MIRA INFORM REPORT

Report Date :

30.08.2012

Note: Correct name of the company is KANORIA CHEMICALS AND INDUSTRIES LIMITED

IDENTIFICATION DETAILS

Name :	KANORIA CHEMICALS AND INDUSTRIES LIMITED
Registered Office :	"Park Plaza", 71, Park Street, Kolkata- 700 016, West Bengal
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	17.12.1960
Com. Reg. No.:	21-024910
Capital Investment / Paid-up Capital :	Rs.281.483 Millions
CIN No.: [Company Identification No.]	L24110WB1960PLC024910
Legal Form :	A Public Limited Liability company. The company’s Share are Listed on the Stock Exchange.
Line of Business :	Manufacturer of Alcho Chemicals
No. of Employees :	300 (Approximately)

RATING & COMMENTS

MIRA’s Rating :

A (60)

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 20590000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well established company having good track record. There appears slight dip in the turnover. However the profitability of the company increase tremendously. Trade relations are reported to be fair. Business is active. Payments are reported to be regular and as per commitments. The company can be considered for business dealing 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	AA- (Long Term Rating)
Rating Explanation	Having high degree of safety regarding timely servicing of financial obligation it carry very low credit risk.
Date	March, 2012

Rating Agency Name	CARE
Rating	A1+ (Short Term Rating)
Rating Explanation	Having very strong degree of safety regarding timely payments of financial obligation it carry lowest credit risk.
Date	March, 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.

INFORMATION PARTED BY

Name :	Mr. A. K. Agarwal
Designation :	General Manager (Account)
Contact No.:	91-33-22499466
Date :	27.08.2012

LOCATIONS

Registered Office :	"Park Plaza" 71, Park Street, Kolkata- 700 016, West Bengal, India
Tel. No.:	91-33-22499466 /22499472/22499473/22499474
Fax No.:	91-33-22499466
E-Mail :	akag@kanoriachem.com info@kanoriachem.com nksethia@kanoriachem.com
Website :	http://kanoriachem.com
Location :	Owned
Corporate Office :	Indra Prakash, 21 Barahamba Road, New Delhi – 110001, India
Tel. No.:	91-11-43579200
Fax No.:	91-11-23717203/ 23355824
Factory :	Saltworks P.O. Samakhali-370 150, Gandhidham (Gujarat) Alco Chemicals Segment Ankleshwar Chemical Works 3407, GIDC Industrial Estate, P.O. Ankleshwar-393 002, Gujarat, India Tel: 91-2646-668801-04 Fax: 91-2646-251816 Bio-Compost Plant Village Sengpur, Taluka: Ankleshwar-393 002, Gujarat, India Wind Farm Vill: Dhank Jaluka: Upleta, Dist: Rajkot, Gujarat, India Vizag Chemical Works Plot No.32, Jawalharlal Nehru, Pharma City, Parwada, Vishakhapatnam – 531 021 Tel: 91-8924-236056

DIRECTORS

As on 31.03.2012

Name :	Mr. H.K. Khaitan
Designation :	Director
Name :	Mr. Amitav Kothari
Designation :	Director
Name :	Mr. Ravinra Nath
Designation :	Director
Name :	Mr. G. Parthasarthy
Designation :	Director
Name :	Mr. S. I. Rao
Designation :	Director
Name :	Mr. B.D. Sureka
Designation :	Director
Name :	Mr. A. Vellayn
Designation :	Director
Name :	Mr. T.D. Bahety
Designation :	Director
Name :	Mr. J.P. Sonthalia
Designation :	Managing Director
Date of Birth/Age :	67 Years
Qualification :	B. Tech. Chemical Engineering, MBA
Experience :	44Years
Date of Appointment :	01.02.2007
Name :	R.V. Kanoria
Designation :	Chairman and Managing Director
Date of Birth/Age :	57 Years
Qualification :	B.Sc., MBA (Hons)
Experience :	38 Years
Date of Appointment :	10.01.1983

KEY EXECUTIVES

Name :	Mr. A. K. Agarwal
Designation :	General Manager (Account)

