MIRA INFORM REPORT

Report Date :

12.04.2011

IDENTIFICATION DETAILS

Name :	HSIL LIMITED (w.e.f. 27.04.2009)
Formerly Known As :	HINDUSTAN SANITARYWARE INDUSTRIES LIMITED
Registered Office :	2, Red Cross Place, Post Box 2359, Kolkata - 700 001, West Bengal
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	08.02.1960
Com. Reg. No.:	21-024539
CIN No.: [Company Identification No.]	L51433WB1960PLC024539
IEC No.:	0588080632
TAN No.: [Tax Deduction & Collection Account No.]	HYDH00554B RTKH01805G
PAN No.: [Permanent Account No.]	AAACH7564H
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges
Line of Business :	Manufacturing, Export and Trader of Sanitaryware and Fittings, Plaster of Paris, Refractories etc.

RATING & COMMENTS

MIRA’s Rating :

A (69)

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 19000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is an established company with good track. There has been a good increase in the turnover and profits of the company. Trade relations are reported as fair. Business is active. Payments are regular and as per commitments. The company can be considered good for normal business dealings under usual trade terms and conditions.

NOTES :

Any query related to this report can be made on e-mail : infodept@mirainform.com while quoting report number, name and date.

ECGC Country Risk Classification List – April 1, 2010

Country Name	Previous Rating (31.12.2009)	Current Rating (01.04.2010)
India	A1	A1

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

INFORMATION PARTED BY

Name :	Mr. V K Ajmera
Designation :	Sr. General Manager (Corporate Finance)
Contact No.:	91-9811323233

LOCATIONS

Registered Office :	2, Red Cross Place, Post Box 2359, Kolkata - 700 001, West Bengal, India
Tel. No.:	91-33-22487406/ 22487407
Fax No.:	91-33-22487045/ 22482367
E-Mail :	hindware@somanyent.com hsikolsale@somanyent.com ngoenka@hindware.co.in
Website :	http://www.hindwarebathrooms.com http://www.hindwarehomes.com
Location :	Owned
Head Office :	11/B/8, Tewari House, 2^nd Floor, Main Pusa Road, New Delhi – 110005, Delhi, India
Tel No.:	91-11-65960160/ 61/ 62/ 63/ 64/ 25854656/ 25785278
Fax No.:	91-11-25785278
Email :	delhi@hindware.co.in
Corporate Office :	Unit No. 301-302, III Floor, Park Centra, Sector 30, N.H-8, Gurgaon – 122001, Haryana, India
Tel No.:	91-124-4779200 / 91-124-4292898
Fax No.:	91-124-4292899
Email :	delhi@hindware.co.in
Building Product Division 1:	Bahadurgarh Delhi Rohtak Road, Bahadurgarh, District Jhajjar – 124507, Haryana, India
Tel No.:	91-1276-230485/ 87- 232226-8
Fax No.:	91-1276-230138
Building Product Division 2:	Bibinagar Somanypuram Brahmanapally, Bibinagar District Nalgonda – 508126, Andhra Pradesh, India
Glass Division I :	Glass Factory Road, Off Motinagar, P.B No. 1930, Sanathnagar P.O., Hyderabad– 500 018, Andhra Pradesh, India
Tel No.:	91-40-23831771
Fax No.:	91-40-23831787
Glass Division II:	Bibinagar Trading Division: Survey No.17, Beside Aruna Teja Castings, Bibinagar, District Na Nalgonda – 508126, Andhra Pradesh, India
Trading Division I:	Bahadurgarh Trading Division: Nahra Nahari Road, Bahadurgarh, District Jhajjar – 124507, Haryana, India
Trading Division II:	Tikri Trading Division: P O Tikri Kalan, DelhiRohtak Road, Delhi – 110041, India
Faucet Plant:	G 470-471, Phase I, RIICO Industrial Area, Bhiwadi - 131019, Rajasthan, India
Evoke Stores:	Located at: · Delhi · Haryana · Uttar Pradesh
Regional Offices:	Located at: · Bangalore · Chennai · Ernakulam · Mumbai · Pune · Secunderabad

DIRECTORS

As on 31.03.2010

Name :	Mr. R. K. Somany
Designation :	Chairman and Managing Director
Qualification :	B. Com, FI (Cem), FBIM (UK), LFIMA
Date of Appointment :	09.01.1988
Name :	Mr. Sandip Somany
Designation :	Joint Managing Director
Qualification :	B. Com, Diploma in Ceramics
Date of Appointment :	11.11.1994
Name :	Mr. Ashok Jaipuria
Designation :	Director
Qualification :	Degree Holder in Associate of Arts in Business Administration
Date of Appointment :	15.05.2004
Name :	Mr. Binay Kumar
Designation :	Director
Qualification :	BSC
Date of Appointment :	21.09.1996
Name :	Mr. N. G. Khaitan
Designation :	Director
Qualification :	B. Com, LLB, Bar at Law From Kolkata High Court
Date of Appointment :	29.06.1996
Name :	Mr. S B Budhiraja
Designation :	Director
Qualification :	BSC (Hons), BE Mechanical, FIMC
Date of Appointment :	30.10.2003
Name :	Mr. Vishal Marwaha
Designation :	Director
Qualification :	Chartered Accountant
Date of Appointment :	14.07.2005
Name :	Mr. V K Bhandari
Designation :	Director
Name :	Mr. G L Sultania
Designation :	Director

KEY EXECUTIVES

Name :	Mr. G. L. Sultania
Designation :	Executive Director and Secretary
Qualification :	Chartered Accountant and Secretary
Name :	Ms. Ruchika Gupta
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As On (31.12.2010)

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	5,527,719	8.37
Bodies Corporate	28,160,434	42.64
Sub Total	33,688,153	51.01
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	33,688,153	51.01
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	2,671,547	4.04
Financial Institutions / Banks	21,250	0.03
Insurance Companies	40,500	0.06
Foreign Institutional Investors	14,255,978	21.58
Sub Total	16,989,275	25.72
(2) Non-Institutions
Bodies Corporate	2,436,714	3.69
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	6,427,293	9.73
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	370,488	0.56
Any Others (Specify)	6,134,472	9.29
Non Resident Indians	128,370	0.19
Foreign Corporate Bodies	6,004,600	9.09
Trusts	1,502	-
Sub Total	15,368,967	23.27
Total Public shareholding (B)	32,358,242	48.99
Total (A)+(B)	66,046,395	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
(1) Promoter and Promoter Group	-	-
(2) Public	-	-
Sub Total	-	-
Total (A)+(B)+(C)	66,046,395	-

BUSINESS DETAILS

Line of Business :

Manufacturing, Export and Trader of Sanitaryware and Fittings, Plaster of Paris, Refractories etc.

