MIRA INFORM REPORT

Report Date :

14.08.2012

IDENTIFICATION DETAILS

Name :	CLARIANT CHEMICALS (INDIA) LIMITED (w.e.f. 05.06.2006)
Formerly Known As :	COLOUR – CHEM LIMITED
Registered Office :	Kolshet Road, P.O. Sandoz Baug, Thane - 400607, Maharashtra
Country :	India
Financials (as on) :	31.12.2011
Date of Incorporation :	27.12.1956
Com. Reg. No.:	11-010806
Capital Investment / Paid-up Capital :	Rs.266.607 Millions
CIN No.: [Company Identification No.]	L24110MH1956PLC010806
TAN No.: [Tax Deduction & Collection Account No.]	MUMC10036F / MUMC00339D
PAN No.: [Permanent Account No.]	AAACC4298H / AAACC5602P
Legal Form :	A Public Limited Liability Company. The Company’s Shares are Listed on the Stock Exchanges.
Line of Business :	Manufacturing of Dyes and Chemicals.
No. of Employees :	854 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (67)

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 19420000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established and a reputed company having good track records. Financial position of the company appears to be sound. Directors are experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered good for normal 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 – June 30, 2012

Country Name	Previous Rating (31.03.2012)	Current Rating (30.06.2012)
India	A1	A1

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

EXTERNAL AGENCY RATING

Rating Agency Name	CARE
Rating	A1+ (Short Term Bank Facilities)
Rating Explanation	Very strong degree of safety and lowest credit risk.
Date	26.06.2012

Rating Agency Name	CARE
Rating	AAA (Long Term Bank Facilities)
Rating Explanation	Highest degree of safety and lowest credit risk.
Date	26.06.2012

RBI DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available RBI Defaulters’ list.

EPF (Employee Provident Fund) DEFAULTERS’ LIST STATUS

Subject’s name is not enlisted as a defaulter in the publicly available EPF (Employee Provident Fund) Defaulters’ list as of 31-03-2012.

LOCATIONS

Registered Office/ Factory 1 :	Kolshet Road, P.O. Sandoz Baug, Thane – 400607, Maharashtra, India
Tel. No.:	91-2225-315111
Fax No.:	91-2225-315303
E-Mail :	info@clariantindia.com satish.bhattu@clariant.com pratik.shroff@clariant.com sunil.nayak@clariant.com bankatial.gaggar@clariant.com vinod.mandke@clariant.com
Website :	http://www.clariantindia.com
Factory 2 :	113/114, MIDC Industrial Area, P O Dhatav, Roha, District Raigad – 402116, Maharashtra, India
Factory 3 :	Kudikada. SIPCOT, P.O. Cuddalore – 607005, Tamilnadu, India
Factory 4 :	Singadiovakkam Village, Attuputtur Post Enathur, Kanchipuram – 631561, Tamilnadu, India

DIRECTORS

(AS ON 31.12.2011)

Name :		Mr. Rajendra Ambalal Shah
Designation :		Chairman cum Managing Director
Address :		Panorama, 203 Walkeshwar Road, Mumbai – 400006, Maharashtra, India
Date of Birth/ Age:		07.07.1931
Date of Appointment :		19.04.2007
Name :	Mr. Peter Palm
Designation :	Vice Chairman and Management Director
Name :		Mr. Bansidhar Sunderlal Mehta
Designation :		Director
Address :		C – 37, Fifth Floor, Maheshwari Mansion L Jagmohandas Marg, Mumbai – 400006, Maharashtra, India
Date of Birth/ Age:		19.09.1935
Date of Appointment :		27.07.2006
Name :	Mr. Diwan Aruhn Nanda
Designation :	Director
Name :	Mr. Henri Schloemer
Designation :	Director
Name :		Mr. Alfred Muench
Designation :		Director
Name :		Mr. Philipp Hammel
Designation :		Director

KEY EXECUTIVES

Name :	Mr. B L Gaggar
Designation :	Director in Finance and Company Secretary
Audit Committee:	· Mr. R A Shah, Chairman · Mr. Diwan A Nanda · Mr. Henri Scholmer
Investors’ Grievance Committee	· Mr. Diwan A Nanda, Chairman · Mr. Peter Palm
Name :	Crawford Baylor and Company
Designation :	Solicitors and Advocates

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

(AS ON 30.06.2012)

Category of Shareholders	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
(2) Foreign
Bodies Corporate	16902080	63.40
Sub Total	16902080	63.40
Total shareholding of Promoter and Promoter Group (A)	16902080	63.40
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	1727501	6.48
Financial Institutions / Banks	22833	0.10
Insurance Companies	368956	1.38
Foreign Institutional Investors	302220	1.13
Sub Total	2421510	9.10
(2) Non-Institutions
Bodies Corporate	769043	2.92
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 Million	5040811	22.00
Individual shareholders holding nominal share capital in excess of Rs.0.100 Million	465542	1.87
Any Others (Specify)	180767	0.72
Non Resident Indians	165015	0.64
Trusts	13902	0.06
Overseas Corporate Bodies	1850	0.01
Sub Total	6456163	27.51
Total Public shareholding (B)	8877673	36.60
Total (A)+(B)	25779753	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)	25779753	100.00

