MIRA INFORM REPORT

Report Date :

08.06.2011

IDENTIFICATION DETAILS

Name :	NIRMA LIMITED
Registered Office :	Nirma House, Ashram Road, Ahmedabad – 380 009, Gujarat
Country :	India
Financials (as on) :	31.03.2010
Date of Incorporation :	25.02.1980
Com. Reg. No.:	04-3670
Capital Investment / Paid-up Capital :	Rs.795.700 Millions
CIN No.: [Company Identification No.]	L24240GJ1980PLC003670
TAN No.: [Tax Deduction & Collection Account No.]	AHMN00409D
PAN No.: [Permanent Account No.]	AAACN5350K
Legal Form :	A Public limited liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturer and Seller of Synthetic Detergents, Soaps, Chemicals and Allied Products
No. of Employees :	3630 [Approximately]

RATING & COMMENTS

MIRA’s Rating :

Aa (75)

RATING		STATUS	PROPOSED CREDIT LINE
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large

Maximum Credit Limit :	USD 110000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed Fast Moving Consumer Goods (FMCG) company having fine track. Available information indicates high financial responsibility of the company. Financial position of the company is good. Business is active. Payments are always correct and as per commitments. The company can be considered good for business dealings at usual trade terms and conditions.

NOTES :

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

INFORMATION DECLINED BY

Management Non Cooperative

LOCATIONS

Registered Office :	Nirma House, Ashram Road, Ahmedabad – 380 009, Gujarat, India.
Tel. No.:	91-79-27546565 / 74 / 26442187
Fax No.:	91-79-27546603 / 05 / 01
E-Mail :	nirma_corporate@nirma.co.in ndpat@ad1.vsnl.net.in info@nirma.co.in
Website :	http://www.nirma.co.in
Factory :	Ø Block No. 16/B, Ahmedabad-Mehsana Highway, P.O. Mandali, District Mehsana - 382 732, Gujarat, India Ø Village : Moraiya P.O. Chaharwadi Vasna, Near Modern Denim, Bavla Road, Taluka : Sanand, District Ahmedabad – 382 213, Gujarat, India Ø Sector-III, Bagdoon, Pithampur, District Dhar – 454 775, Madhya Pradesh, India Ø Plot No. B/4, Jainpur Industrial Area, Jainpur, District Kanpur Dhar – 209 101, Uttar Pradesh, India Ø Alindra Detergent Complex, P. O. Alindra, Taluka Savli. District Baroda-391 775, Gujarat, India. Ø Bhavnagar Chemical Complex, P. O. Kalatalav, District Bhavnagar -364001, Gujarat, India. Ø Wind Farm: Survey No. 691, Village Dhank, Taluka Upleta, District Rajkot – 360 001, Gujarat, India Ø Survey No. 358-369, Village Sachana, Taluka Viramgam, Dist. Ahmedabad – 382150, Gujarat, India

DIRECTORS

As on 16.08.2010

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

KEY EXECUTIVES

Name :	Mr. Paresh Sheth
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 31.03.2011

Names of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	62447401	39.24
Bodies Corporate	20006500	12.57
Any Others (Specify)	62079800	39.01
Trusts	62079800	39.01
Sub Total	144533701	90.82
(2) Foreign	--	--
Total shareholding of Promoter and Promoter Group (A)
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	30196	0.02
Financial Institutions / Banks	637	0.00
Insurance Companies	29544	0.02
Foreign Institutional Investors	888023	0.56
Sub Total	948400	0.60
(2) Non-Institutions
Bodies Corporate	953890	0.60
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 millions	3299297	2.07
Individual shareholders holding nominal share capital in excess of Rs.0.100 millions	9324950	5.86
Any Others (Specify)
Non Resident Indians	50635	0.03
Overseas Corporate Bodies	31405	0.02
Trusts	3	0.00
Foreign Nationals	1	0.00
Sub Total	13660181	8.58
Total Public shareholding (B)	14608581	9.18
Total (A)+(B)	159,142,282	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued	-	-
Total (A)+(B)+(C)	159,142,282	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer and Seller of Synthetic Detergents, Soaps, Chemicals and Allied Products

Products :

Product Description	ITC Code No.
Synthetic Detergents	34029001
Toilet Soap	34011103
Linear Alkyl Benzene	38171000
Soda ash	28862009

Brand Names :

‘Nirma’

PRODUCTION STATUS (30.03.2010)

Particulars	Unit	Production	Installed Capacity
Synthetic Detergents	Tonnes	560043	*
Alfa Olefin Sulphonate	Tonnes	--	10000
Sulphuric Acid	Tonnes	--	125000
Toilet Soap	Tonnes	58634	170000
Distilled Fatty Acid	Tonnes	--	135000
Glycerine	Tonnes	--	18000
Shampoo	Tonnes	--	2000
Linear Alkyl Benzene	Tonnes	89981	75000
Soda Ash	Tonnes	450294	650000
Single Super Phosphate	Tonnes	--	100000
Packaging	Tonnes	--	13500
Salt	Tonnes	--	1800000
Tooth Paste	Tonnes	--	2000
Caustic Soda	Tonnes	--	87600
(A) Licensed capacity not indicated for all products due to the abolition of industrial licences as per notification No. S.O. 477 (E), Dated 25th July, 1991. (B) * Not Ascertainable. (C) The installed capacity as shown above has been certified by management and not verified by the auditors, being a technical matter.