Products :

Product Description	Item Code No.
Sanitaryware	6910-10
Glass Bottles	7010-90

Brand Names :

Sanitaryware: Hindware, Hindware Art, Hiondware Italian Collection, Keramag

Container Glass: AGI

Exports :

Products :

• Sanitaryware
• Container Glass

Countries :

• Lebanon
• New Zealand
• Yemen
• Cyprus
• Mozambique
• Jordan
• Europe
• UK
• Australia
• South Africa
• Middle East
• Indonesia
• Bhutan
• Sri Lanka
• Philippines

Imports :

Products :

• Sanitaryware
• Sanitaryware (Keramag)

Countries :

• China
• Finland

Terms :

Selling :

Credit (30-60 days)

Purchasing :

Credit (30-60 days)

PRODUCTION STATUS (as on 31.03.2010):-

Particulars	Unit	Installed Capacity	Actual Production
Sanitary Ware , Fitting and other allied products	MT	28000	23167
Plaster of Paris	MT	3000	466
Refractories	MT	1200	--
Zirconium Opacifier	MT	600	--
Hear Rings	Nos	500000	100650
Acide Resistant Tiles	Nos	650000	--
Glass bottles / Containers	Lac Pcs.	16431	11756
Crystal Ware	MT	--	--

GENERAL INFORMATION

Customers :

• Amrutanjan Limited
• Glaxo India Limited
• Parke-Davis India Limited
• Ranbaxy Laboratories Limited
• Smithkline Beecham Pharmaceuticals (India) Limited
• TTK Pharma Limited
• Cadbury (India) Limited
• Hindustan Lever Limited
• Smithkline Beecham Consumer Healthcare Limited
• Coca Cola India
• Pepsi India
• Mcdowells and Company Limited
• Maharashtra Distillery Limited
• Shaw Wallace and Company Limited
• United Breweries Limited

No. of Employees :

7000 (approximately)

Bankers :

• Central Bank of India, Kolkata, West Bengal.
• Andhra Bank, Kolkata, West Bengal.
• Bank of Baroda, Kolkata, West Bengal.
• Canara Bank
• Citibank N.A
• Dhanalakshmi Bank
• DBS Bank
• Standard Chartered Bank
• The Hongkong and Shanghai Banking Corporation

Facilities :

SECURED LOANS	31.03.2010 (Rs. in millions)
From Bank
Cash credit accounts	67.150
Buyers credit (Secured by hypothecation of stocks and book debts and further secured by second charge on all the fixed assets located at Bahadurgarh, Bibinagar and Sanathnagar).	215.213
Term loans from Bank (Term loans of Rs. 153.231 Millions [Previous year Rs. 465.365 Millions] are payable within one year)	2819.770
Car finance loans from banks (Secured by hypothecation of vehicles financed out of proceeds of loans) (Amount payable within one year Rs. 0.447 Million (previous year Rs. 1.416 Milion)	0.531
Total	3102.664
*Notes:- 1) Term loan includes External Commercial Borrowings (ECB) loans of Hongkong and Shanghai Bank Corporation, CITI Bank and Standard Chartered Bank are secured by way of hypothecation of the whole of fixed assets including movable plant and machinery, machine spares, tools and accessories (both present and future) pertaining to the glass divisions of Company located at Sanathnagar and Bhongir and further secured by first pari-passu charge by way of mortgage of deposit of title deeds of immovable properties of glass divisions of the Company located at Sanathnagar and Bhongir. 2) Rupee term loan from : 1. Andhra Bank: Term loan is secured by way of hypothecation of the whole of fixed assets including movable plant and machinery, machine spares, tools and accessories (both present and future) pertaining to the ceramic division of Company located at Bibinagar, District Nalgonda, Andhra Pradesh and secured by first pari-passu charge by way of mortgage of deposit of title deeds of immovable properties of ceramic division located at Bibinagar, District Nalgonda, Andhra Pradesh and Gurgaon office of the Company. 2. Dhanalakshmi Bank Limited: Term loan is secured by way of hypothecation of the whole of fixed assets including movable plant and machinery, machine spares, tools and accessories (both present and future) pertaining to the ceramic division of Company located at Bahadurgarh, District Jhajjar, Haryana and further to be secured by first pari-passu charge by way of mortgage of deposit of title deeds of immovable properties of ceramic division of the Company located at Bahadurgarh, District Jhajjar, Haryana. 3. DBS Bank Limited: Term loan is secured by way of hypothecation of the whole of vacant freehold land located at Sitarampur, Isnapur, PO Medak District, Andhra Pradesh, near Hyderabad and further to be secured by first pari-passu charge by way of mortgage of deposit of title deeds of the Company.

UNSECURED LOANS	31.03.2010 (Rs. in millions)
Short term
Trade deposits from dealers	73.656
From banks:
Commercial paper	800.000
Short Term Loans	600.000
Deferred Sales Tax credit	315.255
Total	1788.911

Notes:

• Maximum amount outstanding on commercial paper during the year Rs. 500 million (previous year Rs.600 million).
• The amount of deferred sales tax credit is subject to assessment by sales tax authorities.
• As per agreement with Commercial Tax Department, Hyderabad deferred sales tax credit relating to the Glass Division amounting to Rs.108.26 million (previous year Rs.106.82 million) is secured against the moveable and immovable properties of the Company. However, the charge is pending registration with the Registrar of Companies, West Bengal.

Banking Relations :

Good

Statutory Auditors :

Name :

Walker Chandiok and Company

Chartered Accountant

Address :

L-41, Connaught Circus, New Delhi – 110001, India

Tel No.:

91-11-23417716

Fax No.:

91-11-23418512

Internal Auditors :

Name :

BDO Consulting Private Limited

Chartered Accountant

Associates/Subsidiaries :

• Textool Mercantile Private Limited
• Bigoo Investments Limited
• Paco Exports Limited
• New Delhi Industrial Promotors and Investors Limited
• Soma Investments Limited
• Soma Plumbing Fixtures Limited
• Somany Pilkingstons
• Ceramic Services Limited
• Hindware Home Retail Private Limited
• 3^rd Floor, 11/B/8 Tewari House, Main Pusa Road, New Delhi – 110005
• (Home Furnishing)

• AGI Glasspack Limited
• 2 Red Cross, Place, Kolkata, India
• (Investment)
• Hindustan Softech Limited
• Hindustan Snacks Limited
• Hindustan Soya Limited
• Hindustan Sugar Mills Limited
• Hindustan Stocks Land Limited
• Hindustan Sanforisers Limited
• Hindustan Storage and Distribution Company Private Limited
• Hindustan Seals Limited
• Hindustan Sponges Iron Electro Steel Private Limited

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
100000000	Equity Shares	Rs. 2 /- each	Rs. 200.000 Millions

Issued Capital :

No. of Shares	Type	Value	Amount
55029333	Equity Shares	Rs.2 /- each	Rs.110.059 Millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
55025508	Equity Shares	Rs.2 /- each	Rs.110.051 Millions
Add:	Forefeited shares		Rs. 0.004 Millions
	Total		Rs. 110.055 Millions

Notes:

*Of the above shares, 24,268,638 equity shares of Rs. 2 each (previous year 24,268,638 equity shares of Rs. 2 each) were allotted as fully paid-up by way of bonus shares by capitalisation of revenue reserves, 67,500 equity shares of Rs. 10 each fully paid-up (now stands split into 337,500 equity shares of Rs. 2 each, previous year 337,500 equity shares of Rs. 2 each ) were issued to the equity shareholders of the erstwhile The Associated Glass Industries Limited pursuant to the scheme of amalgamation and 365,645 equity shares of Rs. 10 each fully paid up (now stands split into 1,828,225 equity shares of Rs. 2 each, previous year 1,828,225 shares of Rs. 2 each fully paid up) were issued to the equity shareholders of the erstwhile Krishna Ceramics Limited pursuant to the scheme of amalgamation.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2010	31.03.2009	31.03.2008
SHAREHOLDERS FUNDS
1] Share Capital		110.055	110.055	110.050
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		4767.514	2395.260	2096.740
4] (Accumulated Losses)		0.000	0.000	0.0000
NETWORTH		4877.569	2505.315	2206.790
LOAN FUNDS
1] Secured Loans		3102.664	4315.054	1215.250
2] Unsecured Loans		1788.911	375.482	803.370
TOTAL BORROWING		4891.575	4690.536	2018.620
DEFERRED TAX LIABILITIES		541.185	423.094	340.980
TOTAL		10310.329	7618.945	4566.390
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		7457.943	4032.358	2338.990
Capital work-in-progress		77.926	1251.510	281.300
INVESTMENT		554.070	427.526	350.100
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1565.867	1469.964	1437.630
	Sundry Debtors	1397.372	1027.730	909.580
	Cash & Bank Balances	162.112	792.719	121.250
	Other Current Assets	4.499	8.323	1.000
	Loans & Advances	722.412	403.082	241.430
Total Current Assets		3852.262	3701.818	2710.890
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	979.487	962.622	973.050
	Other Current Liabilities	479.425	678.329
	Provisions	172.960	153.316	141.840
Total Current Liabilities		1631.872	1794.267	1114.890
Net Current Assets		2220.390	1907.551	1596.000
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		10310.329	7618.945	4566.390

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income from Operations	7887.351	6106.435	5208.380
		Other Income	139.171	91.453	77.640
		TOTAL (A)	8026.522	6197.888	5286.020
Less	EXPENSES
		Goods purchased fro resale	1079.868	954.184
		Personal Cost	823.930	641.506
		Manufacturing, Selling and General Expenses	4761.896	3516.758	4410.540
		Increase/ Decrease in Stock	[187.181]	[42.444]
		Loss of Foreign exchange fluctuations	0.000	115.326
		TOTAL (B)	6478.513	5185.330	4410.540
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		1548.009	1012.558	875.480
Less	FINANCIAL EXPENSES/ INTEREST (D)		400.867	166.364	163.030
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		1147.142	846.194	712.450
Less/ Add	DEPRECIATION/ AMORTISATION (F)		490.381	278.427	263.150
	PROFIT BEFORE TAX (E-F) (G)		656.761	567.767	449.300
Less	TAX (H)		132.490	166.247	163.970
	PROFIT AFTER TAX (G-H) (I)		524.271	401.520	285.330
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		1164.753	916.236	NA
Less	APPROPRIATIONS
		Transfer to General Reserve	60.000	50.000	NA
		Proposed Dividend on Equity Shares	110.051	88.041	NA
		Tax on Proposed dividend	18.703	14.962	NA
	BALANCE CARRIED TO THE B/S		1500.270	1164.753	NA
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	197.549	268.659	NA
	TOTAL EARNINGS		197.549	268.659	NA
	IMPORTS
		Raw Materials	466.861	307.883	205.030
		Stores & Spares	82.209	27.895	33.370
		Capital Goods	143.205	8.445	141.690
		Others	344.153	306.146	226.220
	TOTAL IMPORTS		1036.428	650.369	606.310
	Basic/ Diluted Earnings Per Share (Rs.)		9.53	7.30	5.21

QUARTERLY RESULTS

PARTICULARS	30.06.2010 1^st Quarter	30.09.2010 2^nd Quarter	31.12.2010 3^rd Quarter
Net Sales	2173.100	2219.900	2812.400
Total Expenditure	1772.900	1770.800	2188.200
PBIDT (Excl OI)	400.200	449.100	624.200
Other Income	3.100	2.700	4.600
Operating Profit	403.300	451.800	628.800
Interest	95.700	96.700	82.600
PBDT	307.600	355.100	546.200
Depreciation	126.600	136.100	138.800
Profit Before Tax	181.000	219.000	407.400
Tax	45.700	79.700	131.600
Profit After Tax	135.300	139.300	275.800
Net Profit	135.300	139.300	275.800

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	6.53	6.48	5.40
Net Profit Margin (PBT/Sales)	(%)	8.33	7.66	8.63
Return on Total Assets (PBT/Total Assets}	(%)	5.81	7.34	8.90
Return on Investment (ROI) (PBT/Networth)		0.13	0.23	0.20
Debt Equity Ratio (Total Liability/Networth)		1.34	2.59	0.51
Current Ratio (Current Asset/Current Liability)		2.36	2.06	2.43

LOCAL AGENCY FURTHER INFORMATION

History:

Subject is the largest Indian sanitaryware manufacturer. The company is engaged in the manufacture and distribution of sanitary ware and glass containers primarily in India. They are recognized among the top 300 companies in India, while rated amongst the best 100 small and medium sized companies in the world by the Forbes Magazine. The company is the first company in the Building Materials Industry to be awarded the prestigious ISO 9001, 14001 and OHSAS 18001 certificate. The company operates in two divisions, namely Building Products and Container Glass. The Building Products provides a range of building products comprising sanitary ware, such as Water closets, wash basins, pedestals, squatting pans, urinals, and bidets; accessories, including PVC cisterns and fittings/seat covers; and faucets consisting of showers, kitchen faucets, and bathroom faucets. The Container Glass division provides various glass products to beverage, beer, food, pharmaceuticals, liquor, and chemical industries. The company is headquartered in Gurgaon with four manufacturing units, one located in Bahadurgarh, Haryana, while the other three are located in Andhra Pradesh. The company also possesses six regional offices and 18 depots. Their subsidiaries include AGI Glasspack Limited, Hindware Home Retail Private Limited, HSIL Associates Limited and Halis International Limited HSIL Limited was incorporated in the year 1960 as Hindustan Twyfords Limited by the Somany family (promoter group) in collaboration with Twyfords Limited, UK. The company was formed to introduce vitreous china ceramic sanitaryware in India. In the year 1962, the company commissioned sanitaryware plant at Bahadurgarh. In the year 1969, the company changed their name from Hindustan Twyfords Limited to Hindustan Sanitaryware and Industries Limited In the year 1981, the company diversified into the manufacture of glass containers through the acquisition of Associated Glass Industries Limited In the year 1989, they acquired Krishna Ceramics Limited, manufacturers of Sanitaryware at Bibinagar in Andhra Pradesh. In the year 1999, they installed first state of the art open flame tunnel kiln from UK. In the year 1999, the company acquired Raasi Ceramics at Hyderabad to further strengthen their market share in the South India. In the year 2003, they singed a strategic partnership with Sanitec of Europe to bring in their largest selling European brand 'Keramag' to India. Also, during the year, the company received OHSAS 18001: 1999 certifications and in the year 2004, the company was awarded 'Business Superbrand' by the Super Brand Council. During the year 2004-05, the company introduced several new products and launched new colour shades to meet emerging demand. They launched the 'Hindware' faucets in select Indian locations. The company made a lateral extension by entering the kitchen segment by launching stainless steel kitchen sinks. In September 2004, the Container glass division installed a state-of-the-art, energy-efficient and environment-friendly furnace that has the capability to run production in all three colors - flint, amber and green. During the year 2005-06, the company introduced several new products in the 'Art' and 'Italian' Collection and entered into an outsourced manufacturing relationship for a European sanitaryware manufacturer. They increased the manufacturing of their Bibinagar plant by 50% to 18,000 tpa. During the year 2006-07, the company made their investment in two 1.25 MW wind mills in Maharashtra. They signed strategic partnership with 'Teuco' the world leaders in Wellness Products to offer complete range of wellness products in India. They received 'Mera Brand Award' during the year. During the year 2007-08, the company through their subsidiary, Hindware Home Retail Private Limited, forayed into the retail sector. They launched Home Interior Fashion Mega stores providing speciality home interior solutions under the EVOK Brand. They opened their first EVOK store Faridabad, Haryana. In September 4, 2008, the company formed a wholly owned subsidiary company namely HSIL Associated Limited in India and in January 14, 2009, they formed another wholly owned subsidiary company namely, Halis International Limited in Mauritius. In the year 2009, the company set up second green field container glass factory at Bhongir, Andhra Pradesh with a production capacity of 425 tonnes per day. They opened their first brand store 'Hindware Lacasa' at Cochin. They opened their second brand store at Mumbai. Also, they opened EVOK stores at Gurgaon and Ghaziabad. In March 2009, the name of the company was changed to HSIL Limited as the company is known and recognized by their abbreviated name 'HSIL' among the Company's numerous dealers, sub dealers, distributors, bankers, financial institutions and the ultimate users/consumers. In the year 2010, the company acquired the faucet business and operations of Havells India Limited, makers of the Crabtree brand of bath fittings