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

As on 30.06.2012

Category of Shareholder	No. of Shares	Percentage of Holding
(A) Shareholding of Promoter and Promoter Group
(1) Indian
Individuals / Hindu Undivided Family	2020125	3.59
Bodies Corporate	30098106	53.46
Sub Total	32118231	57.05
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	32118231	57.05
(B) Public Shareholding
(1) Institutions
Mutual Funds / UTI	30600	0.05
Financial Institutions / Banks	1202625	2.14
Insurance Companies	1268006	2.25
Foreign Institutional Investors	1361176	2.42
Any Others (Specify)	6102000	10.84
Multilateral Finance Corporation	6102000	10.84
Sub Total	9964407	17.70
(2) Non-Institutions
Bodies Corporate	4421007	7.85
Individuals
Individual shareholders holding nominal share capital up to Rs.0.100 million	5847162	10.39
Individual shareholders holding nominal share capital in excess of Rs.0.100 million	1610088	2.86
Any Others (Specify)	2335605	4.15
Clearing Members	65445	0.12
Trusts	292511	0.52
Directors and their Relatives and Friends	64831	0.12
Non Resident Indians	1792362	3.18
Any Others	120456	0.21
Sub Total	14213862	25.25
Total Public shareholding (B)	24178269	42.95
Total (A)+(B)	56296500	100.00
© Shares held by Custodians and against which Depository Receipts have been issued	0	0
(1) Promoter and Promoter Group	0	0
(2) Public	0	0
Sub Total	0	0
Total (A)+(B)+(C)	56296500	0.00

BUSINESS DETAILS

Line of Business :	Manufacturer of Alcho Chemicals
Terms :
Selling :	L/C, Cash and Credit
Purchasing :	L/C, Cash and Credit

GENERAL INFORMATION

Customers :

Wholesalers and Manufacturer

No. of Employees :

300 (Approximately)

Bankers :

· HDFC Bank, Kolkata, India

· UCO Bank, Kolkata, India

Facilities :

CC – Rs.40.000 Millions (Rs. in Millions)

Secured Loan	As on 31.03.2012	As on 31.03.2011
From Banks (Secured/to be secured by first charge and mortgage by deposit of title deeds of immovable properties and hypothecation of movable fixed assets, both present and future and pending creation of such security temporarily secured by pledge of units of mutual fund) (Repayable in ten half yearly installments beginning from 3rd December, 2012)	639.490	1150.550
Vehicle Financing from Banks (Secured by hypothecation of related vehicles.)	1.900	3.240
From Others	0.000	468.750
Working Capital Loans Repayable on Demand	0.000	271.140
Buyer's Credit 540.53 217.96 (Rs.244.59 million is secured against hypothecation by way of a subservient charge on all current assets and movable fixed assets of Ankleshwer plant and Rs. 295.94 million is secured by pledge of units of mutual funds)	540.530	217.960
Total	1181.920	2111.640
Unsecured Loan	As on 31.03.2012	As on 31.03.2011
Foreign Currency Convertible Bonds	0.000	893.00
Working Capital Loans Repayable on Demand	0.000	263.460
Buyer's Credit	0.000	42.620
Total	0.000	1199.080

Banking Relations :	--
Auditors :
Name :	Singh and Company Chartered Accountants
Wholly Owned Subsidiary:	Pipri Limited
Enterprises over which Key Management Personnel exercise significant influence:	K P L International Limited

CAPITAL STRUCTURE

As on 31.03.2012

Authorised Capital:

No. of Shares	Type	Value	Amount
100000000	Equity Shares	Rs.5/- each	Rs. 500.000Millions

Issued Capital:

No. of Shares	Type	Value	Amount
56296500	Equity Shares	Rs.5/- each	Rs.281.480 Millions

Subscribed & Paid-up Capital:

No. of Shares	Type	Value	Amount
56296500	Equity Shares	Rs.5/- each	Rs.281.480 Millions
	Add: Forfeited Shares (Amount paid up)		Rs.0.020 Million
	Total		Rs.281.500 Millions

Note:

1. Reconciliation of number of Shares (Nos.):

(Rs. in millions)

	31.03.2012
Outstanding at the beginning of the year	Rs.56.296 Millions
Outstanding at the end of the year	Rs.56.296 Millions

2. The Company has only one class of issued shares i.e. Equity Share having par value of Rs.5 per share. Each holder of Equity Share is entitled to one vote per share and equal right for dividend. The dividend proposed by the Board of Directors is subject to the approval of shareholders in the ensuing Annual General Meeting, except in case of interim dividend. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after payment of all preferential amounts, in proportion to their shareholding.