Note : * Not Ascertainable

GENERAL INFORMATION

No. of Employees :

3630 [Approximately]

Bankers :

• Bank of Baroda
• State Bank of India
• Bank of India
• HDFC Bank Limited
• Credit Lyonnais
• ANZ Grindlays Bank Limited
• Axis Bank Limited
• The Kalupur Commercial Cooperative Bank Limited

Facilities :

Secured Loans :	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
Loans in foreign currency
Long term External Commercial Borrowings (ECBs)	5165.800	5835.100
Short term Packing Credit Buyers Line of Credit	83.600 Nil	Nil 293.900
Short term loans and advances from banks Cash credit accounts	2270.300	1794.700
Term Loans	Nil	2557.500
Total	7519.700	10481.200
External Commercial Borrowings (ECBs) The External Commercial Borrowings are secured by first pari-passu charge on movable plant and machineries situated at Bhavnagar, Gujarat and by pledge of shares of Karnavati Holdings Inc., wholly owned subsidiary, held by the Company. Short Term Loans and Credit Facilities from Banks The short term loans and credit facilities from Banks are secured on pari-passu basis, by a first charge, by way of hypothecation of specified stock of raw materials, stock in process, finished goods, other merchandise being movable, book debts, both present and future and by way of second charge on specified immovable properties, both present and future, of the Company.

Unsecured Loans :	31.03.2010 Rs. in Millions	31.03.2009 Rs. in Millions
Loan from directors	1843.000	Nil
Inter corporate deposits	251.300	668.000
Trade deposits	258.400	188.300
Interest free sales tax deferment loan under sales tax	0.400	0.400
Total	2353.100	856.700

Banking Relations :	-
Auditors :
Name :	Hemanshu Shah and Company Chartered Accountants
Address :	Ahmedabad - 380009, Gujarat, India
Subsidiaries :	Direct Holding · Nirma Consumer Care Limited, Karnavati Holdings Inc. USA Indirect Holding : · Searles Valley Minerals Operations Inc (SVMO) USA, · Searles Valley Minerals Inc.(SVM) USA, wholly owned subsidiaries of Karnavati Holdings Inc USA.
Associates :	· Kargil Holdings Private Limited · Uri Holdings Private Limited · Leh Holdings Private Limited · Banihal Holdings Private Limited · Kulgam Holdings Private Limited · Nirma Credit and Capital Private Limited · Nirma Industries Private Limited · Nirma Chemical Works Private Limited · Saurashtra Chemicals Private Limited · Baeurer Infotech Private Limited · Nefron Private Limited · Mahuva Port and Infrastructure Private Limited · Kanak Castor Products Private Limited · Nirma Education and Research Foundation · Nirma University · Nirma Labs · Trona Export Terminals LLC, USA. · Nirma Capital Private Limited · Nirma Investment Private Limited

CAPITAL STRUCTURE

As on 31.03.2010

Authorised Capital :

No. of Shares	Type	Value	Amount
280000000	Equity Shares	Rs.5/- each	Rs.1400.000 Millions
1000000	6% Redeemable non cumulative non convertible preference shares of	Rs.100/- each	Rs.100.000 Millions
	Total		Rs.1500.000 Millions

Issued, Subscribed Capital :

No. of Shares	Type	Value	Amount
159175666	Equity share	Rs.5/- each	Rs.795.878 Millions

Paid-up Capital :

No. of Shares	Type	Value	Amount
159142282	Equity shares	Rs.5/- each	Rs.795.711 Millions

NOTES:-

1. Of the above shares, 35572914 equity shares of Rs.5 each have been allotted as fully paid up pursuant to the scheme of amalgamation/ scheme of demerger without payment being received in cash.

2. Company has made allotment of 90998368 equity shares of Rs.5 each on exercising option by the warrant holders at a premium of Rs.40 per share (for share of Rs.10 each). 32584 equity shares of Rs.5 each were kept in abeyance due to court order.

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		795.700	795.700	823.600
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		26758.900	25214.700	25026.200
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		27554.600	26010.400	25849.800
LOAN FUNDS
1] Secured Loans		7519.700	10481.200	1825.400
2] Unsecured Loans		2353.100	856.700	2614.000
TOTAL BORROWING		9872.800	11337.900	4439.400
DEFERRED TAX LIABILITIES		3029.100	3056.900	2884.000
TOTAL		40456.500	40405.200	33173.200
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		19161.100	19189.400	19119.600
Capital work-in-progress		2792.400	2430.800	2596.100
INVESTMENT		5357.300	5397.700	458.500
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	5921.500	6002.700	6351.600
	Sundry Debtors	2692.800	2504.900	2163.700
	Cash & Bank Balances	922.900	2135.900	726.300
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	7593.900	5995.900	5008.800
Total Current Assets		17131.100	16639.400	14250.400
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	1936.00	1538.500
	Other Current Liabilities	554.700	360.800	1954.600
	Provisions	1494.700	1352.800	1296.800
Total Current Liabilities		3985.400	3252.100	3251.400
Net Current Assets		13145.700	13387.300	10999.000
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		40456.500	40405.200	33173.200