ANALYSIS OF PERFORMANCE

Following a moderate slowdown, the Indian economy bounced back in 2009 -10. The Government’s fiscal stimulus accelerated the economic recovery and put to rest concerns related to economic stability. In this backdrop, HSIL continued with its robust performance, reporting a significant rise across all operating and performance parameters. In 2009-10, HSIL achieved a 26.70% increase in gross revenue, 37.25% increase in EBITDA, 48.64% increase in cash profit and 30.57% increase in the post-tax profit. The operating margins and net profit margins strengthened to 19.63% and 6.65%, respectively.

The following reasons were the major contributors to this commendable performance:

· Application of differentiated strategy in positioning the Company’s products

· Continuous modification in the product offering, based on the consumer preference and demand

· Increased focus on the value-added product segment

· Rationalisation of energy consumption and other major operational costs

· Undertaking process innovation for better capacity utilisation

· Enhanced production in the Container Glass Division with fully operational activities in the new glass unit at Bhongir

The Company continued to focus on ensuring a strong balance sheet together with a consistently growing Profit and Loss account. The debt equity was maintained at a comfortable 1.25 with a strong interest cover of 3.86. The reserves (excluding Business Reconstruction Reserve) stood at Rs 3790.700 Millions and the total net worth of the Company increased to Rs. 3900.800 Millions.

BUSINESS DIVISION REVIEW

Building product division

Performance In 2009-10

The divisional revenues increased 17.14%, mainly on account of higher realisations from the premium products segment.

Major initiatives

· Acquired business undertaking of Havells India Limited manufacturing and marketing chrome plated brass bathroom fittings to strengthen the product portfolio and develop a new market leadership in this segment

· Organised numerous architects and plumbers meet, covering over 2,500 architects; organized plumber meets reaching out to 10,000 plumbers, to strengthen the post-sale service offering

· Introduced several water-saving green products like four-litre flushing closets and waterless urinals

· Strengthened distribution channel to deepen market reach

· Enhanced production efficiencies through improved in-process innovations

Container Glass Division

Performance In 2009-10

The divisional revenues increased 42.66%, on account of additional sale generated with the fully operational new unit at Bhongir, as well as diversification to premium products to service the varying customer demands.

Major initiatives

· Stabilised operations at the new unit

· Optimised fuel consumption and enhanced productivity through improvement in the operational speed of the machines

· Strengthened quality checks

· Introduced Narrow Neck Press and Blow technology in collaboration with Weigand Glass of Germany, a leading player in glass manufacturing

· Secured and strengthened raw material supplier base

SCHEME OF ARRANGEMENT

A Scheme of arrangement under Section 391-394 of The Companies Act, 1956 (‘the scheme”) between the Company and its equity shareholders was approved by the shareholders at the court convened meeting held on November 7, 2009 and sanctioned by Hon’ble High Court in Calcutta on March 26, 2010.

Under the scheme certain immovable properties in the form of Land and Buildings have been reinstated at their respective fair values as valued by a recognized valuer w.e.f. April 1, 2009, the appointed date for the scheme. The amount of such revaluation being Rs. 2350.000 Millions has been transferred to separate reserve account titled as Business Reconstruction Reserve.

The scheme enables the Company to utilise the Business Reconstruction Reserve for writing off certain expenses as specified therein. The scheme has been given effect to in the accounts for the year ended March 31, 2010.

MANAGEMENT DISCUSSION AND ANALYSIS

In the last fifty years, Hindware has weathered multiple challenges to emerge as a preferred pan-India brand in the bathroom products industry. When they commenced the journey they were into sanitaryware production. gradually they enhanced the footprint across the broad building products segment and also entered the container glass industry. In the building products segment, they pioneered the Vitreous China Single Fired Process in India in the early sixties. They have traversed a long way since. With a response to the evolving consumer preferences, they have enriched the offerings to include value-added products using environment-friendly technologies. The next step was to enhance visibility and to educate the customer about the brand portfolio. They now possess a distribution network of 1,400 authorised dealers; of them nearly 70% exclusively sell Hindware products.

Additionally, there are 12,000 sub-dealers and retail outlets. HSIL’s brand promotion initiatives (outdoor, print and electronic advertisements) educate customers about product strengths and compliance to international quality standards, providing a valuable pre-sale service.

Building Products Division

HSIL’s building products division has concerted focus towards India’s sanitaryware industry, which has enjoyed consistent growth of 10-12% over the last five years. At HSIL, they believe this growth rate is bound to accelerate considering the shortage of housing availability and India’s lower sanitation coverage.

The government has also identified sanitation as one of the key focus areas to improve public health. Thus, there lies an immense growth opportunity for this segment over the coming years. Apart from sanitaryware, the division also offers wellness products, faucets and various kitchen appliances.

HSIL also foresees a positive industry evolution from low-end basic products towards middle- and highend premium segments. The reasons are not far to seek. India’s young earners aspire for a better life style, which is akin to that of advanced countries of the world. The emphasis therefore is on globally benchmarked quality and aesthetic parameters. The new-age customer has become more discerning in terms of quality excellence and less sensitive on price factors. Even bathroom furnishing today has become an important part of home decor. The result: the market is constantly flooded with new designs with emphasis on aesthetics and convenience.

REASONS FOR OPTIMISM

High earnings

At HSIL, they are encouraged by the 10.5% growth in India’s per capita income. It increased to Rs. 44,345 in 2009-10 from Rs. 40,141 in 2008-09. The growth is indicative of the increased spending power of the consumer that will shift the demand to the higher value products, and in some cases generate demand for the product offerings.

Attitudinal shift

The new generation is updated and knowledgeable about the latest designs and offerings in the international market. With a rising trend of younger professionals that start earning early in life, the levels of aspirations have increased. There has been a gradual shift in the living standards. The result is that the premium range of sanitaryware and related bathroom products are treated as lifestyle products, leading to a pride of ownership. This attitude augurs well for HSIL, as it will generate additional demand for the high-end wellness products.