3. The company does not have a holding company.

4. Details of shareholders holding more than 5 percent equity shares:

Name of the Shareholders	As at 31 March, 2012
	No. of shares	% of Holding
Vardhan Limited	25,733,079	45.71
R V Investment & Dealers Limited	3,210,120	5.70
International Finance Corporation	6,102,000	10.84
Mega Resources Limited	2,986,720	5.31

5. No Shares have been reserved for issue under options and contracts/commitments for the sale of shares/disinvestment as at the Balance Sheet date.

6. 18,765,500 Equity Shares of Rs. 5 each as fully paid up Bonus Shares were allotted on 11th January, 2008 by Capitalisation of Capital Redemption Reserve.

7. None of the securities are convertible into shares at the end of the reporting period.

8. No calls are unpaid by any Director or Officer of the Company during the year.

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2012	31.03.2011	31.03.2010
SHAREHOLDERS FUNDS
1] Share Capital		281.500	281.500	281.500
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		4867.960	1951.450	2169.510
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		5149.460	2232.950	2451.010
LOAN FUNDS
1] Secured Loans		1181.920	2111.640	1977.390
2] Unsecured Loans		0.000	1199.08	1175.970
TOTAL BORROWING		1181.920	3310.720	3153.360
DEFERRED TAX LIABILITIES		169.950	537.810	564.860
TOTAL		6501.330	6081.480	6169.230
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		1854.430	5872.790	5213.090
Capital work-in-progress		579.540	100.450	537.850
INVESTMENT		3474.720	67.810	69.160
DEFERRED TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	196.400	652.620	586.170
	Sundry Debtors	289.580	652.770	511.200
	Cash & Bank Balances	169.500	251.560	24.020
	Other Current Assets	69.890	54.240	0.000
	Loans & Advances	349.140	313.660	238.800
Total Current Assets		1074.510	1924.850	1360.190
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	152.130	240.830	437.04
	Other Current Liabilities	192.750	801.300	75.220
	Provisions	136.990	842.290	498.800
Total Current Liabilities		481.870	1884.420	1011.060
Net Current Assets		592.640	40.430	349.130
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		6501.330	6081.480	6169.230

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income (Due to less order)	2905.000	4917.030	4211.81
		Other Income	218.760	22.040	125.150
		TOTAL	3123.760	4939.070	4336.960
Less	EXPENSES
		Cost of Raw Materials Consumed	1730.200	1983.300	1687.880
		Purchases of Stock- in – Trade	0.000	89.230	9.310
		Change in Inventories of finished goods, work-in-progress and Stock-in-Trade	(16.730)	(8.260)	68.820
		Employees Benefits Expense	194.210	375.560	332.470
		Manufacturing Expenses	0.000	0.000	1062.200
		Other Expenses	788.490	1640.300	299.580
		TOTAL	2696.170	4080.130	3460.260
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		427.590	858.940	876.700
Less	FINANCIAL EXPENSES		136.010	232.650	232.350
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		291.580	626.290	644.350
Less/ Add	DEPRECIATION/ AMORTISATION		157.030	410.330	399.560
	PROFIT BEFORE EXCEPTIONAL AND EXTRAORDINARY ITEMS AND TAX		134.550	215.960	244.790
Less/ Add	EXCEPTIONAL ITEMS		3570.370	(1.560)	143.150
	PROFIT BEFORE TAX		3704.920	214.400	387.940
Less	TAX		648.710	44.610	108.190
	PROFIT AFTER TAX		3056.210	169.790	279.750
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		91.510	268.410	231.870
Less	APPROPRIATIONS
		Transfer to General Reserve	1500.000	20.000	150.000
		Dividend	84.440	281.480	84.440
		Tax on Dividend	13.700	45.210	8.770
	BALANCE CARRIED TO THE B/S		1549.580	91.510	268.410
	EARNINGS IN FOREIGN CURRENCY
		F.O.B. Value of Exports	145.500	466.500	482.060
		Other Earnings	0.000	2.500	0.000
	TOTAL EARNINGS		145.500	469.000	482.06
	IMPORTS
		Raw Materials	302.310	348.220	328.020
		Stores & Spares	43.520	37.550	49.200
		Capital Goods	335.680	57.790	4.920
		Others	0.000	84.710	0.000
	TOTAL IMPORTS		681.51	528.27	382.140
	Earnings Per Share (Rs.) [Basic]		54.29	3.02	4.97
	Earnings Per Share (Rs.) [Diluted]		54.29	2.21	3.63