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2010	31.03.2009	31.03.2008
	SALES
		Income	31179.500	30301.700	23322.100
		Other Income	191.700	87.800	136.500
		TOTAL (A)	31371.200	30389.500	23458.600
Less	EXPENSES
		Consumption of raw materials	12540.200	13988.900
		Purchase of goods traded in	368.700	227.000
		Payments to and provision for employees	1134.500	990.000
		Manufacturing, administrative and selling expenses	11349.900	10494.600	20878.100
		Exceptional Items	89.900	898.600
		Increase/(Decrease) in Stock	(68.000)	(310.800)
		TOTAL (B)	25415.200	26288.300	20878.100
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		5956.000	4101.200	235.500
Less	FINANCIAL EXPENSES (D)		317.200	474.100	79.200
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		5638.800	3627.100	2265.800
Less/ Add	DEPRECIATION/ AMORTISATION (F)		2875.600	2443.800	0.000
	PROFIT BEFORE TAX (E-F) (G)		2763.200	1183.300	2265.800
Less	TAX (H)		383.800	249.000	(31.200)
	PROFIT AFTER TAX (G-H) (I)		2379.400	934.300	2297.000
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		300.600	1140.000	NA
Less	APPROPRIATIONS
		Transferred to capital redemption reserve	0.000	27.900	NA
		Transferred to general reserve	1000.000	1000.000	NA
		Final dividend on preference shares	0.000	1.000	NA
		Proposed dividend on equity shares	716.100	636.6000	NA
		Tax on dividend	119.100	108.200	NA
	BALANCE CARRIED TO THE B/S		844.600	300.600	1140.000
	EARNINGS IN FOREIGN CURRENCY
		Export Earnings	1825.800	1542.800	557.100
		Interest	17.200	0.000	0.000
		Other Earnings	0.000	0.200	0.000
	TOTAL EARNINGS		1843.000	1543.000	557.100
	IMPORTS
		Raw Materials	2580.300	2558.400	2145.000
		Stores & Spares	109.700	255.200	1257.000
		Capital Goods	115.400	197.100	0.000
	TOTAL IMPORTS		2805.400	3010.700	3402.000
	Earnings Per Share (Rs.)		14.95	5.86	13.66

QUARTERLY RESULTS

PARTICULARS	30.06.2010 (1^ST Quarter)	30.09.2010 (2^nd Quarter)	31.12.2010 (3^rdQuarter)	31.03.2011 (4^th Quarter)
Gross Sales	8212.000	7824.300	8021.500	8413.800
Other Operating Income	0.000	0.900	7025.600	7650.000
Other Income	22.600	55.900	995.900	763.800
Total Income	8234.600	7881.100	25.000	81.300
Total Expenditure	6968.100	6624.300	1020.900	845.100
PBIDT	1266.500	1256.800	79.800	77.700
Interest	78.600	78.700	55.300	(219.000)
PBDT	1187.900	1178.100	996.400	548.400
Depreciation	700.700	697.900	696.300	1048.400
Profit Before Tax	487.200	480.200	300.100	(500.000)
Tax	15.000	244.700	30.000	(262.600)
Reported Profit After Tax	472.200	235.500	270.100	(237.400)
Extraordinary Items	0.000	0.000	0.000	0.000
Prior Period Expenses	0.000	0.000	0.000	0.000
Other Adjustments	0.000	0.000	0.000	0.000
Net Profit	472.200	235.500	270.100	(237.400)

KEY RATIOS

PARTICULARS		31.03.2010	31.03.2009	31.03.2008
PAT / Total Income	(%)	7.58	3.07	9.79
Net Profit Margin (PBT/Sales)	(%)	8.86	3.91	9.72
Return on Total Assets (PBT/Total Assets}	(%)	7.61	3.30	6.79
Return on Investment (ROI) (PBT/Networth)		0.10	0.05	0.09
Debt Equity Ratio (Total Liability/Networth)		0.50	0.56	0.30
Current Ratio (Current Asset/Current Liability)		4.30	5.12	4.38

LOCAL AGENCY FURTHER INFORMATION

Details of Sundry Creditors:

Particulars	31.03.2010 (Rs. in millions)	31.03.2009 (Rs. in millions)	31.03.2008 (Rs. in millions)
Sundry creditors
Dues of micro, small and medium enterprises	11.600	7.100	NA
Others [Including Rs.6.400 millions due to subsidiary company Karnavati Holdings Inc.(p.y.Rs.7.500 millions)]	1924.400	1531.400	NA