Increase in housing demand

India’s housing shortage of 26.53 mn homes (Source: Technical group on Estimation of Housing Shortage) is expected to increase further. The government has the objective of ‘housing for all’ through Public-Private Partnerships (PPP) and joint ventures as well as through exemptions in Floor Space Index (FSI). This will enhance housing demand. With a substantial increase in FDI inflow into the real estate sector, there will be a new growth wave in the construction of new homes, driving the demand for the entire range of the building products.

UP, CLOSE AND PERSONAL WITH HSIL’S BUILDING PRODUCTS DIVISION

Strengths

· Industry leader with 40% share in the domestic organised sanitaryware market

· Diversified presence across sanitaryware, faucets, kitchen appliances, wellness products and most recently ceramic tiles

· Low-cost producer, possessing backward integrated plants in Haryana and Andhra Pradesh

· Extensive product portfolio across each of the product categories

· Largest dealer and distribution network within the building products industry in India

· Significant revenue growth over a long period

· Strong retail presence

· International strategic alliances with globally renowned brands - Keramag and Teuco.

· Strong brand value, with multi-tiered niche brands as part of the Hindware Brand Portfolio

· Pioneer to establish a service division called Hindware Care with guaranteed response in 48 hours

· Among three in the world to have the technology to make vacuum operated ceramic toilets used in ships

Challenges

· Production of high and premium value products

· Strive to further improve quality and efficiency to match international standards

· Drive innovation and increase pace of new product introductions

· Enhance employee motivation and loyalty

Opportunities

· Enhance the contribution of premium products for the sanitaryware and faucet businesses

· Tap international markets

· Augment institutional sales

· Acquire overseas and domestic companies with good manufacturing facilities and brands to grow inorganically

· Increase production capacity and geographical penetration by enhancing supply chain

· Introduce other product categories as part of the Hindware brand.

Threats

· Rising competition and entry of new players, including MnCs

· Rise in fuel cost

HIGHLIGHTS 2009-10

Financial

Increased revenue by 17.14% from rs. 3189.200 Millions to Rs. 3735.900 Millions

Escalated average realization of manufactured products by 13.32 % grew EBIT by 31.90% from Rs. 547.600 Millions to Rs. 722.300 Millions

Operational

· Acquired chrome plated bathroom fittings plant of Havells India Limited in rajasthan

· Launched 95 new products organised 25 architect meetings, covering 2,500 architects; and 200 plumber meetings covering 10,000 plumbers

· Introduced several new water saving green products like waterless and sensor based urinals

· Initiated effort to expand the distribution network to establish a dealer in towns with a population of over 50,000.

· Enhanced Bahadurgarh plant’s production efficiency by improving plant processes.

· Strengthened the Hindware Care division to service customers across India;

FUTURE STRATEGIES

Reinforce brand:

To develop unique designs and introduce higher value products for the premium segment reinforcing the brand proposition and strengthening the market leadership.

Strengthen business:

To strengthen business by penetrating deeper into existing markets, exploring opportunities in new markets and increasing realisations by offering high value product ranges.

Augment facilities:

To expand production capacity at Bibinagar and Bahadurgarh facilities through setting up new kilns.

Enrich product range:

To cater to evolving consumer preferences by launching new products in the sanitaryware, faucet, wellness, ceramic tiles and kitchen appliances segments and introduction of new product ranges in the higher value segment.

CONTAINER GLASS DIVISION

HSIL’s container glass division (AGI Glasspack) caters to the glass packaging requirement of liquor, beverage, beer, pharmaceutical and the food industry segments. India’s container glass market has been growing at 8% - 10% over the last few years, driven by growth in end-consumer segments. The liquor and beer industries are the main users of glass containers with 70% contribution, followed by pharmaceuticals (10%), food (10%), carbonated drinks (6%) and cosmetics. The Indianmade foreign liquor (IMFL) segment has been registering a strong 12% CAGR over the past four years. However, India’s per capita consumption of container glass is low at 1.4 kg, compared to Brazil’s 4.8 kg, China’s 5.9 kg and US’s 27.5 kg, indicating a large potential opportunity.

ADVANTAGE GLASS

Alcohol consumption

The alcohol consumption has increased in the recent past due to growing inclination towards social drinking and higher disposable income. This in turn is expected to drive container glass demand.

Pharmaceutical

The Indian pharmaceuticals industry is expected to grow to nearly USD 37 Billion by 2013 from the levels of USD 17 Billion in 2008. glass bottles and moulded vials represent a significant share of packaging medium for cough syrups, tonics, paediatric suspensions, dry powder and liquid injectables.

Moreover, tubular vials and ampoules are finding an extensive acceptance by pharmaceutical companies for their product packaging.

Food

In India, currently 10-12% of all food and beverages are packed in container glasses, vis-à-vis 40-50% in developed economies. With India’s retail food sector expected to grow to around USD 150 Bn by 2025 (from the levels of USD 70 Bn in 2008), the demand for packaging alternatives, especially container glass is expected to grow.

Carbonated drinks

Innovative advertising, celebrity endorsements and attractive packaging fuelled the recovery of the soft drinks industry. Moreover, the fruit-drinks category is growing at 25% annually, one of the fastest in the beverages market. Even sports and energy drinks, with low penetration in India, are expected to grow in the coming years.

UP, CLOSE AND PERSONAL WITH HSIL’S CONTAINER GLASS DIVISION

Strength

· Second largest container glass manufacturer (annual installed capacity is 1,643 million bottles)

· Possesses world’s largest end fired container glass furnace at its newly established Bhongir plant

· Backward integrated with in-house mould-making and raw material processing capabilities.

· Presence in diversified industries like alcohol, beverages, beer, FMCg and pharmaceuticals, among others

· Enviable clientele list including Coca Cola, Dabur, glaxo, HuL, Pepsi, ranbaxy, united Breweries, among others

· Vast product portfolio of glass containers (460 varieties in flint, green and amber)

· Six colour bottle printing facilities available in - house

· Superior technology to produce light-weight bottles in collaboration with one of the world’s high quality container glass manufacturers.

· World class quality products, backed by multistage quality-control system

Challenges

· Sustain low production cost

· Rspond to the rapid change in packaging design

· Introduce high levels of automation in specific process areas.

Opportunity

· Foray into cosmetics and perfumery packaging segment

· Acquisition of quartz mines, further enhancing backward integration

· Tap new markets and customers through capacity enhancements

· Strengthen presence in international markets by augmenting exports

· Transition to gas based fuel to reduce production cost

· Production of lighter weight products

· Foray into other packaging industries

Threats

· Increasing use of cheaper packing options like plastics bottles

· Hike in transport cost rise in raw material cost

· Volatility in fuel prices

· Entry of new players

HIGHLIGHTS, 2009 -10

Financial

• Increased revenue by 42.66% from Rs. 2994.200 Millions to Rs. 4271.500 Millions
• Escalated average realisation by 17.26 %
• Grew EBIT by 44.46% from Rs. 328.600 Millions to Rs. 474.700 Millions

Operational

· Optimised fuel efficiency, reducing fuel consumption per metric tonne of production

· Improved the operational speed of bottle-forming machines, enhancing productivity

· Enhanced the quality of product further by introducing stringent quality check post production and introduction of new state-of-the-art automatic inspection technology

· Developed two-litre bottle for Signature whisky and heavier jars with capacity upto 3 litres

· Implemented light weight technology, collaborating with Wiegand glass, a leading german producer

· Tied-up with raw material suppliers for long term sustainable supplies

FUTURE STRATEGIES

Shift to natural gas:

To procure natural gas connection for the Bhongir as well as Hyderabad plant and shift the fuel from furnace oil to gas.