BUSINESS DETAILS

Line of Business :

Manufacturing of Dyes and Chemicals

Products :

Products Description	Item Code No.
CHLORANILDRY	291470.90
CORALON OT- INP	320210.00
PV FAST BLUE BG - IN	320417.51

· Mowilith used in paints, construction and specilities

· Mowicoll used in adhesives

· Appretan, Emucry and Printoff binder used in textiles

· Melio used in Leather

· Cartaseal, Cartaco and Cartacoal used in Paper

· Major monomer systems include: Vinyl Acetate, VeoVa, Acrylates, Styrene and other Specilities

PRODUCTION STATUS (AS ON 31.12.2011)

Particulars	Unit	Licensed Capacity	Installed Capacity M. Tonnes #	Actual Production M. Tonnes * #
Intermediates and Colours	M.T	NA	12002	9570
Dyes and specialty chemicals	M.T	NA	74986	49044

* Excluding captive Consumption

# At different Concentrations

NOTES:

· The classification between the class of goods and the installed capacities have been certified by the Vice -Chairman and Managing Director on which the auditors have placed reliance, this being a technical matter.

· Licensed capacity per annum not indicated due to the abolition of Industrial Licenses as per Notification No. 477(E) dated 25th July, 1991 issued under The Industries (Development and Regulations) Act 1951.

GENERAL INFORMATION

No. of Employees :

854 (Approximately)

Bankers :

· Standard Chartered Bank Limited

Branch M G Road, Fort, Mumbai, Maharashtra, India

· Citi Bank N.A.,

Branch M G Road, Fort, Mumbai, Maharashtra, India

· HSBC Bank,

Branch M G Road, Fort, Mumbai, Maharashtra, India

Facilities :

Unsecured Loans	As on 31.12.2011	As on 31.12.2010
	(Rs. In Millions)
From Others Interest–free sales tax deferral scheme granted by State Industries Promotion Corporation of Tamil Nadu Limited	2.019	10.528
Total	2.019	10.528

Banking Relations :	--
Auditors :
Name :	Deloitte Haskins and Sells Chartered Accountants
Holding Company:	· EBITO Chemiebeteiligungen AG · Clariant International AG · Clariant Participations AG
Ultimate Holding Company:	· Clariant AG, Switzerland
Subsidiary :	· Chemtreat Composites India Private Limited
Fellow Subsidiaries :	· Clariant (Australia) Pty. Limited · Clariant (Canada) Inc. · Clariant (China) Limited · Clariant (Colombia) SA · Clariant (Egypt) SAE · Clariant (Guatemala) SA · Clariant (Gulf) FZE · Clariant (Japan) K.K. · Clariant (Korea) Limited · Clariant (Malaysia) Sdn Bhd · Clariant (Maroc) S.A. · Clariant (Mexico) S.A. de C.V. · Clariant (Pakistan) Limited · Clariant (Perú) S.A. · Clariant (Singapore) Pte. Limited · Clariant (Thailand) Limited · Clariant (Tianjin) Limited · Clariant (Uruguay) SA · Clariant Chemicals (China) Limited · Clariant Chemicals (Taiwan) Company Limited · Clariant Corporation · Clariant Export AG · Clariant Ibérica Producción S.A. · Clariant Masterbatch Ibérica S.A. · Clariant Masterbatches (Deutschland) GmbH · Clariant Masterbatches (Malaysia) Sdn Bhd · Clariant Masterbatches (Italia) S.p.A. · Clariant Masterbatches (Saudi Arabia) Limited · Clariant Masterbatches (Shanghai) Limited · Clariant Masterbatches (Thailand) Limited · Clariant Masterbatches Benelux SA · Clariant Masterbatches Huningue · Clariant Masterbatches Ireland Limited · Clariant Masterbatches Norden AB · Clariant Pigments (Korea) Limited · Clariant Pigments (Tianjin) Limited · Clariant Prodotti (Italia) S.p.A. · Clariant Production (France) · Clariant Produkte (Deutschland) GmbH · Clariant Produkte (Schweiz) AG · Clariant S.A. · Clariant Southern Africa (Pty.) Limited · Clariant Specialty Chemicals (Zhenjiang) Company Limited · Clariant Trading (China) Limited · Clariant (Türkiye) Boya ve Kimyevi Maddeler Sanayi ve Ticaret A.S. · K.J. Quinn · PT Clariant Indonesia · The Egyptian German Company for Dyes and Resins SAE (Egcodar SAE)

CAPITAL STRUCTURE

(AS ON 31.12.2011)

Authorised Capital :

No. of Shares	Type	Value	Amount
30000000	Equity shares	Rs.10/- each	Rs.300.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
26660745	Equity Shares	Rs.10/- each	Rs.266.607 millions

NOTES

Of the above:

(a) 15010745 equity shares issued as fully paid up pursuant to a contract for a consideration other than cash.

(b) 8167080 equity shares are held by EBITO Chemiebeteiligungen AG.

6075000 equity shares are held by Clariant International AG.