Expected Sales (2012-13): Rs.3000.000 Millions

The above information has been parted by Mr. A.K. Agarwal

QUARTERLY / SUMMARISED RESULTS

PARTICULARS	30.06.2012
Type	1^st Quarter
Net Sales	588.800
Total Expenditure	607.800
PBIDT (Excl OI)	(19.000)
Other Income	97.100
Operating Profit	78.100
Interest	20.300
Exceptional Items	0.000
PBDT	57.800
Depreciation	27.300
Profit Before Tax	30.500
Tax	4.800
Provisions and contingencies	0.000
Profit After Tax	25.700
Extraordinary Items	0.000
Prior Period Expenses	0.000
Other Adjustments	0.000
Net Profit	25.700

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	97.84	3.44	6.45
Net Profit Margin (PBT/Sales)	(%)	127.54	4.36	9.21
Return on Total Assets (PBT/Total Assets}	(%)	126.49	2.75	5.90
Return on Investment (ROI) (PBT/Networth)		0.72	0.10	0.16
Debt Equity Ratio (Total Liability/Networth)		0.32	2.33	1.70
Current Ratio (Current Asset/Current Liability)		2.23	1.02	1.35

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	No
8]	No. of employees	Yes
9]	Name of person contacted	Yes
10]	Designation of contact person	Yes
11]	Turnover of firm for last three years	Yes
12]	Profitability for last three years	Yes
13]	Reasons for variation <> 20%	Yes
14]	Estimation for coming financial year	Yes
15]	Capital in the business	Yes
16]	Details of sister concerns	Yes
17]	Major suppliers	No
18]	Major customers	No
19]	Payments terms	Yes
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

THE YEAR IN REVIEW:

The manufacturing sector in the year 2011-12 witnessed a sharp slowdown in growth. Strong inflationary pressures, a tight monetary policy and supply side constraints created a negative impact on the manufacturing sector.

Despite the challenges, it was a year of restructuring and diversification for KCI. Apart from the diversification initiative as given in the section 'New Frontiers', the Company added strength to the R&D Centre that was set up last year at KCI's integrated manufacturing facility at Ankleshwar in the state of Gujarat. During the year, the Centre worked to develop downstream derivatives of the Company's existing products and was successful in developing esters of Pentaerythritol.

The Centre is equipped to undertake product development activity in terms of synthesis, analysis and scale feasibility up to few kilograms. The Centre is also expected to soon develop capability of pilot plant facility for scale up and initial supply, as well as HAZOP study for safe processes. The R&D Centre strengthens the Company's in-house testing and analysis capabilities and is expected to outsource services in the near future to generate a revenue stream.

The Company commissioned the Hexamine plant at Vishakhapatnam in the state of Andhra Pradesh with a capacity of 5,600 TPA. It also enhanced the production capacity of Hexamine by 2,000 TPA at the Ankleshwar plant, taking the combined Hexamine manufacturing capacity at both plants to 11,600 TPA. The enhanced capacity consolidates KCI's leadership position in India for the product.

MANAGEMENT DISCUSSION AND ANALYSIS:

Financial Performance with respect to Operational Performance

The Financial Year 2011-12 witnessed a major event in the form of divestment of KCI's Chloro Chemicals Division in the month of May 2012. As a result of this divestment, the Company witnessed a sharp decline in its revenue and operating profits. The divestment also had many positives in the form of significant reduction in the debt profile and availability of cash which could be used for diversification in high growth areas.

During the year under review, the Revenue from Operations was at Rs. 2905.000 million as compared to Rs. 4917.000 million in the previous year. In spite of supply constraints and steep increase in the prices of various inputs coupled with the dumping of Pentaerythritol and Hexamine from European and Middle East countries, the Profit before exceptional and extraordinary items and Tax was at Rs. 135.000 million as against Rs. 216.000 million in the previous year which as a percentage to Revenue from Operations marginally increased from 4.39% in the previous year to 4.63% in the year under review.

The divestment of Chloro Chemicals Division resulted in a pre-tax profit of Rs. 3580.000 million. As a result, Profit before Tax was significantly higher at Rs. 3705.000 million as compared to Rs. 214.000 million in the previous year. The Net Profit for the year as a result of divestment was also higher at Rs. 3056.000 million as compared to Rs. 170.000 million in the previous year.