Greenfield/brownfield expansion:

To establish another greenfield plant for container glass production within a three year period. Expand the current facility at Bhongir with a new setup catering to cosmetics packaging.

Enhance capacity:

To capture wider markets and new market segments.

Strengthen RandD focus:

To develop new products with reference to shape, design, size and weight.

Reinforce intellectual capital:

To focus on overseas engineering training to gain technical knowledge on glass melting, bottle formation, mould designing and good manufacturing practices among other intellectual development activities.

Explore global opportunities:

To develop advanced products to leverage global opportunities.

BOARD OF DIRECTORS

RAJENDRA K SOMANY

Chairman and Managing

Director (Promoter)

· Commerce graduate from St. xavier’s college, Calcutta university.

· Prestigious fellowship of the Institute of Ceramics, u.K. and is a fellow member of Charter Management Institute, Emeritus member of American Ceramic Society and member of Institute of Materials, Minerals and Mining, u.K. and Life Fellow of the All India Management Association (AIMA)

· Rich 55 years working experience

· Assisted the Bureau of Indian Standards to develop quality standards for the Sanitaryware Industry

· Member of Employees State Insurance Corporation (ESIC) and convener of Bureau of Indian Standards sub-committee of Domestic Sanitary Appliances and Accessories

· Former President of the ASSoCHAM, PHD Chamber of Commerce and Industry (PHDCCI) and Employers’ Federation of India

· Past Chairman of Council of Indian Employers

· Founder President of Bahadurgarh Chamber of Commerce and Industry (BCCI)

· Member of the national Executive Committee and Technical Committee of the Indian Plumbing Association

· Chairman of the Hyderabad Chapter of Indian Plumbing Association

· Director since: January 9, 1988

SANDIP SOMANY

Joint Managing Director

(Promoter)

· Commerce graduate and a diploma holder in ceramic manufacturing technology from the uS

· Associated with the ceramics and glass industry for 25 years

· Vice President of PHD Chamber of Commerce and Industry (PHDCCI)

· Member of the Executive Committee of FICCI and Managing Committee of ASSoCHAM and on the governing Council of All India glass Manufacturer’s Association

· Chairman of Indian Council of Sanitaryware Manufacturers (InCoSAMA) and member of Delhi Chapter of the young Presidents’ organization (yPo) and Delhi Achievers round Table

· Director since: november 11, 1994

· Associated with the Company since: october 1, 1985

ASHOK JAIPURIA

Independent Director

· Qualified in business administration and marketing sciences.

· Chairman and CEo of Cosmo Films Limited, an Indian multinational company that manufactures Biaxially oriented Polypropylene (BoPP) Films having its manufacturing locations in India, Europe, Korea and u.S.A. and export presence across more than 50 countries in the World and a consistent Award Winner since 1995

· Chairman of Cosmo Ferrite Limited

· Member of the Executive Committee of the FICCI

· Member of the Board of governors of Indian Institute of Technology (IIT), Patna

· President of The golf Foundation, a chartiable society formed with an objective of helping the under privileged potential golfers in India

· Director since: May 15, 2004

BINAY KUMAR

Independent Director

· Degree in business science

· Chairman of Banaras House Private Limited

· Chairman u.P. Hotel Clarks Limited

· Member of Indo-german Chamber of Commerce and Executive Committee of FICCI

· Life member of Indian national Trust for Art and Cultural Heritage and Confederation of Asian Chamber of Commerce and Industry, Taiwan

· Former President of Federation of Indian Exporters organisation, rotary Club of Delhi Midtown, Indo-American Chamber of Commerce and Industry, Indo-French Chamber of Commerce and Industry, PHD Chamber of Commerce and Industry (PHDCCI), Indo-Polish Chamber of Commerce and Industry

· Member of Company’s Audit Committee

· Director since: September 27, 1996

G.L. SULTANIA

Independent Director

· FCA, FCS, A consultant by profession

· Member of Capital Market Committee of Merchants’ Chamber of Commerce and a member of the Company’s Shareholders/ Investors grievance Committee

· Director since: January 9, 1988

N.G. KHAITAN

Independent Director

· An Attorney-At-Law, notary Public appointed by government of India, practicing in Calcutta High Court and in the Supreme Court of India

· Senior partner at Khaitan and Co., one of the leading law firms in India

· Awarded Bell Chambers gold medal by the Incorporated Law Society,

· High Court, Calcutta for standing first in all the Law examinations Holds the reputation of being a committee member of the Federation of Indian Chambers of Commerce and Industry (FICCI), Vice President of Indian Council of Arbitration, new Delhi and committee member of Bharat Chamber of Commerce, Calcutta

· Director in various other Companies and is a member of Company’s Audit Committee, Shareholders’/ Investors’ grievance and remuneration Committee

· Director since: June 29, 1996

S.B. BUDHIRAJA

Independent Director

· Mechanical engineer from the university of roorkee (now IIT roorkee) received distinguished Alumni Award from IIT roorkee in 2008

· Management Consultant, and Past President of the Institute of Management Consultants of India

· Youngest ever Managing Director of Indian oil Corporation Limited

· Former Managing Director of IBP, Balmer Lawrie and Co. Limited, Indian oxygen Limited and Director of Al Futtaim group, uAE

· Former President, Indian Chamber of Commerce, Kolkata

· Chairman, CII, Eastern region

· Former Executive Director of Management Development Institutev(MDI), gurgaon

· Fellow of the All India Management Association, and the Institute of Management Consultants of India

· Former member of the World Bank team that studied the restructuring of the Haryana power sector

· Senior Advisor for India, to the united nations Secretary general’s office for global Compact

· Chairman of the Company’s remuneration Committee, Shareholders’/ Investors’ grievance Committee, and a member of the Audit Committee

· Director since: october 30, 2003

VISHAL MARWAHA

Independent Director

· A Chartered Accountant associated with renowned international banks and leading private equity investors

· Former Chief representative of HSBC Private Equity Management (Mauritius) Limited for its India dedicated fund prior to joining the Private

· Equity operations of Henderson global Investors

· Member of the Company’s Audit Committee

· Director since: July 14, 2005

V.K. BHANDARI

Independent Director

· FCA, Ex-banker by profession

· Former general Manager of Central Bank of India over 30 years of experience in Banking Industry and had been the Head of Credit, Credit Monitoring, Treasury, Investment, Funds Management,

· Merchant Banking and International Banking Divisions

· Chairman of the Audit Committee and Member of remuneration and Shareholders’/ Investors’ grievance Committee

· Director since: January 17, 2004

CONTINGENT LIABILITIES INCLUDE:

Particulars	31.03.2010 Rs. In Millions
a) Demands raised by the excise authorities against which appeals have been filed	12.428
b) Demands raised by the income tax authorities against which appeals have been filed	18.229
c) Demands made by the sales tax authorities against which appeals have been filed	17.250
d) Bank guarantees outstanding	74.729
e) Guarantees given to a bank for availment of credit facilities by a subsidiary Company for Rs. 132.000 Millions. Amount outstanding as at the year end is:	48.196
f) Claims against the Company not acknowledged as debts	196.420

FIXED ASSETS:

· Land Freehold

· Leasehold Land

· Building

· Leasehold Improvements

· Plant and Machinery

· Office Equipments

· Vehicles

· Computers

· Furniture and Fixtures

OTHER INFORMATION:

Basis of preparation

The financial statements have been prepared to comply with the mandatory Accounting Standards issued by The Institute of Chartered Accountants of India and the relevant provisions of the Companies Act, 1956 (the 'Act'). The financial statements have been prepared under the historical cost convention on an accrual basis. The accounting policies have been consistently applied by the Group and are consistent with those used in the previous year.