2660000 equity shares are held by Clariant Participations AG.

The ultimate holding company being Clariant AG, Switzerland.

(c) 6690610 equity shares were allotted as fully paid up bonus shares by capitalisation of Rs.66.906 Millions from general reserve.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.12.2011	31.12.2010	31.12.2009
SHAREHOLDERS FUNDS
1] Share Capital		266.607	266.607	266.607
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		4587.653	3404.351	3211.318
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		4854.260	3670.958	3477.925
LOAN FUNDS
1] Secured Loans		0.000	0.000	0.000
2] Unsecured Loans		2.019	10.528	20.478
TOTAL BORROWING		2.019	10.528	20.478
DEFERRED TAX LIABILITIES		45.643	0.000	0.000
TOTAL		4901.922	3681.486	3498.403
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1704.872	1355.782	1389.030
Capital work-in-progress		148.908	198.787	59.072
Fixed assets held for disposal		0.000	37.870	79.234
INVESTMENT		2665.126	1918.391	1244.995
DEFERREX TAX ASSETS		0.000	10.808	27.572
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	1155.943	907.262	766.503
	Sundry Debtors	1333.891	1256.093	1445.963
	Cash & Bank Balances	284.455	209.148	169.662
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	691.937	789.574	632.049
Total Current Assets		3466.226	3162.077	3014.177
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditor	1701.179	1664.315	1448.816
	Other Current Liabilities	234.153	510.659	208.474
	Provisions	1147.878	827.255	658.387
Total Current Liabilities		3083.210	3002.229	2315.677
Net Current Assets		383.016	159.848	698.500
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		4901.922	3681.486	3498.403

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.12.2011	31.12.2010	31.12.2009
	SALES
		Income	9560.812	9747.128	9213.413
		Other Income	394.310	312.345	263.082
		TOTAL (A)	9955.122	10059.473	9476.495
Less	EXPENSES
		Cost of materials	5914.979	5862.730	5452.349
		Personnel cost	742.445	671.277	615.871
		Impairment of fixed assets	0.000	0.000	13.698
		Other expenditure	1618.576	1665.024	1417.836
		Service Charge recovered	(16.847)	(36.977)	(90.674)
		Exceptional items	(2413.320)	72.947	245.046
		TOTAL (B)	5845.833	8235.001	7654.126
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION (A-B) (C)		4109.289	1824.472	1822.369
Less	FINANCIAL EXPENSES (D)		(26.045)	2.320	1.667
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION (C-D) (E)		4135.334	1822.152	1820.702
Less/ Add	DEPRECIATION/ AMORTISATION (F)		181.243	168.916	189.635
	PROFIT BEFORE TAX (E-F) (G)		3954.091	1653.236	1631.067
Less	TAX (H)		913.701	529.086	549.711
	PROFIT AFTER TAX (G-H) (I)		3040.390	1124.150	1081.356
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		383.785	303.167	109.740
Less	APPROPRIATIONS
		General reserve	304.039	112.415	108.136
		Interim dividend	799.822	266.607	266.607
		Proposed dividend (Final)	799.822	533.215	399.911
		Corporate tax on dividend (Interim & Final)	259.502	132.840	113.275
		Corporate tax on dividend of Previous period	(2.058)	(1.545)	0.000
	BALANCE CARRIED TO THE B/S		1263.048	383.785	303.167
	EARNINGS IN FOREIGN CURRENCY
		Exports (F.O.B.)	2160.990	1973.148	1661.273
		Know-how	0.000	0.000	13.271
		Sale of Capital Goods	0.000	0.000	5.047
		Others (insurance, freight, commission, claims, exchange gain etc.)	255.847	199.406	126.850
	TOTAL EARNINGS		2416.837	2172.554	1806.441
	IMPORTS
		Raw Materials and Trading Terms	2034.360	2079.542	1690.862
		Components and spare parts	9.184	4.786	1.087
		Capital Goods	83.372	11.993	10.449
	TOTAL IMPORTS		2126.916	2096.321	1702.398
	Earnings Per Share (Rs.)		114.04	42.16	40.56

QUARTERLY RESULTS

PARTICULARS	31.03.2012 1^st Quarter	30.06.2012 2^ndQuarter
Type	Unaudited	Unaudited
Net Sales	2451.400	2873.000
Total Expenditure	2132.600	2421.000
PBIDT (Excl OI)	318.800	452.000
Other Income	79.700	45.200
Operating Profit	398.500	497.200
Interest	3.400	3.500
Exceptional Items	92.100	0.000
PBDT	487.200	493.700
Depreciation	52.800	52.900
Profit Before Tax	434.400	440.800
Tax	117.000	133.200
Provisions and contingencies	0.000	0.000
Profit After Tax	317.400	307.600
Extraordinary Items	0.000	0.000
Prior Period Expenses	0.000	0.000
Other Adjustments	0.000	0.000
Net Profit	317.400	307.600