The total borrowings (long term, short term and current maturities) reduced from Rs. 3785.000 million in the previous year to Rs. 1255.000 million in the current financial year. The Net Worth of the Company increased from Rs. 2233.000 million in the previous year to Rs. 5149.000 million in the year under review. The Company's total investments as at the end of financial year 2011-12 were at Rs. 3475.000 million.

CHLORO CHEMICALS SEGMENT:

The Company's Chloro Chemicals business was divested to Aditya Birla Chemicals (India) Limited and the transaction was completed in May 2011. Considering that at the time of writing this report, the Chloro Chemicals business of the Company had already been divested to Aditya Birla Chemicals (India) Limited, commenting on the business is considered inappropriate for KCI.

INDUSTRY STRUCTURE AND DEVELOPMENT:

The Alco Chemicals Division located at Ankleshwar, Gujarat comprises the production of ethanol from molasses and Formaldehyde from methanol, which is further synthesized into several products for industrial applications. These products include Pentaerythritol, Sodium Formate, Acetaldehyde, Hexamine and others. KCI's new Greenfield project at Vizag increases the Company's production capacity of Formaldehyde and Hexamine.

PERFORMANCE:

The operations of the Alco Chemicals Division remained stable during the year. Revenue from the sale of Pentaerythritol during 2011-12 was Rs. 662 million compared to Rs. 555 million in the previous year. Production of Formaldehyde also improved with increasing capacity at Vishakhapatnam and revenue accruing from it increased from Rs. 405 million in 2010-11 to 836 million in 2011-12.

OUTLOOK:

Market leadership position in several products provides the Division a competitive edge in the market. Expected development of new value added products like Phenol Formaldehyde resins would improve the product mix. Anti dumping action on some countries expected to prevent cheaper imports driving down prices. Extensive backward and forward integration of products and processes, and the innovative use of waste ensure positive commercial impact.

CAPACITY EXPANSION DURING THE YEAR:

KCI's Greenfield project in Vishakhapatnam for the production of 105,000 TPA of Formaldehyde and 5,600 TPA of Hexamine was commissioned in December 2010, with the Formaldehyde plant starting commercial production. During the year under review, the Hexamine plant also began commercial production. The Hexamine capacity at the Company's Alco Chemicals Division at Ankleshwar in the state of Gujarat was also enhanced by 2,000 TPA. With this, the Company's combined Hexamine manufacturing capacity at both locations has increased to 11,600 TPA.

INITIATIVES DURING THE YEAR:

Commissioned back pressure turbine at Vizag for utilizing steam generated during production of Formaldehyde. Achieved reduction in consumption of energy 0by optimizing water flow in cooling tower and recycling wash water and steam condensate. New R&D Centre established at Ankleshwar for development of new products and the processes

OVERVIEW:

As already mentioned in the last year’s report, the Company divested its Chloro Chemicals business. The transaction was completed in the month of May 2011. The Company is in the process of developing new businesses.

During the year, the Company successfully commissioned 5,600 TPA Hexamine plant at Vishakhapatnam in the state of Andhra Pradesh, and enhanced the Hexamine capacity at Ankleshwar by 2,000 TPA. With this, the Company's combined Hexamine manufacturing capacity at both locations has increased to 11,600 TPA.

The Company's is setting up a 5 MW Solar Power Project in Jodhpur District in the state of Rajasthan. The Project is expected to be commissioned in June 2012.

The Company has acquired 90% stake in APAG Holding AG, Switzerland on 2 May 2012, at a purchase consideration of CHF 6.39 million. As per the terms of the Share and Loan Purchase Agreement (SLPA), entered in this regard on 20 April 2012, as amended vide Addendum Letter dated 30 April 2012, the Company will be acquiring the balance 10% stake by 30 June 2014, on the basis of a pre fixed formula set out in the SLPA.

APAG Holding AG, through its wholly owned subsidiary, APAG Elektronik AG, Switzerland, is engaged in development and sale of electronic and mechatronic modules and control devices for the automotive, consumer goods, power tool electronics and building automation industries. The designing and engineering facility of the company is located in Switzerland, whereas the manufacturing facility is located in the Czech Republic under a wholly owned subsidiary APAG Electronik s.r.o.

The Company is in the process of setting up a textile manufacturing unit in Ethiopia which is targeted to be completed by the end of 2013.