Contingent liabilities and provisions

Depending on the facts of each case and after due evaluation of relevant legal aspects, the Company makes a provision when there is a present obligation as a result of a past event -where the outflow of economic resources is probable and a reliable estimate of the amount of obligation can be made. The disclosure is made for all possible or present obligations that may but probably will not require outflow of resources as contingent liability in the financial statements.

As per Website Details:

Profile

Subject has made a humble beginning in 1936, when the Somany's were stockbrokers in Calcutta. But a few years later in 1944, their entrepreneurial spirit led to the setting up of "Somany Glass Works". Then, on the back of this successful venture they set up "Hindustan Glass Works" in 1952 – India's first fully automated, state-of-the-art glass manufacturing unit.

Today, the Somany Group has a diversified range of products encompassing glass containers,   sanitaryware,   bathroom   fittings,

OVERVIEW

Subject is the flagship company of the Somany Group.

Subject was incorporated as Hindustan Twyfords Limited in 1960 by the Somany Group in collaboration with Twyfords, Limited, UK. Established to introduce vitreous china ceramic sanitaryware in India, it has been instrumental in giving the concept of sanitaryware a new meaning

Over the last four decades, Subject has earned respect in the Indian and international markets with its commitment to innovation, unwavering quality and customer satisfaction.

Subject has three strategic businesses - Building Products Division and Container Glass Division (AGI Glasspac).

Some Interesting Facts

Building Products Division

• "Hindware" brand has been recognized as a Super brand consecutively for the last four years.
• More than 40 Million plus satisfied customers, over the world.
• Commands more than 1/3 of the Indian Sanitaryware market share.
• A diversified product basket comprising a range of Sanitaryware, bathroom fittings, bathtubs and whirlpools, and kitchen appliances.
• Recognized amongst the top 300 companies in the country and is also rated amongst the 100 best small and medium sized companies in the world by Forbes Magazine.
• Hindware manufactures ten sanitary ware pieces every two minutes; 310 every hour and 2.7 million each year.
• Possesses the largest distribution network in India's building products industry.
• Institutional customers in the Building Products Division: DLF, Unitech LandT, Raheja's and many more.

Container Glass Division

• AGI Glasspac has a capacity to produce 953 million bottles per annum and the capability to manufacture 400 different products in three colours.
• AGI Glasspac is the second largest manufacturer of Glass Containers in India servicing a broad range of user segments like beverages, liquor, pharma and food.
• Institutional customers in the Container Glass Division are Coca Cola, Pepsi, GlaxoSmithkline, Pfizer, AstraZenca, Ranbaxy, Hindustan Unilever, Priya, Reckitt Benkinser, Seagram, Sab Miller, McDowell, Shaw Wallace and United Breweries among others.

Retail Division (EVOK)

• Made a foray through its subsidiary into retail by launching Home Interior Fashion Mega stores providing speciality home interior solutions with the 'EVOK' brand

Subject, is the first company in the Building Materials Industry to be awarded the prestigious ISO 9001, 14001 and OHSAS 18001 certificate, awarding effective quality management and environment systems.

Subject has its corporate office at Park Centra Gurgaon, supported by 8 regional offices and area offices in all states. HINDWARE Sanitaryware is manufactured at - Bahadurgarh, Haryana (near Delhi) and at Somanypuram, Bibinagar (near Hyderabad) in A.P. AGI. Glasspac Manufacturing plant is located at Hyderabad.

INTERNATIONAL COLLABORATION

KERAMAG the number one selling brand from Europe’s largest bathroom products company Sanitec, is now available in the Indian market. Launched by Hindware, this select range of ultimate bathroom solutions comprises of products that outline modern and timeless designs, developed to entice even the most discerning consumers the world over. Keramag’s ceramic competence, gained through 100 years of experience in ceramics, ensures high quality of performance and longevity of its products. This select bathroom series comes with special features like KeraTect, an innovative glaze to help make cleaning easier. Washbasins and bidets offer the patented Clou waste and overflow system that creates an optically clear and smooth surface for easy cleaning. The wall-hung WC’s and bidets provide increased floor clearance space, dual flush systems for water conservation and removable seats for more hygiene. The range also offers Kerafic invisible fixing system, which guarantees a secure grip as well as fast installation and inspection.

TEUCO

For more than three decades, Teuco has been evolving, innovating and researching the best ways to harness the energy of water for the benefit of people and their well-being. The story characterised by a strong desire to break new ground, by adoption of the best contemporary design solutions for every bathroom interior, and by investment in the most sophisticated technology. A story that has revolutionised the very concept of looking after oneself. One philosophy, and one only, inspires the day-to-day activity of Teuco: the culture of well-being, reflecting the high quality of products and services enjoyed by everyone who chooses to discover the world of Teuco.

UNAUDITED FINANCIAL RESULTS FRO THE QUARTER ENDED 31.12.2010

(Rs. In Millions)

Particulars	Quarter Ended 31.12.2010 Unaudited	Nine months ended 31.12.2010 Unaudited
1. Gross Sales	2974.000	7580.300
Less: Excise Duty	205.200	497.600
(a) Net Sales/ Income from Operations	2768.800	7082.700
(b) Other Operating Income	43.600	122.700
Total Income (a+b)	2812.400	7205.400
2. Expenditure
a) Increase/ decrease in Stock	(162.700)	(463.400)
b) Goods Purchased for resale	437.800	1176.800
c) Consumption of Raw material	487.100	1242.600
d) Employee Cost	292.400	773.000
e) Depreciation	138.800	401.500
f) Power and Fuel	521.400	450.800
g) Other Expenditure	612.200	1602.200
h) Total	2327.000	6133.400
3. Profit from operations before other Income, Interest and Exceptional Items (1-2)	485.400	1072.000
4. Other Income	4.600	10.400
5. Profit before Interest and Exceptional Item (3-4)	490.000	1082.400
6. Interest	82.600	275.000
7. Profit After Interest but before Exceptional Item (5-6)	407.400	807.400
8. Exceptional Items	--	--
9. Profit/ loss Item Ordinary Activities before Tax (7-8)	407.400	807.400
10. Tax Expenses
- Current Tax	79.400	152.000
- Deferred Tax Liability	47.400	172.800
-MAT Credit Adjustments	4.800	(67.800)
11. Profit/ Loss from Ordinary Activities after Tax ( 9-10)	275.800	550.400
12. Prior Period Income Tax and Deferred Tax Adjustments Extraordinary Items (net of tax expenses Rs. Nil)	--	--
13. Net Profit/ loss for the period (11-12)	275.800	550.400
14. Operating Profit (EBIDTA)	625.500	1483.900
15. Cash Profit	452.000	1124.700
16. Paid up Equity Share Capital	132.100	132.100
17. Reserves excluding business recognition Reserve	--	--
18. Basic and Diluted Earning Per Share (Rs.)
- Before prior period deferred tax adjustments and extra ordinary items for the Period ( Not annualized)	4.21	9.41
- After Prior period deferred tax adjustment and extra items for the period (not anualise) (Rs.)	4.21	9.41
19. Public Shareholding
- No. of Shares	32358242	32358242
- Percentage of Shareholding	48.99	48.99
20. Promoters and promoters group shareholding
a) Pledged / Encumbered
- Number of Shares	Nil	Nil
- Percentage of shares ( as a % of the total shareholding of promoter and promoter group)	Nil	Nil
- Percentage of Share (as a % of the total share capital of the company)	Nil	Nil
b) Non - Encumbered
- Number of Shares	33688153	33688153
- Percentage of shares ( as a % of the total shareholding of promoter and promoter group)	100	100
- Percentage of Share (as a % of the total share capital of the company)	51.01	51.01