KEY RATIOS

PARTICULARS		31.12.2011	31.12.2010	31.12.2009
PAT / Total Income	(%)	30.54	11.17	11.41
Net Profit Margin (PBT/Sales)	(%)	41.36	16.96	17.70
Return on Total Assets (PBT/Total Assets}	(%)	76.47	36.59	37.04
Return on Investment (ROI) (PBT/Networth)		0.81	0.45	0.47
Debt Equity Ratio (Total Liability/Networth)		0.64	0.82	0.67
Current Ratio (Current Asset/Current Liability)		1.12	1.05	1.30

LOCAL AGENCY FURTHER INFORMATION

Sr. No.	Check List by Info Agents	Available in Report (Yes / No)
1]	Year of Establishment	Yes
2]	Locality of the firm	Yes
3]	Constitutions of the firm	Yes
4]	Premises details	No
5]	Type of Business	Yes
6]	Line of Business	Yes
7]	Promoter's background	Yes
8]	No. of employees	Yes
9]	Name of person contacted	No
10]	Designation of contact person	No
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	-----
14]	Estimation for coming financial year	No
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	No
20]	Export / Import details (if applicable)	No
21]	Market information	-----
22]	Litigations that the firm / promoter involved in	-----
23]	Banking Details	Yes
24]	Banking facility details	Yes
25]	Conduct of the banking account	-----
26]	Buyer visit details	-----
27]	Financials, if provided	Yes
28]	Incorporation details, if applicable	Yes
29]	Last accounts filed at ROC	Yes
30]	Major Shareholders, if available	No
31]	Date of Birth of Proprietor/Partner/Director, if available	Yes
32]	PAN of Proprietor/Partner/Director, if available	No
33]	Voter ID No of Proprietor/Partner/Director, if available	No
34]	External Agency Rating, if available	Yes

REVIEW OF OPERATIONS:

The business environment remained extremely challenging and the recessionary economic conditions to slowdown in demand and inflation pushed scale up of input costs left its adverse imprint on overall performance for 2011. The Company, based on its intrinsic strength, has broadly maintained its performance. Gross sales from

operations remained above threshold mark of Rs.10000.000 Millions during the year.

The operational performance for the current year is not strictly comparable with that of 2010 due to the fact that performance for previous year included operations of manufacturing facilities located at Balkum, Thane which was closed in December 2010.

In accordance with the memorandum of understanding (MOU) signed between the Company and Ananta Landmarks Private Limited for sale of balance land together with the infrastructure thereon located at Balkum, Thane, the Company handed over the possession and on receipt of the entire sale consideration the transaction was concluded in February 2011. The profit resulting from the sale, Rs.2404.700 Millions is reflected in exceptional items in the financial performance of the Company.

The Company registered sales of Rs.9560.800 Millions as compared to Rs.9747.100 Millions with de-growth of 1.9 percent in sales, which on like to like basis, after considering the loss of sales from discontinuance of Phthalo Green business amount to a marginal growth of 1.9 percent over previous year. The sharp increase in the cost of raw materials and inflationary rise in other expenses resulted into lowering of PBDIT margin before exceptional items from 19.5 percent to 17.7 percent. Net profit after accounting for exceptional items and tax is significantly higher over the previous year. The Company continues to remain focused to sustain its market position in the highly competitive business segments in which it operates. These results were realized by the Company in very difficult business environment which witnessed slow-down of demand both in local and foreign markets. Of the total sales revenue of the Company for the year 23.6 percent is contributed by exports.

The Cyclone “Thane”, which hit Tamil Nadu Coast on early hours of Friday, December 30, 2011, caused damage to plant infrastructure facilities and equipment at their manufacturing site located in Cuddalore and affected operations at site for a few weeks. Thanks to excellent efforts of the staff at Cuddalore, production was restored to normal after carrying out restoration activities with minor loss in productivity.

MANAGEMENT DISCUSSION AND ANALYSIS

FINANCIAL AND OPERATIONAL PERFORMANCE:

The Extremely challenging business environment had put restraint on growth drive of the Company for the year 2011. In view of discontinuation of its operations at Balkum Plant, Thane effective from December, 2010, the operational performance for the current year is not strictly comparable with that of 2010. In spite of difficult times, the Company has been able to broadly sustain its performance and registered positive sales growth of 1.9% on comparable basis and marginal loss of 1.9% on absolute value basis.

Of the total sales revenue of the Company for the year, 23.6% is contributed by exports. In view of rising cost of raw materials and escalation in other operating costs mainly due to lower productivity, profit before depreciation, interest, exceptional items and tax (PBDIT) is lower as compared to the previous year. After considering the exceptional income including those arising from sale of land and infrastructure at Balkum, Thane, the profit after tax (PAT) has gone up substantially from Rs.1124.100 Millions to Rs.3040.400 Millions as compared to the previous year. The following ratios reflect the financial performance for the year in relation to the previous year.

The Company remains a zero debt company with no long-term borrowings. The Company has been assigned ‘CARE AAA’ rating for long term bank facilities and ‘CARE A1+’ for short term bank facilities and this endorses the confidence on the financial standing of the Company. Short-term bank borrowings are restricted to the need based working capital requirements. The Company has sustained its performance in efficient management of working capital. The yearend ratio of inventory to sales of 12%, receivables to sales of 14% and net working capital to sales of 8.3 % is one of the best in the specialty chemical industry. Net cash flow from operating activities during the year was Rs.207.791 Millions. Funds surplus to the operational needs have been prudently invested to earn reasonable returns with a high degree of safety. A sum of Rs.2665.100 Millions (previous year Rs.1885.900 Millions) stands invested in debt schemes of mutual funds at the end of the year.

