MIRA INFORM REPORT

Report Date :

26.08.2011

IDENTIFICATION DETAILS

Name :	PONDY OXIDES AND CHEMICALS LIMITED
Registered Office :	KRM Centre, 4^th Floor, #2, Harrington Road, Chetpet, Chennai 600031, Tamil Nadu
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	21.03.1995
Com. Reg. No.:	030586
Capital Investment / Paid-up Capital :	Rs.101.071 Millions
CIN No.: [Company Identification No.]	L24294TN1995PLC030586
TAN No.: [Tax Deduction & Collection Account No.]	CHEP02071G
Legal Form :	Public Limited Liability Company. The Company’s Shares are Listed on Stock Exchange
Line of Business :	Manufacturer of metallic oxides and plastic additives producers.
No. of Employees :	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (45)

RATING		STATUS	PROPOSED CREDIT LINE
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory

Maximum Credit Limit :	USD 1014400
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an established company having satisfactory track. Trade relations are reported as fair. Business is active. Payments are reported to be usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

NOTES :

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

ECGC Country Risk Classification List – 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

LOCATIONS

Registered Office:	KRM Centre, 4th Floor, #2, Harrington Road, Chetpet, Chennai 600031, Tamil Nadu, India
Tel. No.:	91-44-42965454/6/26631690
Fax No.:	91-44-42965455
E-Mail :	pondyoxides@yahoo.com
Website :	www.pocl.co.in
Factory :	F-14, “Mahaveer Chamber” 103, Nainiappa Naicken Street, Park Town, Madras – 600003, Tamilnadu, India
Tel. No.:	91-44-25352339/25353444
Fax No.:	91-44-25354797
Corporate Office :	No.309, Poonamallee High Road, Natarajan Bay City Centre, 2^nd Floor, Kilpauk, Chennai – 60010, Tamilnadu, India
E-Mail :	yvr@pocl.co.in

DIRECTORS

AS ON 31.03.2010

Name :	Mr. Padam Chandra Bansal
Designation :	Chairman
Name :	Mr. Anil Kumar Bansal
Designation :	Managing Director
Name :	Mr. D P Venkataraman
Designation :	Vice Chairman
Name :	Mr. Sunil Kumar Bansal
Designation :	Whole Time Director
Name :	Mr. Devakar Bansal
Designation :	Whole Time Director
Name :	Mr. R P Bansal
Designation :	Whole Time Director
Name :	Mr. Y V Raman
Designation :	Whole Time Director
Name :	Mr. Sudhir Kumar Gupta
Designation :	Director
Name :	Mr. Anil Kumar Sachdev
Designation :	Director
Name :	Mr. Kamlesh Balkrishna Haribhakti
Designation :	Director
Name :	Mr. Harish Kumar Lohia
Designation :	Director
Name :	Mr. P N Sridharan
Designation :	Director
Name :	Mr. Ashish Bansal
Designation :	Director

KEY EXECUTIVES

Name :	Mr. K Kumaravel
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

AS ON 30.06.2011

Category of Shareholder	Total No. of Shares	% of total No. of Shares
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	3,226,204	31.92
Bodies Corporate	252,068	2.49
Sub Total	3,478,272	34.41
(2) Foreign
Any Others (Specify)	425,626	4.21
Directors/Promoters & their Relatives & Friends	425,626	4.21
Sub Total	425,626	4.21
Total shareholding of Promoter and Promoter Group (A)	3,903,898	38.63
(B) Public Shareholding
(1) Institutions
(2) Non-Institutions
Bodies Corporate	824,520	8.16
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 million	3,749,079	37.09
Individual shareholders holding nominal share capital in excess of Rs. 0.100 million	1,256,540	12.43
Any Others (Specify)	373,088	3.69
Clearing Members	12,597	0.12
Directors & their Relatives & Friends	7,942	0.08
Hindu Undivided Families	292,726	2.90
Non Resident Indians	59,823	0.59
Sub Total	6,203,227	61.37
Total Public shareholding (B)	6,203,227	61.37
Total (A)+(B)	10,107,125	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)	10,107,125	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of metallic oxides and plastic additives producers.

GENERAL INFORMATION

No of Employee:	Not Available
Bankers :	Not Available
Facilities :	--

Banking Relations :	--
Auditors :
Name :	Jeeravla and Company Chartered Accountant
Associates/Subsidiaries :	--

CAPITAL STRUCTURE

AS ON 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
11500000	Equity Shares	Rs.10/- each	Rs.115.000 Millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
10107125	Equity Shares	Rs.10/- each	Rs.101.071 Millions