CONTINGENT LIABILITIES NOT PROVIDED FOR IN ACCOUNTS :-

Particulars (Rs. in millions	31.03.2010	31.03.2009
(A) Claims against the Company not acknowledged as debts
For custom duty For direct tax (*) For sales tax	15.400 13318.700 400.300	14.800 10053.000 196.000
For excise duty and service tax [appeals decided in favour of the Company Rs. 11 80.600 millionss (p.y. Rs.1 077.100 millions)]	1191.400	1114.200
Disputed liabilities for Custom duty and Excise duty of the Demerged Undertaking, as per the Financial Statement of Core Health Care Limited (CHL) as certified by Statutory Auditor of CHL	45.000	45.000
Others This includes the claims not acknowledged as debt of Rs.47.100 millions (p.y. Rs.47.100 millions) of the Demerged Undertaking, as per the Financial Statement of CHL as certified by Statutory Auditor of CHL	96.500	86.300
(*) Income-tax department has raised demands by making various additions/disallowances. The Company is contesting demand, in appeals, at various levels. However, based on legal advice, the Company does not expect any liability in this regard.
Estimated amount of contracts, remaining to be executed, on capital account (Net of payment)	2717.000	3411.100
For letters of credit	1006.700	967.300
For bank guarantee	82.700	28.700
Bills discounted with banks	35.300	0.000
Company has given Corporate Guarantee in favour of lenders for securing loans extended to Karnavati Holdings Inc. and its subsidiaries (wholly owned subsidiaries)	3841.300	6596.200
Any liability and / or claim pertaining to Demerged Undertaking, for non-availability of information/record from CHL, which may arise in future is not disclosed.	--	--

Company History:

Subject was incorporated as a private limited company on 25th February 1980 to undertake the business of manufacturing and selling Synthetic Detergents, Soaps, Chemicals and Allied Products. It was promoted by Karsanbhai Patel as his pet project. The Company is engaged in the consumer goods and industrial products sector, having major manufacturing plants for production of various products includes Soda Ash, Linear Alkyl Benzene, Soaps, Detergents, Edible Salt, Industrial Salt and Others (Alfa Olefin Sulfonate, Sulfuric Acid, Glycerin and Single Super Phosphate). Also having separate unit for packaging. Nirma markets its products through its wholly owned subsidiary, Nirma Consumer Care Limited. The Company went to public in the year of 1993 as overcome from the status of deemed public limited. The Company came out with its maiden public issue of Equity Shares in the year 1994. During the same year, Nirma also ventured into manufacture of Fatty Acid, Glycerine, Toilet Soaps, Sulphuric Acid and Alfa Olefin Sulphonate (AOS). In 1995, the company had entered into an Agreement with Humphrey and Glasgow Consultants Limited for Detailed Engineering, construction supervision including Civil and Architectural Designs and Procurement Services for the Soda Ash Plant. During the year 1996, on account of modernisation, the company had successfully manufactured IP Grade (Pharmaceutical Grade) Glycerin. The associated companies including Nirma Detergents, Shiva Soaps and Detergents, Nirma Soaps and Detergents and Nilnita Chemicals were merged with the company during the period of 1996-1997. Nirma Consumer Care was formulated as a wholly-owned subsidiary of the company by the company in the year of 1997 itself. Nirma had completed successfully the state-of-the-art 80,000 TPA Linear Alkyl Benzene plant in the year 1998. During the year 1999, the edible salt market was set by the company to witness a keen battle with a new entrant, Nirma Salt, about to hit the market. In January of the year 2000, the 65,000 MTPA Normal Paraffin project was commissioned in a record 18 months time. Nirma had decided to acquire the business of Kisan Industries for the cash consideration of Rs 2000.000 millions with effect from 1st April of the year 2000. During the year 2002, the company had undertaken the manufacturing process of toilet soap under the brand name 'Camay' for its subsidiary Nirma Consumer Care Limited which obtains license from Procter and Gamble Home Products Limited In the same year of 2002, the company had closed its Bangladesh unit due to low sales volumes and entered into foods category with launch of Nirma Shudh Salt. Gujarat High Court approved the scheme of arrangement for demerger of operating division of Nirma Industries Limited with the company in the year 2003. A tripartite agreement was made with Core Health Care Limited (CHL) and Assets Reconstruction Company (India) Limited in the matter of acquiring undertaking of CHL in the year of 2004. DURING 2004-05, the company had discontinued the production process at Pithampur in Madhya Pradesh and Jaipur in Uttar Pradesh. Nirma had obtained possession of some of the assets from Asset Reconstruction Company (India) Limited (ARCIL) and commenced production in 2005-06. Also in the same year, the company had launched intravenous fluids in the name of 'Nirlife' brand in the market. The Company had established the total purchase order commitments of Rs.2160.000 millions for Pure Water Plant / Utilities Expansion and Caustic Plant in the year 2006-07. The Composite Scheme of Compromise and Arrangement with Core Healthcare Limited, its Lenders and shareholders (CHL) and the Company and its shareholders ('Scheme') were approved by the Hon'ble High Court of Gujarat vide its Order dated 1st March 2007. The Scheme became effective on 7th March of the year 2007. In November of the year 2007, Nirma purchased the American raw materials company Searles Valley Minerals Inc. Nirma closed its soda ash acquisition in January of the year 2008.

Finance

The Company follows moderately aggressive finance policy to contain cost of borrowing. Sustained cash flows from core operations help company in resorting to short term borrowings to fund its moderate Capex plans. The Company believes in low to moderate gearing that can be serviced comfortably from operating cash flows.

BUSINESS OVERVIEW

Fiscal year 2010 in general was favorable for the Indian economy. Impact of Global uncertainties was even more remote with the passage of time. Temporarily, however, crisis in some of the European countries was felt across the domestic markets. Consumer inflation, spurt in commodity prices and volatility in financial market is something Indian Corporate will have to learn to leave with as the byproduct of global uncertainties.