All the plants had smooth operations and the capacity utilisation was lower due to slowdown in demand as compared to previous year. As reported earlier, with the sale of Balkum plant in Thane, the manufacturing operations of Phthalo green was discontinued due to closure of site.

BUSINESS SEGMENTS AND PERFORMANCE:

In accordance with the Accounting Standard -17 notified by Companies (Accounting Standards) Rules, 2006 and based on characteristics of products, production processes and the class of customers, the Company has classified its range of products into two reportable business segments as under:

· Intermediates and Colours:

The Intermediates and Colours segment includes pigments, dyestuffs and their dispersion, intermediates for dyes, pesticides and pharmaceuticals and masterbatches for plastics and nylon fibers.

Clariant is a leading global provider of organic pigments, pigment preparations and dyes used in coatings, paints, printing, plastics and other specialty applications. Its product portfolio meets the demands for automotive and home decoration paints, household detergents, packaging labels, colorant used in ink jet and laser printers. Its key market segments are trading and non-impact printing, electronic displays, all plastics including films, fibers and special applications, detergent coloration, cosmetics, aluminum finishing, automotive, industrial decorative and architectural paints and coatings.

Clariant’s additives create value by improving efficiency, safety, protection, durability and appearance of products and are a provider of flame retardants, waxes and polymer additives with a wide range of applications in electronic, construction and automotive sectors.

Clariant is a global in masterbatches for color, additive concentrate and innovative performance solutions for plastic. Its customers span a broad range of markets that include packaging for home, personal care, food, drink and industrial; consumer goods appliances, electrical, sports, toys and construction; medical devices and pharmaceutical packaging; carpets, non-woven textiles and sports apparel; interior and exterior parts, engine and components for automotive sector.

The manufacturing facilities and state of art technical service laboratories provide cutting edge technology which helps in realizing the goals set by Clariant for sustainable growth of the business. The Company is a pioneer in the promotion of lead and chrome-free pigments and in spreading the awareness on use of non-halogenated flame retardants. The capability of the Company to develop and produce new master batches with accuracy and consistency has helped in achieving high growth rates over the period.

The total sales under the intermediates and colour segment comprises of pigments, additives and master batches. The ratio of domestic sales to export sales was 65:35. The segment contributes 40% to the total sales and registered a growth of 5.7% on like to like basis over the previous year. The Company is in the process of implementing a green field manufacturing facility for master batches in MIDC, Ambernath.

· Dyes and Specialty Chemicals:

The dyes and specialty chemicals segment includes dyestuffs, synthetic resins, binder materials, functional effects and coatings, auxiliaries and chemicals, comprising of specialty chemicals, emulsions and dyes for the textile, leather and paper industry and performance chemicals for personal care and industrial applications.

From fiber to finish, Clariant’s chemical technology plays a key role throughout the entire textile supply chain. As a leading producer of dyes and chemicals for textile industry, brands and mills in apparel and fashion, automotive, home and technical textiles look upon Clariant to meet their sector’s constantly changing specifications. The Company offers solutions including colour trends analysis, color matching technology combined with processing efficiency, nanotech effects, environment friendly solutions and unique concepts that add to the ability of customers to fast move their products to markets and stay ahead of competition. Key market for Clariant products include apparel, clothing of all types and fashions, home textiles such as towels, drapes, linens and furniture fabrics, technical textiles for applications including medical, construction, sports and industrial, carpets including indoor and outdoor floor coverings and mobiltech for fabrics in hard wearing transport applications such as planes, buses and trains.

Clariant is a leading provider of chemicals, technical services and solutions over the entire value chain of leather production. From beamhouse to finishing, Clariant provide high quality and environment friendly leather processing chemicals and services and world class knowledge of leather upgrading and chrome free tanning solutions. The customers in the shoe, automotive, furniture and garment segments benefit from customized technical solutions and expertise in performance leather and environmentally compatible solutions.

Clariant aims to provide knowledge and expertise in the management of whiteness, coloration, special coatings and strength for all kinds of paper, offering the most cost effective product choices and solutions. Key markets for Clariant products include printing and writing copy papers, coated papers and board, recycled papers, newsprint, packaging and specialized applications.

Clariant’s emulsions business is a major supplier of solutions in water based emulsions/polymer based dispersions. Being water based, their products are more suitable with less impact on environment avoiding the use of solvents. Key market areas for emulsions are decorative interior and exterior paints, primers, varnishes, anti-corrosion and industrial applications, concrete applications, roofing, tiling sealants and primers in construction, wood, paper, lamination, packaging and pressure sensitive adhesives and wide range of functional effects and coating applications for textiles, leather and paper.