CONTINGENT LIABILITIES AND COMMITMENTS:

(to the extent not provided for)

(Rs. in millions)

(i) Contingent Liabilities (a) Claims/Disputed liabilities not acknowledged as debt
Nature of Contingent Liability	Status Indicating Uncertainties	31.03.2012
Demand notices issued by Central Excise Department	The matter is pending with Commissioner (Appeal)	4.520
Sales tax/VAT demands issued by assessing authority	The matter is pending with Trade Tax Tribunal (paid Rs. 0.43 million)	0.430
Income tax demands issued by DCIT	The matter is pending with CIT (Appeal)	128.130
(b) Outstanding Bank Guarantees		16.860
(c) Corporate Guarantee given to Gujarat Industrial Development Corporation for securing loan by Bharuch Eco -Aqua Infrastructure Limited.		11.63
(ii) Commitments Estimated amount of contracts remaining to be executed on capital account and not provided for		102.100
Advances paid		4.570

STATEMENT OF UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED

30TH JUNE, 2012

(Rs. in Millions)

Particulars	Quarter ended
	30.06.2012 Unaudited
1. Income from operations
a) Net Sales / Income from operations (net of excise duty)	584.100
b) Other operating Income	4.7000
Total Income from operations (net)	588.800
2. Income from Investments (refer note 3)	90.700
3. Net sales/Income from Operations and Investments	679.500
4. Expenses
1. Cost of materials consumed	401.900
2. Changes in inventories of finished goods, work-in-progress and stock-in-trade	(16.100)
3. Employee benefits expense	41.900
4. Power & Fuel	74.400
5. Depreciation & Amortisation	27.300
6. Other expenses	105.700
Total Expenses	635.100
5. Profit from operations & Investments before other Income, Finance costs and Exceptional items	44.400
6. Other Income	6.400
7. Profit from ordinary activities before Finance Costs and Exceptional Items	50.800
8. Finance costs	20.300
9. Profit from Ordinary Activities after Finance Costs but before Exceptional items & Tax	30.500
10. Exceptional item	0.000
11. Net profit from ordinary activities before tax	30.500
12. Tax Expenses	4.800
13. Net Profit from Ordinary Activities after tax	25.700
14. Extraordinary items (net of tax expense)	0.000
15. Net Profit for the period	25.700
16 Paid up Equity Share Capital (Rs 5/- per Share) 16. Rs.	281.500
17. Reserves (excluding Revaluation Reserve)	0.000
18. Earings per Shares (Rs.) - Basic & Diluted	0.46
A. PARTICULARS OF SHAREHOLDING
1. Public shareholding *
- Number of shares	24178269
- Percentage of shareholding	42.95%
2. Promoters and promoter group Shareholdings
a) Pledged / Encumbered
- Number of shares	Nil
- Percentage of shares (as a percentage of the total shareholding of promoter and promoter group)	Nil
- Percentage of shares (as a percentage of the total share capital of the company)	Nil
b) Non-Encumbered
- Number of shares	32118231
- Percentage of shares (as a percentage of the total shareholding of promoter and promoter group)	100.00%
- Percentage of shares (as a percentage of the total share capital of the company)	57.05%

Notes :

1. The above results have been reviewed by the audit committee and approved by the Board of Directors at its Meeting held on 8th August, 2012. The above results have been reviewed by the Statutory Auditors of the Company as per clause 41 of the listing agreement.

2. Consequent upon divestment of Chloro Chemicals Division in May 2011, the Company now operates in a single primary business segment viz. Alco Chemicals and hence no segment disclosure has been made for the quarter. However during the corresponding previous period the result as given below includes operation of the Chloro Chemicals Segment and hence are not comparable with the current period figures.

Particulars	Quarter ended 30.06.2011
	Chloro Chemicals	Alco Chemicals	Total
Segment Revenue (net of excise)	5,993	5,045	11,038
Segment Results (Profit before Tax and Finance Costs)	1,140	65	1,205
Less :
i) Finance Costs			764
ii) Profit on slump sale of Chloro Chemical Business			(35,797)
iii) Other un-allocable expenditure net off un-allocable income			( 50)
Profit before Tax			36,288

3. Income from Investments represent the income earned on the temporary investments made out of proceeds from sale of Chloro Chemicals Division. These temporary investments have been made due to surplus funds available in the interim and shall be deployed in businesses in due course.

4. Managerial Remuneration of Rs. 6.000 Millions related to FY' 2011-12 and Rs. 2.700 Millions related to quarter ended June, 2012 is subject to approvals from Shareholders and Central Government.

5. The Company has commissioned 2.5 MW Solar Power Plant at Village Bawdi Barsinga, Tehsil Phalodi, Dist Jodhpur in the State of Rajasthan, out of the total Plant capacity of 5 MW.