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		101.100	101.100	101.100
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		152.500	109.600	127.400
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		253.600	210.700	228.500
LOAN FUNDS
1] Secured Loans		396.600	229.800	184.500
2] Unsecured Loans		30.700	27.600	13.100
TOTAL BORROWING		427.300	257.400	197.600
DEFERRED TAX LIABILITIES		6.300	5.900	5.100
TOTAL		687.200	474.000	431.200
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		170.700	129.800	138.200
Capital work-in-progress		4.500	1.600	10.500
INVESTMENT		29.700	29.700	8.200
DEFERREX TAX ASSETS		3.200	2.000	1.200
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	235.800	72.800	89.900
	Sundry Debtors	202.600	146.200	195.000
	Cash & Bank Balances	36.300	112.200	32.100
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	127.000	48.100	84.200
Total Current Assets		601.700	379.300	401.200
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	0.000	0.000	0.000
	Other Current Liabilities	84.000	51.900	82.500
	Provisions	38.600	16.500	45.600
Total Current Liabilities		122.600	68.400	128.100
Net Current Assets		479.100	310.900	273.100
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		687.200	474.000	431.200

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	1494.700	1084.000	1352.000
		Other Income	8.700	27.700	6.500
		TOTAL (A)	1503.400	1111.700	1358.500
Less	EXPENSES
		Raw Materials	1251.500	878.500	1051.200
		Power and Fuel Cost	53.200	45.900	36.700
		Employee Cost	37.300	32.900	22.300
		Other Manufacturing Expenses	55.600	33.800	27.400
		Selling and Administrative Expenses	63.400	69.700	100.100
		Miscellaneous Expenses	3.600	2.100	2.200
		Increased/Decreased in Stocks	(96.900)	2.400	(16.600)
		TOTAL (B)	1367.700	1065.300	1223.300
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		135.700	46.400	135.200
Less	FINANCIAL EXPENSES (D)		45.700	37.400	40.500
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		90.000	9.000	94.700
Less/ Add	DEPRECIATION/ AMORTISATION (F)		15.900	16.000	14.800
	PROFIT BEFORE TAX (E-F) (G)		74.100	(7.000)	79.900
Less	TAX (I)		16.900	4.900	28.400
	PROFIT AFTER TAX (G-I) (J)		57.200	(11.900)	51.500
	Earnings Per Share (Rs.)		5.45	--	--

QUARTERLY RESULTS

PARTICULARS	30.06.2010	30.09.2010	31.12.2010	31.03.2011	30.06.2011
	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter	5^th Quarter
Net Sales	600.340	610.020	639.250	731.720	680.320
Total Expenditure	569.460	574.600	608.810	689.800	645.510
PBIDT (Excl OI)	30.880	35.420	30.440	41.920	34.810
Other Income	4.350	3.430	2.300	3.140	5.480
Operating Profit	35.230	38.850	32.740	45.060	40.290
Interest	10.240	12.340	13.640	16.760	12.510
Exceptional Items	0.000	0.000	0.000	0.000	0.000
PBDT	24.990	26.510	19.100	28.300	27.780
Depreciation	4.950	5.110	5.130	6.780	5.970
Profit Before Tax	20.040	21.400	13.970	21.52	21.810
Tax	6.010	6.420	2.530	8.120	6.760
Provisions and contingencies	0.000	0.000	0.000	0.000	0.000
Profit After Tax	14.030	14.980	11.440	13.400	15.050

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	3.80	(1.07)	3.79
Net Profit Margin (PBT/Sales)	(%)	4.95	(0.65)	5.90
Return on Total Assets (PBT/Total Assets}	(%)	9.59	(1.37)	14.81
Return on Investment (ROI) (PBT/Networth)		0.29	(0.03)	0.35
Debt Equity Ratio (Total Liability/Networth)		2.16	1.55	1.43
Current Ratio (Current Asset/Current Liability)		4.90	5.54	3.13

LOCAL AGENCY FURTHER INFORMATION

SUBSIDIARIES

The company as of March 31, 2010 had two subsidiaries Baschem Pharma Limited and Lohia Metals Private Limited.

Ministry of Corporate Affairs, Government of India has granted approval that the requirement to attach various documents in respect of subsidiary companies, as set out in sub-section [1] of Section 212 of the Companies Act, 1956, shall not apply to the Company. Accordingly, the Balance Sheet, Profit and Loss Account and other documents of the subsidiary companies are not being attached with the Balance Sheet of the Company. Financial information of the subsidiary companies, as required by the said approval, is disclosed in the Annual Report. The company will make available the Annual Accounts of the subsidiary companies and the related detailed information to any member of the Company who may be interested in obtaining the same. The annual accounts of the subsidiary companies will also be kept open for inspection at the Registered Office of the Company and at the respective offices of the subsidiary companies. The consolidated Financial Statements presented by the company include financial results of its subsidiary companies.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

INDUSTRY STRUCTURE AND DEVELOPMENTS

The financial year 2009-10 began amidst global financial slowdown. There were grave uncertainties and the sentiment was very weak. In Indian context, there was added uncertainty due to sub-normal south-west monsoon. To counter these negatives, the Indian Government implemented fiscal stimulus packages on public projects. The Reserve Bank of India took a number of monetary easing and liquidity enhancing measures. As a result, India weathered these crises well and as an economy, it is better placed than it was three/four quarters ago. The advance estimate of the GDP growth for 2009-10 is > 7.2%. This recovery was achieved despite a negative growth in the agricultural sector. Manufacturing sector was the growth-driver for this recovery.