Industrial and Consumer Specialties business is a provider of speciality chemicals and ethylene oxide derivatives for industrial and consumer care applications. The innovative products are used in skin and hair care, household goods, seeds protection and deicing airplanes. With a strong focus on ecologically sustainable solutions, their key market segments include additives for concrete and mortar, dispersing agents, defoamers, biocides and emulsifiers for emulsion polymerization, ingredients for skin and hair care cosmetics, wet wipes and pharmaceutical applications, ingredients for household and industrial cleaning solutions, ingredients for hydraulic, metal working and other performance fluids, aircraft and runway de-icers, special solvents and fluids for heat transfer, gas scrubbing, formulations for fungicides, herbicides and seed treatments.

With a wide range of products, the strong brand image of Clariant, knowledge and expertise of providing technical services and solutions in product development and application process to the needs of customers, the Company is well positioned in the business segment.

The total sales under the dyes and specialty segment comprises of mainly textiles, leather services, paper specialties, emulsions, industrial and consumer specialties. The ratio of domestic sales to export sales was 84:16. The segment contributes 60% to the total sales and registered a degrowth of 6.3% over the previous year.

INDUSTRY STRUCTURE AND DEVELOPMENT

The chemical industry is one of the world’s largest industries and since it contributes indirectly to almost every sector of the economy, it plays a vital role in a country’s economic growth. As the global economy grows, it increases the demand for chemical products and the growth is further driven by the value chain of product innovation and improved production processes.

The Indian chemical industry, one of the oldest industries in India, is highly diversified in structure catering to the broad manufacturing bases and markets. The industry with a large domestic demand potential as compared to other countries, contributes over 3 percent of the overall GDP and is an important cog in the wheel of economic growth. Based on a study conducted by Indian National Academy of Engineering (INAE), the gross turnover of Indian chemical sector was around $60 billion and the cumulative investment was USD 22 billion in 2008-09. More than 85% of its production volume is accounted by the basic chemical sector with fertilizers 43% and petrochemicals 30% providing the major contributions. However, the share of knowledge intensive chemical sector is about 34% of chemical industry turnover due to its low volume and high value feature. The overall contribution of speciality chemical sector to production is around 14% with nearly 50% of it is contributed by the food processing subsector (Chemical News, Nov.2011). The industry is contributing significantly to the industrial and economic growth and has emerged as a net earner of foreign exchange. Along with drugs and petrochemicals segments, fine chemicals, dyes and intermediates, and knowledge based chemicals are playing a significant role in driving the growth of India’s chemical industry.

The key characteristics of the Indian chemical industry are - focus on high domestic demand with increase in per capita consumption levels, high degree of fragmentation, small scale operations, limited emphasis on exports, low cost competitiveness due to high taxation and cost of capital and low focus on R&D. The chemical industry is divided into three key segments (1) basic chemicals (inorganic chemicals, petrochemicals, fertilizers and industrial chemicals), (2) speciality chemicals (paints and varnishes, textile chemicals, dyestuff and intermediaries, catalysts, plastic additives, adhesives and sealants, industrial gases etc.) and (3) knowledge chemicals (pharmaceuticals, biotechnology, agrochemicals). The speciality chemical segment is characterized with high product differentiation and value addition, typically smaller production units with more flexibility and low capital investment levels.

The Indian chemical sector is witnessing deceleration in the past few years. From a 5.31% growth in April-October, 2009, it fell to 0.9% in the same period in 2010 and there was steep fall of 2.4% in the same period in 2011. During 2011-12 the sector started well, however, the rate of growth and demand for chemicals in all segments which remained good in first quarter suddenly fell below normal over the course of the second and third quarter.

OUTLOOK, OPPORTUNITIES AND CHALLENGES

The Indian economic growth in general and industrial growth in particular has decelerated sharply during 2011. On the other hand, the global economic weakness has forced many players on other markets to divert their supplies to India. As a result, the domestic chemical sector in general and speciality chemicals in particular is witnessing the double impact of sluggish domestic demand and increased competition from global and domestic players. The Chemical industry’s contribution to the GDP has stagnated during the past two years due to India’s inability to build competitiveness required to meet global challenges and to develop a larger domestic market through low cost production. The major challenge that the Indian chemical industry continue to face is the perception that it affects the environment negatively. The industry is viewed with misapprehensions on the pollution and sustainability fronts and thus safety, health and environment protection issues have become the major talking point in the Indian chemical industry. Inspite of Indian chemical sector taking a significant lead over other industries sectors, in R and D spending and utilisation, it lags behind other emerging economies like China and S. Korea.

Products from the chemical industry have altered the quality of life world over and have contributed significantly to everyone’s day-to-day requirements. The Indian chemical industry forms the backbone of industrial development of India. Over the years, the industry has evolved from basic chemical producer to knowledge intensive industry with healthy growth. The huge potential of domestic demand and low per capita consumption in each of its industry segments compared to world average provide a strong potential for overall performance for Indian chemical industry. The speciality chemical segment which caters to several key applications will be increasingly important for India and with expanding economic growth and per capita income; it is poised to grow more than the economic growth. The industry shows comparative promise when compared to the advanced countries and has the potential to emerge as a major manufacturing hub for the global market. In the past export growth was hampered by reach and other European legislation, but Indian government has taken quick measures to meet the norms and offers concession in registration charges for companies that come under the reach legislation. This offers unique opportunities to the industry players to innovate and move up the value chain and compete effectively with global players both in the domestic and export markets and bring the Indian speciality chemical industry on the global map while meeting the needs of enhanced quality of life for growing affluent population of India. In order to improve quality and throughput, supply chain efficiencies and sustainable competitiveness, the chemical industry must look for automation of plants which are highly complex and play an important role in streamlining processes and reducing costs. With these initiatives and industry’s proactive actions, the chemical industry will witness resurgence in terms of cost competitiveness and growth.