Standalone Operating Result

On Standalone basis, the year was moderate; the net sale of the Company was increased to Rs.31179.500 millions from 30301.700 millions of the previous period. The EBITDA has increased to Rs.6045.900 millions from Rs.4999.800 millions as compared to the previous period. The net profit was at Rs.2379.400 millions during the year compared to Rs.934.300 millions of the previous year.

PROJECTS

During the year, the Company successfully commissioned 240 TPD Caustic Soda project at its Kalatalav Chemical Complex in District Bhavnagar of Gujarat State.

Work on the Cement Project has been resumed in April 2010 after decision of the Hon’ble High Court of Gujarat was received in the matter of PIL filed against the Company. However an appeal against the Order is lying in the Supreme Court and a review petition of also filed before the Hon’ble Gujarat High Court.

AMALGAMATION AND DEMERGER

The Board of Directors of the Company at its meeting held on 31st March 2010 approved the Scheme of Arrangement in the nature of amalgamation of Nirma Consumer Care Limited, a wholly owned subsidiary with the Company. The Hon’ble High Court of Gujarat has vide its Oral Judgment dated 13.05.2010 dispensed with the requirement for calling of the meeting of the members of the Company. The Company shall be filing petition before the Hon’ble High Court of Gujarat for the approval of the Scheme.

The Board also simultaneously approved the Scheme of Arrangement in nature of Demerger and transfer of Cement and Mining Division of Nirma Credit and Capital Private Limited to the Company. The requisite formalities for the approvalof Scheme is being made. The said Schemes shall be effective from 1st April 2009. The Company will give effect of the aforesaid both the Scheme of Arrangement in its accounts upon the Scheme becoming effective.

MANAGEMENT DISCUSSION AND ANALYSIS

ECONOMY and MARKET TREND

The global economic conditions stabilized partially during the year 2009 with focus changing from America to European countries. Capital, Liquidity and confidence improved during the year. The Indian economy bounced back with robust growth.

India could withstand dramatic changes in macro-economic environment and depressed market conditions largely due to domestic consumption and savings. Double digit growth in industrial production of April 2010 indicates encouraging fiscal year ahead of us. However, the Indian Corporate will have to learn to live with volatility, inflationary pressures and frequent monetary policy changes.

COMPANY’S PRODUCTS

The Company has diversified portfolio of Soaps and Surfactants, Pharma and Processed Minerals. The Company is one of the leading consumer companies in India and chemical companies based out of Gujarat, India. It is amongst the few brands that created market for itself. “Nirma and Nima” brands are household names and have been rated several times in past as one of the best Indian brands. “Nirma” has been aptly labelled as ‘Marketing Miracle’ of their era and even been adjudged as one of the Super brands of India.

Soaps and Surfactants business include Soaps and Detergents as well as key chemicals and packaging required in their manufacture. As a part of backward integration strategy, the Company has, in stages, set up manufacturing facilities for Synthetic Soda Ash, Normal Paraffin, Linear Alkyl Benzene (LAB), Linear Alkyl Benzene Sulphonate, Sulfuric Acid, Industrial Salt, Alpha Olefin Sulphonate, Glycerine, Fatty Acid and Packing. The Company also operates the largest solar salt works of Asia.

In the year 2006-07, the Company forayed into Pharma business by acquiring a running IV Fluid plant spread across 650 acres and located at Sachana near Ahmedabad. Since then the facility has been substantially upgraded as well as expanded and is currently equipped with capacity of 250 mn Large Volume Parenterals, 1 Billion Small Volume Parenterals and 1.5 billion units of medical devices.

India’s soda ash consumption is rapidly increasing, growing at 5% compared with a 2% global growth. From many comparisons, aggregate Indian capacity remains insignificant in comparison to China, Europe and the USA. This is evident by the fact that Solvay’s global capacity is twice that of the entire Indian capacity. However, India’s soda ash market is attracting global players making scale essential for Indian producers to remain competitive. Sensing the need to expand its capacity and capabilities in the sector, the Company has acquired a US based natural soda ash facility in the later part of 2007, taking the Company in top seven world producers of the commodity. The Company acquired USA based Searles Valley Minerals Inc. and Searles Valley Minerals Operations Inc., (SVM) engaged in processing of Soda Ash, Boron and Sodium Sulphate from Trona deposits in the western USA. Trona is an evaporate mineral and is of primary importance in the soda ash market as a competitor to synthetically produced material. Advanced solution mining and crystallization techniques of SVM yield approximately two million tons of these minerals each year.

Currently the manufacturing facilities of the Company are located at Mandali in Dist. Mehsana, Moraiya in Dist. Ahmedabad, Alindra in Dist. Vadodara, Kalatalav in Dist. Bhavnagar, Sachana in Dist. Ahmedabad and Searles Valley, Ridgcrest in the USA.