COMPANY OVERVIEW

During the year under review, on quarter to quarter basis, we have consolidated our operation by increasing capacity of lead smelting and zinc refining plant. Exports during the year were at Rs.5088.48 Lakhs - substantially higher by 206% over the previous year. The indigenous base for metal products was also widened during the year.

OUTLOOK

The global demand supply mismatch begot several benefits to the company in terms of better inventory planning, scaling new benchmarks in terms of production and sales of lead and zinc metal. The Company continues to make investments in technology to improve product quality and output. We have been vigilant to retrospect, to concentrate and to strengthen our competitive advantages. The year gone by has proved to be a year of uncertainty and volatility leading to an economic downturn with severe and widespread global impact.

An independent Research agency has reported that due to the sudden increased demand for lead-acid batteries as a derived demand from its user [automobile] sector, the demand for refined lead has increased. The lead-acid battery industry accounts for approx. eighty five percent of total demand for lead. Also demand from information technology and telecom sector which mainly use lead-acid batteries also increased which further intensified the demand for lead. The Chemical industry uses lead in lead based pigments and other compounds which was also another factor for increase in demand for lead. In 2009, lead prices firmed up and showed an increasing trend towards the end of the year. In 2009 there was expectation that lead production would be cut by zinc miners as lead is produced primarily as a by-product of zinc. The pressure from China to buy instead of selling lead largely also factored in for its prices firming up. Further, the reduced level of LME inventory and tight supply supported the high prices.

However, effective steps are envisaged for cost optimisation to reduce its impact and grow. The outlook seems to be of cautious optimism for the current year as well as for the next year.

RISKS AND CONCERNS

POCL is a unique combination of a play on global economic recovery through its Lead Smelting and Zinc Refining Business. While demand for metal products is expected to be better over a couple of years, capacity addition is expected to match the demand growth.

Last year one of the biggest challenges for the company was the consolidation of the units by maximizing the capacity utilization and minimizing the cost of production through proper planning and product mix.

The Company operates both in the domestic market and overseas. There is exposure to foreign exchange risks. Apart from normal business risks, there exist major risks and concerns of volatility in global economies, slowdown in Indian economy and increase in costs of inputs as applicable to Industry. Continuous process improvement and cost reduction through re-engineering of production process to counter these risks has been adopted across the organisation. The Company complies with safety norms and has adequate insurance coverage for all assets.

UN-AUDITED FINANCIAL RESULTS (PROVISIONAL) FOR QUARTER ENDED 30.06.2011

(Rs. in millions)

Particulars	3 Months Ended	Year ended 31.03.2011
	Unaudited	Audited
Net Sales/ Income from Operations	716.906	2709.999
Expenditure
Increase/(Decrease) in stock in trade and work in progress	31.647	14.623
Consumption of Raw Materials	567.597	2128.795
Purchases of Trading Goods	0.000	24.109
Employees Cost	11.368	46.926
Depreciation and Amortization	5.967	22.557
Excise Duty	36.585	150.220
Other Expenses	34.904	190.443
Total	688.068	2577.673
Profit from operations before Other Income, Interest and Exceptional Items (1-2)	28.838	132.326
Other Income	5.484	11.895
Profit before Interest and Exceptional Items (3+4)	34.322	144.221
Interest	12.512	60.940
Profit after Interest but before Exceptional Items (5-6)	21.809	83.281
Exceptional Items	0.000	0.000
Profit (+)/ Loss (-) from Ordinary Activities before tax (7+8)	21.809	83.281
Tax expense	6.761	27.485
Net Profit (+)/ Loss (-) from Ordinary Activities after tax (9-10)	15.049	55.796
Extraordinary Items (Net of tax expense)	0.000	0.000
Net Profit (+)/ Loss (-) for the period	0.000	0.000
Paid-up equity share capital (Face value of Rs.10/- each)	101.071	101.071
Reserves excluding Revaluation Reserves as per balance sheet of previous accounting year	0.000	193.572
Earnings per share
Before Extraordinary items (not annualized)
- Basic (Rs.)	1.49	5.52
- Diluted (Rs.)	1.49	5.52
After Extraordinary Items
- Basic	1.49	5.52
- Diluted	1.49	5.52
Public Shareholding
- No. of shares	6203227	6258654
- Percentage of shareholding	61	62
Promoters and promoter group shareholding
Pledged/ Encumbered
- No. of shares	Nil	Nil
- Percentage of shares (as a % of the total shareholding of promoter and promoter group)	NA	NA
- Percentage of shares (as a % of the total share capital of the company)	--	--
Non-encumbered
- No. of shares	3903898	3848471
- Percentage of shares (as a % of the total shareholding of promoter and promoter group)	39	37
- Percentage of shares (as a % of the total share capital of the company)	--	--

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.46.13
UK Pound	1	Rs.75.52
Euro	1	Rs.66.53

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	NO
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		45

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

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.