India has emerged as a global supplier of dyestuffs, intermediates, pigments and pigment preparations and the industry is growing with steady demand from domestic and export markets. However, in order to take a leap forward, the industry has to address the issues with respect to clean and green environment and meet competitive pressure from China and other markets. The Indian paint industry has seen remarkable changes and has become far more sophisticated in terms of the products it manufactures, the way it sells to customers and the

range of technologies it uses. Industry outlook for paint, plastics, inks and special applications remain good. In coatings industry, increasing demand for good quality exterior paint provides opportunity to sell high performance pigments having better light / weather fastness. Due to retail boom, plastic and flexible film packaging is showing good signs of progress. Particularly for packing of consumable / food items, plastic packing and printing on flexible packing need safe colors conforming to the food packaging regulations. The challenges in this segment are from rising costs of utilities whereas customers are increasingly becoming sensitive to price rise. The Company has positioned itself as preferred supplier of pigments, pigment preparations, additives and intermediates to major paint, coatings and ink manufacturing companies in the country and is well equipped to meet the requirements.

The Indian textile industry which accounts for about 4% of Gross Domestic Product (GDP) has witnessed turbulence during 2011 owing to high volatility in cotton prices as well as large scale unit closures in the Tirupur area, an important center for the textile industry. The free trade agreement and duty free import of 48 textile items from Bangladesh and comparative low manpower costs has led to substantial rise in import of fabrics and apparels and export of yarn. Textile companies are fast shifting their base to Bangladesh to take advantage of low costs and tariff concessions. The Govt. has set an export target of $ 33 billion for the textiles sector for 2012-13 despite the global slowdown as against target of $ 28 billion for 2011-12. The ambitious targets is expected to provide opportunities to the textile chemical segment to move up in value chain in the expanding market of fashion, formal and leisurewear garments. The Textile chemical industry has the advantage of low cost manpower and pool of technical experts. However, with shifting base, the industry may face threat of competition from low cost countries. Clariant is a leading producer of dyes and textile chemicals and plays a key role throughout the entire textile supply chain and its all segments.

The Indian leather industry holds pre-eminent position in the global leather market and has huge potential for growth in exports. The industry has moved from being an exporter of finished leather to products exports and established for its designing capabilities and premium leather goods. The growth in leather industry is contributed

by range of product segments including leather footwear which accounts for 40% of exports followed by garment sector that accounts for about 10 percent. India’s share in the world’s leather trade is just about 3 percent. Demand for leather accessories, goods and fashion garments from India have picked up in export markets due to skill sets and technology development. Increasing labour costs in China provide further opportunity for sourcing of leather goods from India. Clariant with a wide product range of leather dyeing and finishing chemicals, provide customized technical solutions and its expertise to realize consistently brilliant colors, natural tones, performance leathers and more environmentally compatible solutions.

The Indian paper and newsprint industry is estimated at about Rs.303 billion. Significant demand growth in writing and printing paper segment in the recent past has led to significant capacity additions. Though the growth in paper demand is likely to sustain due to lower per capita consumption compared with world average, it may not be adequate to absorb all new capacities and may create surplus supply leading to price pressure. Ban on plastic usages and increasing awareness for paper usage in various segments including food packaging, cup stock and high quality color tissue opens up opportunities for OBA, colorants, strength improving chemicals, fluoro chemical, color pigments and bio degradable and FDA approved specialty chemicals. Clariant provides knowledge and expertise in the management of whiteness, coloration, special coatings and strength and offer products to improve optical and functional properties of all kinds of paper and board.

The industrial, home and personal care markets in India are on a healthy growth trajectory, although competitive pressure has intensified and margins are under pressure. Very low per capita consumption levels for most of the products compared to global averages and favorable demographics and higher disposable incomes are permitting consumers across the spectrum to increase spending. Continued expansion of markets provides immense opportunities for all kinds of chemical inputs for industrial, home and personal care segments. The chemical suppliers are being challenged to offer ingredients that provide enhanced functionality and multiple benefits at lower prices. Clariant with its strong global presence is looking forward for improving its position in this segment. The Company has established customer care and crop protection laboratories with state of art facilities to focus on strengthening new business development for industrial and personal care applications and building unique portfolio of crop protection guideline formulations using a range of emulsifiers, adjuvants, dispersing agents and new innovative chemistry derived from renewable resources.