SEGMENT WISE REVENUE, RESULTS AND CAPITAL EMPLOYED

(Rs. In Millions)

Particulars	Quarter Ended 31.12.2010 Unaudited	Nine months ended 31.12.2010 Unaudited
1. Segment Revenue
a) Building Products	1294.400	3608.500
b) Container Glass	1516.900	3886.300
c) Others	1.100	10.600
Total	2812.400	7205.400
Less: Inter Segment Revenue	--	--
Net Sales/ Income from Operations	2812.400	7205.400
2. Segment Results: Profit/ Loss (Before tax and interest)
a) Building Products	278.000	726.700
b) Container Glass	275.100	506.900
Total Profit before unallocable expenditure	553.100	1233.600
Less: Interest	82.600	275.000
Less: Unallocable Expenditure
Net of unallocable Income	63.100	151.200
Total Profit Before Tax	407.400	807.400
3. Capital Employed:
a) Building Products	4411.200	4411.200
b) Container Glass	5553.300	5553.300
c) Others	1402.400	1402.400
Total	11366.900	11366.900

Notes:

1. company has allotted 11020887 equity shares of Rs. 2 each under QIP issue at a price of Rs. 1361.000 million aggregating to Rs. 1499.900 millions on 06.10.2010 to qualified institutional buyers (QIBs). These new shares have been listed on both BSE and NSE, and trading permission also received on 06.10.2010. the funds so raised (net of issue expenses of Rs. 47.500 millions) have been temporarily utilized to refuce working capital utilization from Banks amounting to Rs. 1252.500 millions and balance has been invested to debt schemes of mutual funds.
2. EPS has been calculated on increased number of shares post QIP for the quarter and nine months ended 31.12.2010.
3. Board of Directors have approved capex plan of Rs. 6500.000 millions (including earlier approval) Rs. 2000.000 millions for Saniaryware manufacturing capacity expansions Rs. 1000.000 millions for Faucet manufacturing capacity expansion and Rs. 3500.000 millions for Glass division expansion.
4. There was no investors complaint pending at the beginning of the quarter, fifteen complaints were received during the quarter and were duly resolved.
5. Previous year’s period’s figures have been re-grouped/ re-arranged, wherever considered necessary.
6. The statutory Auditors of the company have carried out a limited review of unaudited financial results for the quarter ended 31.12.2010.
7. The above financial results have been reviewed by the Audit Committee at its meeting held on 31.01.2011 and approved by the Board of Directors at its meeting held on the same day.

PRESS RELEASES:

New Delhi, 11.03.2011: HSIL Limited, the group behind India’s leading sanitaryware brand – Hindware, announced the introduction of 3D Travertino tiles collection. A part of Hindware’s Italian Collection- these 3D glazed vitrified wall and floor tiles promise to lend a whole new dimension to modern living spaces. These tiles are exclusively imported by HSIL Limited from different manufacturing hubs like Brazil and come in elegant designs that are created using state-of-the-art manufacturing technology.

Hindware’s gorgeous collection of the 3D Travertino tiles offers exceptional features that enhance the appeal and give the desired look to floors and walls. A key element of these unique 3D tiles collection is that it offers ‘Infinity Design’ - unlimited image variations that give a more natural aspect to the covering. The 3D image printed on the ceramic tiles follows the entire surface, with high and low relief embossing that adds more depth and character to tile designs.

The 3D Travertino tiles exude sophistication in design and with the added advantage of 3D imagery, these tiles are a visual delight and an ideal choice for walls and floors. Available in the unique size of 45 x 90 cms, the 3D Travertino tiles come in 3 varieties- Travertino HD, Travertino HD Ludo and Luna.

Mr. Sandip Somany, Joint Managing Director, HSIL Limited said, “Hindware is one of the most prestigious and trusted brands in the sanitaryware segment across millions of Indian households. Having recently forayed into the tiles segment, it gives me immense pleasure to announce the addition of new 3D Travertino tiles from Hindware’s Italian Collection. We as a company, are committed to provide our customers with the best of designs, quality, innovations and price. The new 3D tiles collection is bound to lend the desired contemporary feel to living spaces of our customers. These tiles are carefully sourced from different centers across the globe use advanced technology and processes to produce the final premium product. We hope to keep rolling out more such innovative products from our tiles division and delighting our customers time and again.”

Making it one of the most trusted names amongst millions of households across India, some of the long list of Hindware’s recognitions include: ‘The Largest Ceramic and Sanitaryware Company’ at Construction World Annual Awards 2010, ‘India´s 100 Most Valuable Brands’ by 4Ps magazine and ICMR, CII- Godrej GBC award for ’The Most Innovative Water Saving Products’ 2010, Elle DECO International Design Award 2010, ‘Business Superbrand 2010’, ‘Power Brands of India’ award 2010, ‘Golden Peacock Innovation Award 2011’ and many more.

About HSIL Limited

HSIL Limited is the largest Indian manufacturer of sanitary ware products, with a dominant market share of over 42% in the industry. HSIL’s portfolio of products includes Building products & Container Glass in addition to the international brands such as TEUCO and Keramag, all of which enjoy great popularity with consumers. HSIL Limited products are available across the length and breadth of the country and are supported by over 1400 direct dealers and 12000 sub dealers HSIL Limited was the first Company in India to manufacture Vitreous China Sanitaryware.

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.44.20
UK Pound	1	Rs.72.26
Euro	1	Rs.63.90

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	8
--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		69

This score serves as a reference to assess SC’s credit risk and to set the amount of credit to be extended. It is calculated from a composite of weighted scores obtained from each of the major sections of this report. The assessed factors and their relative weights (as indicated through %) are as follows:

Financial condition (40%) Ownership background (20%) Payment record (10%)

Credit history (10%) Market trend (10%) Operational size (10%)

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	Capability to overcome financial difficulties seems comparatively below average.	Small
11-25	Ca	Adverse factors are apparent. Repayment of interest and principal sums in default or expected to be in default upon maturity	Limited with full security
<10	C	Absolute credit risk exists. Caution needed to be exercised	Credit not recommended
-	NB	New Business	-

PRIVATE & CONFIDENTIAL : This information is provided to you at your request, you having employed MIPL for such purpose. You will use the information as aid only in determining the propriety of giving credit and generally as an aid to your business and for no other purpose. You will hold the information in strict confidence, and shall not reveal it or make it known to the subject persons, firms or corporations or to any other. MIPL does not warrant the correctness of the information as you hold it free of any liability whatsoever. You will be liable to and indemnify MIPL for any loss, damage or expense, occasioned by your breach or non observance of any one, or more of these conditions

This report is issued at your request without any risk and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its officials.