6. The Company has incorporated a subsidiary in Ethiopia by the name of Kanoria Africa Textiles Plc to set up a textile manufacturing business in Ethiopia.

7. The Board of Directors of the Company have approved a Buy-back of upto 1,20,00,000 Equity Shares of the Face Value of Rs.5/- each at a price not exceeding Rs. 42/- per Equity Share payable in cash for an aggregate amount not exceeding Rs. 504.000 Millions under the “Open Market” mechanism through the Stock Exchanges.

8. The figures for the quarter ended 31st March, 2012 are the balancing figures between audited figures in respect of the full financial year and the published year to date figures upto the third quarter of the financial year 2011-12.

FIXED ASSETS:

· Land and Site Development

· Leasehold land and Site Development

· Buildings

· Plant and Machinery

· Furniture and Fixture,

· Office and Laboratory

· Equipments

· Vehicles

· Fork Lifts

· Railway Siding

· Weigh Bridge

· Computer Software

PRESS RELEASE:

Aditya Birla Chemicals buys Kanoria Chem unit for Rs 8300.000 Millions

Mumbai, April 16: 

Aditya Birla Chemicals (ABCIL), a subsidiary of Hindalco Industries, has acquired the Chloro Chemical Division of Kanoria Chemicals and Industries for Rs 8300.000 Millions

The chemical division comprises manufacturing facility for chlor-alkalis, chlorine derivatives and water treatment at Renukoot in Uttar Pradesh and Salt Works in Gujarat.

ABCIL proposes to finance 60 per cent of the deal through debt and remaining from equity and internal accruals.

The deal, which is expected to be completed by May-end, will more than double the caustic soda capacity of ABCIL to 220,000 tonnes a year (tpa) from 105,000 tpa. ABCIL produces chlor-alkali at its Rehla plant in Jharkhand.

Driven by latest manufacturing technology, the chloro chemical division of Kanoria is highly cost competitive with captive power plants, coal linkage and forward integration into value added chlorine derivatives. It recorded a revenue of Rs 3030.000 Millions and profit before interest and tax of Rs 470.000 Millions in the 2009-2010 financial year.

ABCIL clocked a revenue of Rs 2220.000 Millions (Rs 2040.000 Millions) and net profit of Rs 610.000 Millions (Rs 460.000 Millions) in the 2009-10 fiscal. In the December quarter of 2010-11 fiscal, its revenues were up 20 per cent at Rs 550.000 Millions (Rs 460.000 Millions) and net profit more than doubled to Rs 90.000 Millions (Rs 40.000 Millions).

Mr Kumar Mangalam Birla, Chairman, Aditya Birla Group, said the acquisition is a compelling strategic fit and solidifies the group's position as the country's largest producer of chlor-alkali, a critical input for the aluminium sector.

“Given the large expansion plans in our aluminium business, the deal serves as an excellent sourcing point. The business has potential for both growth in revenues and earnings,” he said.

Mr R.V. Kanoria, Chairman and Managing Director, Kanoria Chemicals, said that the funds realised from the transaction would be used for expanding other existing businesses and to consider opportunities in new and related business. “The land and infrastructure available at our manufacturing facility at Visakhapatnam provides an immediate opportunity to expand and diversify our business,” he said.

Caustic soda is one of the essential inputs for the manufacture of alumina and is also used widely in various other industries. Several new alumina manufacturing facilities are being set up in the eastern region, offering growth opportunities. Besides, the demand for other chlorine derivatives is also looking up.

Mr Lalit Naik, Business Head for Chemicals, Aditya Birla Group, said the acquisition offers significant potential and infrastructure to expand the business which will serve the increasing need for caustic soda. “In addition, we also expect significant operational synergies on account of logistics and other cost savings,” he said.

Aditya Birla Chemicals plans to invest Rs 10000.000 Millions in two years for setting up greenfield projects for producing caustic soda of 150,000 tonnes per annum at Vilayat and another 75,000-90,000 tpa at Patalganaga in Gujarat, said Mr Naik.

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.55.67
UK Pound	1	Rs.88.05
Euro	1	Rs.69.92

INFORMATION DETAILS

Information Gathered by :	SBA
Report Prepared by :	MRI

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	6
PAID-UP CAPITAL	1~10	6
OPERATING SCALE	1~10	6
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--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		60

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.