The plastics and polymer segment is currently struggling to cope with waning domestic demand and slump in global markets. Most plastic and plastic processing facilities are running below their capacities due to declining demand. However, plastic packaging, tanks and containers segment is growing steadily with high potential for growth in domestic consumption. With local focus and global standards, Clariant addresses Indian plastics sector’s push to create innovative, safer, and environmental compatible products. It’s specialty chemicals and master batches provides broad portfolio of high-quality, cost-effective pigments, and performance additives and its innovative products provide cost efficient processing, advanced functionality and aesthetic possibilities to meet the challenges of a wide range of segments including food and cosmetics packaging, electronic and electrical (E&E), infrastructure, agriculture, medical and pharmaceutical.

Indian chemical businesses have to change and adopt their strategies, methodology of working and organizational structure to hold against competition. Highly developed technology, in-depth research capabilities, backward and forward linkages and expansion of capacity to reduce the dependence on imports are some of the crucial factors that need to be addressed.

CONTINGENT LIABILITY

Particulars	31.12.2011 (Rs. in Millions)	31.12.2010 (Rs. in Millions)	31.12.2009 (Rs. In Millions)
a) in respect of income tax matters decided against the Company, in respect of which the Company is in further appeal	116.979	189.382	145.840
decided in favour of the Company against which the department is in appeal	38.919	1.478	1.478
b) in respect of sales tax matters	495.864	244.058	57.858
c) in respect of excise matters	89.211	61.526	44.803
d) in respect of bills of exchange discounted with banks [since realised Rs.87.444 Millions (Rs. 77.863 Millions)]	134.813	113.896	111.958
e) Other matters in dispute	0.225	0.225	0.225
f) Disputed labour matters - Amount not ascertained	--	--	--

In respect of items (a) to (c), (e) and (f) future cash outflows in respect of contingent liabilities is determinable only on receipt of judgments pending at various forums/authorities.

FIXED ASSETS:

· Land Freehold

· Land Leasehold

· Building

· Plant and Machinery

· Office Equipment

· Furniture and Fixture

· Vehicles

AS PER WEBSITE

PROFILE:

Clariant’s Business Unit Additives is a major supplier of products for functional effects in plastics, coatings and printing inks. The non-halogenated flame retardants provide environmentally compatible protection for buildings, electric and electronic equipment as well as textiles and other materials used in aeroplanes, trains, busses and ships. The high quality waxes are used in polishes, protective coatings, plastics and in a range of highly specialized applications like hot melts. They also produce polymer additives like antioxidants, processing/ light stabilizers, and antistatic agents eg. to give plastics flexibility and durability, or to improve the heat, light and weather resistance of coatings.

Decades of experience and know-how have made the products the industry standard for technical performance and quality. This is supported through the global technical service centers.

MEDIA RELEASE:

CLARIANT SHARES GLOBAL BEST PRACTICES ON SAFE TRANSPORTATION OF CHEMICALS

· Safe transportation of chemicals via air, water, and road requires renewed focus.

· Key implementation gaps in road transportation needs to be filled in.

Mumbai (India), May 8, 2012 - Clariant Chemicals (India) Limited shared some of the important international regulations related to marine, air transport and road transportation at the 13th Chemical Weekly Business Outlook conference held in April 2012.

In his presentation titled – “Safe Transportation of Chemicals – Global and Indian Scenario”, Mr. P.A. Murali, Regional Head–ESHA, Clariant Chemicals (India) Limited, elaborated that while Marine transportation and Air transportation are highly regulated and followed universally by all the countries, road transportation is governed by regional and national regulations and there are a number of gaps observed in its implementation in the Indian scenario. During the discussions, he highlighted some of the key elements involved in safe road transportation and the best practices followed in various countries. “It is the responsibility of everyone in the supply chain and strict compliance is essential to avoid accidents and / or minimize its impact during all stages of transportation process,” he pointed out.

Referring to the Indian regulations related to road transportation under the Central Motor Vehicle rules 1989 and the challenges in implementation, he highlighted the need for focus on some key areas:

1. Improving the safety standards of logistic services available in India. Globally such logistics service providers are approved as per SQAS requirements by qualified third party inspectors.

2. Need for more training of vehicle drivers to reduce the gap in the availability of qualified drivers for driving hazardous chemicals.

3. Need for correct classification, MSDS, documentation, proper labeling and communication of hazards to the drivers as many chemicals are sold with branded names.

4. Increased awareness among various stake holders like logistic service providers, transporters, and emergency responders like police and fire brigade personnel.

5. Setting up chemical emergency response centers at different locations in the country, which can quickly respond to emergencies on road.

Mr. Murali shared some of the global best practices followed by Clariant in its operations worldwide which can be used in the Indian scenario as well. He concluded the discussion with an need to address the existing gaps in implementing CMV rules and the need to adopt some of the established global best practices which are already proven and can help in safe transportation of chemicals in India.

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.55.42
UK Pound	1	Rs.86.78
Euro	1	Rs.68.03

INFORMATION DETAILS

Report Prepared by :

VRN

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	8
--PROFITABILIRY	1~10	8
--LIQUIDITY	1~10	8
--LEVERAGE	1~10	7
--RESERVES	1~10	8
--CREDIT LINES	1~10	7
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	NO
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		67

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.