limited 4. Aqua Investments (India) Limited 5. Ion Exchange Asia Pacific Pte Limited 6. IEI Environmental Management (M)SDN. BHD.	As Member in the following committees of the Board : 1 . Share transfer Committee 2. Shareholders/ Investors' Grievance Committee.

AS PER WEBSITE

Ion Exchange India pioneered water treatment in India and is today the country's premier company in water and environment management, with a strong international presence. Formed in 1964, as a subsidiary of the Permutit About Us of UK, they became a wholly Indian About Us in 1985 when Permutit divested their holding. They currently employ 1,000 people - multi-disciplinary teams of highly experienced professional managers technologists and scientists, supported by a widespread infrastructure in India and abroad.

If they're at the forefront of the water management industry, it's because of a sustained focus on:

• Technological advancement through R&D - innovation is their hallmark as their numerous patents testify
• Affiliations with the best specialist water treatment companies internationally.
• Human resource development - melding technology with people trained to manage it responsibly.
• Above all, commitment to customer care, that goes far beyond the sale. Technical service support is a key component of their solutions bouquet and their service network is the largest in the Indian water treatment industry.

Total Water Management

They use their wide range of processes with an integrated approach to deliver total solutions for every market - household, institutional, commercial, industrial and public water supplies, urban and rural, in India and overseas. Comprehensive services such as O&M and BOO/T enable us to meet customer needs totally, offering end benefit conveniently and economically, with single source responsibility.

Quality & Environmental Assurance

All operating units of the company are ISO 9001:2000 certified. Theirs was the first ion exchange resin manufacturing company in India to have an FDA

approved facility for the manufacture of pharmaceutical grade speciality resins.

Their resin unit is also ISO 14001 certified. And their chemical division, too, is the first in the water treatment sector in India to be ISO 14001 certified.

The Widest Range Internationally

• Pretreatment, process water/liquid treatment, waste water treatment, water recycle and product recovery using various physico-chemical processes for settling, clarification, filtration, and disinfecton, membrane and ion exchange technology.
• Ion exchange resins, membranes, polymers and polyelectrolytes for water and speciality non-water applications
• Boiler and cooling water treatment chemicals
• Fireside chemicals and fuel additives
• Process chemicals for sugar and paper manufacture
• Specialised systems for removal of excessive fluoride, arsenic, iron and nitrates from water. These along with disinfection systems have been adapted to rural needs.
• Domestic and institutional drinking water purifiers and water conditioners; central drinking water treatment systems.
• Sewage treatment and recycle systems
• Comprehensive services - rehabilitation and automation of plant, BOO/T, O&M, consultancy, operator training, design engineering and project management.

Hallmarks of Value Creation

• Strategic concept-to-completion guidance and consultancy
• 360^o. turnkey water management
• Assured supply and quality of water
• Superior price performance ratios and production efficiencies
• Single point responsibility enabling greater customer focus on core business
• Lower cost and effective use of capital employed
• Creative ownership options
• Environmentally responsive solutions

Over 4 decades of experience

In its 40 years of experience, the About Us has provided installations for diverse industries in India and abroad, from nuclear and thermal power, fertiliser and refinery, to automobile, electronics and textile . The About Us has an indepth understanding and knowledge of the Indian market as well as of the cultural patterns prevailing particularly in South East Asia, Africa and the Middle East.

• More than 35,000 plants in India and abroad - packaged, pre-engineered and custom built.
• Over 400 major installations at thermal and nuclear power stations, fertiliser factories, refineries, petrochemical and other industries.
• Over US$30 million worth projects in India on global tender basis and many projects abroad.
• Exports of equipment, ion exchange resins, membranes and water treatment chemicals to Japan, South East Asia, USA, Europe, Africa, Egypt, Middle East, Russia, Bangladesh, Nepal, Mauritius and Sri Lanka

Group Businesses

Ion Exchange Singapore Asia Pacific Pte. Limited (Subsidiary)

To service the Pan Asian region for total water management they set up Ion Exchange Asia Pacific Pte. Limited in Singapore www.ieiasiapacific.com

Ion Exchange Services Limited (Subsidiary)

The investment in building an all-India service infrastructure, started almost two decades ago, is today serving us in good stead. The service company network, the largest in the water treatment industry in

India, and recently extended to several countries overseas, offers a comprehensive range of technical and value-added services.
www.ion-services.com

Ion Exchange Enviro Farms Limited (Subsidiary)

Like the core business, the diversification into organic agri-horticulture, through Ion Exchange Enviro Farms Limited, is a natural extension of the activities and shares the vision of a better world.

An agri-business subsidiary, this company harnesses Ion Exchange India's four decades of water and environmental management experience into organic agri-horticulture. The company is among the first corporate in India to undertake scientific bio-intensive organic farming on a commercial scale. Its thrust areas of business are enviro farms, contract farming and produce marketing.

www.ionenviro.com

Ion Exchange Waterleau Limited (Joint Venture)

The joint venture with Waterleau, Brussels specializes in environmental solutions and services with proprietary technologies encompassing air, water & waste water , bio solids, waste & soil remediation

in municipal and industrial segments. www.ionexchangewaterleau.com

A Spectrum of Solutions, Spanning Every Sector

For more than four decades they’ve led the water treatment industry in India, catering to the needs of all sections of society.

They service myriad industries as diverse as power, refinery, fertilizer, food & beverage, automotive, pulp & paper, textile, pharmaceutical and electronics.

To tap the growing health consciousness among all segments, they expanded the range to offer total water care for homes, under the Zero B umbrella which enjoys countrywide brand equity.

And they’ve further extended the solutions to townships and smaller communities in the urban and rural infrastructure, working with municipalities, public health engineering departments of state governments and NGOs.

Alliances

Ion Exchange India has associations with some of the best known specialist water treatment companies in the world through which they have acquired state-of-the-art technologies.

INTERNATIONAL ASSOCIATES

Licensing Agreements with
Butler Manufacturing Services (BMS)	Ireland	Packaged Sewage Treatment Plant
Elf Antar SA	France	Oil Separators/Coalescers and Drum Skimmers
Eutech Instruments	Singapore	Water Quality Monitoring Instruments
Polymetrics	USA	Standard Reverse Osmosis System.
Nordic Water Products	Sweden	Continuous Sand Filters
Representative Agreements
Triogen	UK	UV Sterilisers
Ozonia	Switzerland	Ozonators

Joint Ventures

With Waterleau Belgium: Environmental technologies and services encompassing liquid and gaseous effluents, bio-solids and solid waste , air pollution control and recovery of energy from waste from muncipal and industrial segments.

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.42.54
UK Pound	1	Rs.84.86
Euro	1	Rs.66.95

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	9
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	8
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--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	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		68

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.	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