OVERVIEW OF Sales

Soaps and Surfactants

The sector is volume driven and characterized by low margins. The products are branded and backed by marketing, heavy advertising, slick packaging and strong distribution networks. Also, raw material prices play an important role in determining the pricing of the final product. Keys to success for this segment are brand building, extensive distribution network and control over raw materials. The Company has established over the years strong brand name, loyal nation-wide dealers’ network and millions of satisfied customers. The Company continues to provide its customers the best quality products at a fair and competitive price through its experienced and well-informed distributors across the country. The rural markets are the main growth drivers. The number of households in rural areas using FMCG products has gone up from 136 mn in 2004 to 143 mn in 2007 implying a CAGR of 1.7%. According to a McKinsey, rural India would become bigger than the total consumer market in countries such as South Korea or Canada in another twenty years.

The turnover of soaps and detergents for the fy 2009-10 has been declined to Rs.17870.200 millions from Rs.21092.600 millions in fy 2008-09.

Volume growth was moderate as the Detergent and Soap has highest level of penetration in India. During the year, sales from the Soaps and Detergent at accounted for 36.99% of the gross sales on consolidated basis and 53.68% of gross sales on standalone basis.

Sales of Soda ash and Linear Alkyl Benzene at Rs.9086.100 millions from Indian operation accounted for 27.29% of the gross sales on standalone basis. The Company has started manufacturing and marketing caustic soda during the year.

Pharma

Pharma business continues to be impacted by increased raw material prices and stiff competition. Despite this, the Company achieved gross sales of Rs.2300.000 millions, up from Rs.1600.000 millions for the previous year. The Company sold 152.400 millions units of infusions and 337.000 millions units of small volume injectables. All the products of the Company are sold under brand “Nirlife” and within 3 years `Nirlife’ brand is well recognized and has become one of leading brand in the field.

During the year, the Company received very encouraging response to new launch of 50 branded formulation products under `All Care’ division. The Company plans to launch in near future complete range of formulations, viz. liquid, oral, solid dosage, semi solid and injectables.

Processed Minerals

Processed minerals manufactured in the USA based production facilities are marketed mainly in USA, Latin America and Europe with some volume coming from Japan, China and Gulf countries. The products find application in manufacture of container glass, flat glass, detergent, agricultural, and fire retardant industries. Like most industries, processed minerals markets have been impacted by the worldwide recession. The glass industry represents 50% of worldwide demand for soda ash and has been impacted by deterioration in the construction and auto industries. For processed minerals, the markets are tied to the GDP growth rates, standard of living and the need to conserve energy. The current recession causing a significant weakness in the construction and the automobile industries has relatively more adversely affected the soda ash markets than the boron markets. For the boron products, the weakness in the US housing sector has been partially offset by the energy conservation legislation in the European Union, awareness to increase crop yield from boron deficiency in Asian countries, Chinese incentives to purchase luxury items in the rural areas and new applications such as TFT glass, solar panel parts etc.

The Company continues taking measures like looking to alternative markets, reallocation of labours, implementation of maintenance programs etc. to counter the recessionary pressure in US market. Sales from this segment for the year converted into INR stood at Rs.150.953 millions which was 31.24% of consolidated gross sales of the Company.

OVERVIEW OF COST and EARNINGS

The total operating expenses, including interest, during the year was Rs.25710.500 millions for Fy 10 as against Rs.26174.600 millions for the previous year. As a percentage of gross sales, it was 77.23% as against 78.04% for the previous year. Material consumption at Rs.12908.900 millions during the year was 38.78% of gross sales. Profit before Interest, Depreciation and Tax at Rs.6045.900 millions increased by 20.92% as compared to Rs.4999.800 millions of the previous year. The depreciation was Rs.2875.600 millions for the year as against Rs.2443.800 millions in the previous year.

The net profit was at Rs.2379.400 millions as against Rs.934.300 millions of the previous year. Debtors at Rs.2692.800 millions are marginally higher than Rs.2504.900 millions in previous year. The total debt to tangible net worth ratio of the Company is 0.63. The Earning per Share stood at Rs.14.95. On consolidated basis, the Company achieved Gross Sales of Rs.48316.100 millions. The Profit before Interest, Depreciation and Tax was Rs.7291.200 millions, an increase by 9.20% over the previous year. The Net Profit was at Rs.2493.300 millions during the year. The consolidated Earning per Share stood at Rs.15.67.

FUTURE OUTLOOK

Soaps and Surfactants

Indian FMCG was one of the few sectors worlds over that could withstand brunt of global melt down and emerge without major damage. While high level of penetration prevented perceptible volume growth, the burgeoning Indian middle class provided value growth in the sector to help the industry players ward off the cascading effects on their margins. Willingness of the consumers to spend backed by the ability to do so was instrumental in isolating the sector from effects of economic slow down. Timely intervention by the Government in the form of policy measures provided much needed respite to the sagging bottom lines of the companies.

The Soap and Detergent industry recorded moderate value growth during the financial year. Going forward the growth will continue to be moderate or could even decline as most of the current growth was cost driven increase.

Volume growth for Detergent and Soap will continue to be marginal in view of high level of penetration in India. Much will also depend on the pan India sufficiency of rains. Soda Ash industry is characterized by high logistic costs, energy intensive, high capital investments and cyclicality akin to commodity product. Hence key to success lies in better integration, conservative financial policies, export focus and cost conscious business practices. Demand-supply situation in China, business plan of American Natural Soda Ash Corporation, demand from glass and detergent industry and crude oil prices are the major determinants of international soda ash prices. In recent years imports from the China constantly rise year by year. Indian Govt. continued safeguard duty on import of soda ash from China, as increased imports from China had caused Market disruption to domestic industry of soda ash.

Pharma

India is the one of the largest market worldwide and is one of the largest exporting countries in pharmaceutical market due to edge over others. The growth prospects in pharmaceutical market are very promising and the sector is growing at more than double digit in the domestic market. The Company has decided to enter into complete range of pharmaceutical formulations, like liquid, oral, solid dosage, semi solid and injectibles. In short time of about 2 years, the Company has already established leadership position and the brand “Nirlife” and Company’s presence in the Healthcare business is well established. On completion of pharmaceutical formulation facility, the Company will be the only major set up worldwide having Parental Products, Medical Devices and Pharmaceutical Formulations under one roof. This will be unique position and will be a great opportunity for the Company to establish market in the field of Healthcare worldwide.

The Company is expecting approvals like GCC, MHRA, TGA, MCC, USFDA etc. post which it would be able to register and sell its products in all major parts of world markets covering Middle East, South Africa, Europe, Australia, Newzeland, USA. The Company has also developed dedicated distribution network, and sales teams for sales of its products both within and outside country. All the new products considered for future launch have huge potential in these counties and in years to come ‘Nirlife’ brand will be well recognized brand in the domestic market and worldwide.

Processed Minerals

Glass and construction industries have recently stabilized and are poised for recovery beginning in the fourth quarter. Full recovery is anticipated to be accelerated in developing economies while demand in developed countries will lag by as much as two years.

Soda Ash market is expected to recover as the global economy recovers strength. However, the pricing is not expected to improve due to significant overcapacity in China and a new facility in Turkey. As the US housing industry improves, boron markets are expected to have even stronger growth. Demand for boron-based minerals,

Considered a leading indicator of economic activity has stabilized and is increasing.

The Company also has the ability to export into a variety of end-uses and countries in order to optimize its customer portfolio. Demand is wide-spread geographically and the customer base is highly fragmented. In addition, substantial portion of the market is sold on a spot basis. These dynamics provide greater flexibility and allow the Company to quickly realize the gains associated with a recovery of economy.

US based soda ash production is well positioned from a cost perspective to compete in world markets. To maintain profitability for soda ash, the Company is addressing cost position through new technology and process de-bottlenecking. The boron products profitability is being addressed through a combination of factors involving improvement of process efficiencies to yield more tons and the marketing of the products to specific end-use applications yielding higher realizations.

Projects

The Company’s own state of the art manufacturing facilities to manufacture formulations is nearing completion and is expected to be operational from September 2010. At present, the Company is in the process of validation and start up, and post regulatory formalities, it will be able to commence production.

The construction activities on the Company’s 1.91 mn ton Cement Project at Mahuva were stayed last year pending report of a high powered committee appointed by the State Government of Gujarat and a Public Interest Litigation with the Honorable High Court of Gujarat.

The Committee and the High Court have now permitted the Company to resume work on the Project subject to certain conditions, mainly surrendering of part of the land. The Company has accordingly surrendered the stipulated portion of land and resumed implementation of its Cement Project.

The opposite Parties have filed an appeal in the Supreme Court against and a review petition in the Gujarat High Court against the Order of the Gujarat High Court.

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 31.12.2010

Rs. in millions

Particulars	Quarter Ended 31.12.2010	Cumulative up to 31.12.2010
Income
a) Net Sales / Income from Operations	8021.100	24057.400
b) Other Operating Income	0.400	1.300
Total Operating Income	8021.500	24058.700
Expenditure
(a) (Increase)/decrease in Stock in Trade	212.500	101.900
(b) Consumption of Raw Materials	3174.700	10060.500
(c) Purchase of traded goods	239.600	334.700
(d) Employees Cost	360.900	973.700
(e) Depreciation	696.300	2094.900
(f) Other Expenditure	3037.900	9132.700
Total Expenditure	7721.900	22698.400
Profit / (Loss) From Operations before other Income Interest & Exceptional Items	299.600	1360.300
Other Income	25.000	61.700
Profit/(Loss) before Interest and Exceptional items	324.600	1422.000
Interest	79.800	237.100
Profit / (Loss) after interest before Exceptional items	244.800	1184.900
Exceptional Items	55.300	82.600
Profit / (Loss) From Ordinary activities before Tax	300.100	1267.500
Provision for Taxation	30.000	8.900
Net Profit/(Loss) From Ordinary activities after Tax	270.100	977.800
Extraordinary Items	-	-
Net Profit/(Loss) for the period	270.100	977.800
Paid Up Equity Share Capital ( Face Value of the share Rs.10/- each )	7957	7957
Reserves (Excluding Revaluation Reserves)	-	-
Public Share Holding
Before Extraordinary Items
-Basic and Diluted	1.70	6.14
After Extraordinary Items
-Basic and Diluted	1.70	6.14
Average of Public Share Holding
- Number of Shares	36326362	36326362
- Percentage of shareholding	22.83%	22.83%
Promoters and Promoter group share holding
a) Pledged / Encumbered
- Number of Shares	--	--
- Percentage of share (as a % of the total shareholding of promoter and promoter group)	--	--
- Percentage of shares(as a % of the total share capital of the company)	--	--
b) Non-encumbered
- Number of Shares	122815920	122815920
- Percentage of Share (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)	77.17%	77.17%

1. The above financial results were reviewed by the Audit Committee at their meeting held on February 08, 2011 and approved by the Board of Directors at their meeting held on February 09, 2011.

2. The Statutory Auditors of the Company have carried out "Limited Review" of the above financial results.

3. The petitions for the Scheme of Arrangement in the nature of demerger of Cement and Mining Division of Nirma Credit and Capital Private Limited and transfer to the Company and the Scheme of Amalgamation of Nirma Consumer Care Limited with the Company are pending with the Hon’ble High Court of Gujarat.

4. The Company has taken over Demerged undertaking of Core Healthcare Limited (CHL), under the Composite Scheme of Compromise and Arrangement sanctioned by the High Court of Gujarat by order dated 1st March, 2007. The appointed date for this purpose was 1st December, 2004 and the effective date was 7th March, 2007. Three parties of CHL have filed an appeal against the said order before the Division Bench of Hon'ble High Court of Gujarat. The appeal is pending.

5. There was one pending complaint at the beginning of the quarter. During the quarter ended December 2010 the Company had received 18 complaints, 18 complaints were disposed off and one complain was outstanding at the end of the quarter. The Company has further forwarded 3 complaints received during the quarter to Core Healthcare Limited (CHL) / Official Liquidator which were related to the data of shareholders of CHL on account of non-availability of data with the Company.

6. Effective from April 01, 2008, consequent to the exercise of the option available as per the new paragraph 46 of the Accounting Standard 11, The Effects of Changes in foreign exchange rate notified by the Ministry of Corporate Affairs vide Notification dated March 31, 2009 on Companies (Accounting Standard) Amendment rules, 2009 [G.S.R.225(E) dated 31.03.2009] on exercise of option, the Company transferred Rs.137.900 millions to Foreign Currency Monetary Item Translation Difference Account. The Company has written back Rs.82.600 millions to Profit and Loss Account up to December 31, 2010 and Rs.55.300 millions is remaining to be written back.

7. The Company has applied for delisting of its equity shares from Bombay Stock Exchange Limited and National Stock Exchange of India Limited under SEBI (Delisting of Equity Shares) Regulations, 2009.

8. Figures of the previous year/quarter have been regrouped wherever necessary.

Unaudited Segment wise Revenue, Results and Capital Employed

Rs. in millions

Particulars	Quarter Ended 31.12.2010	Cumulative up to 31.12.2010
Segment Revenue (Net sales/Income from each segment)
Soaps and Surfactants	6605.700	19368.800
Pharmaceuticals	857.400	2477.900
Others	558.000	2210.700
Total	8021.100	24057.400
Less : Inter segment revenue - -	0.000	0.000
Net Sales / Income from Operations	8021.100	24057.400
Segment Results (Profit before Tax and Interest)
Soaps and Surfactants	479.300	1984.800
Pharmaceuticals	(133.500)	(299.400)
Others	103.300	285.800
Total	449.100	1971.200
Less : 1) Interest	79.800	237.100
2) Other unallocable expenditure net of unallocable income.	69.200	466.600
Total Profit Before Tax	300.100	1267.500
Capital Employed (Segment Assets – Segment Liabilities)
Soaps and Surfactants	21592.500	21592.500
Pharmaceuticals	5142.600	5142.600
Others	3065.700	3065.700
Unallocable	(1268.300)	(1268.300)
Total Capital Employed in Segments	28532.500	28532.500

As per Accounting Standard 17 on Segment Reporting (AS 17), the Company has reported "Segment Information", as described below :

• The Soaps and Surfactants includes detergents, toilet soap and its ingredients.
• The Pharma business.
• Others includes Single super phosphate, Vaccume salt, Iodised salt and Castor oil etc.

FIXED ASSETS

· Freehold land

· Leasehold land (permanent)

· Building

· Trademarks

· Goodwill

· Plant and machinery

· Furniture and fittings

· Equipments

· Vehicles

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 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.44.74
UK Pound	1	Rs.73.25
Euro	1	Rs.65.48

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	8
PAID-UP CAPITAL	1~10	8
OPERATING SCALE	1~10	8
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	9
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	9
--RESERVES	1~10	8
--CREDIT LINES	1~10	9
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		75

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

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

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

RATING EXPLANATIONS

RATING		STATUS	PROPOSED CREDIT LINE
>86	Aaa	Possesses an extremely sound financial base with the strongest capability for timely payment of interest and principal sums	Unlimited
71-85	Aa	Possesses adequate working capital. No caution needed for credit transaction. It has above average (strong) capability for payment of interest and principal sums	Large
56-70	A	Financial & operational base are regarded healthy. General unfavourable factors will not cause fatal effect. Satisfactory capability for payment of interest and principal sums	Fairly Large
41-55	Ba	Overall operation is considered normal. Capable to meet normal commitments.	Satisfactory
26-40	B	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.