MIRA INFORM REPORT

Report Date :

05.09.2012

IDENTIFICATION DETAILS

Name :	EICL LIMITED (w.e.f 27.06.2012) BHARAT STARCH INDUSTRIES (A DIVISION OF EICL LIMITED)
Formerly Known As :	ENGLISH INDIANS CLAYS LIMITED
Registered Office :	TC-79/4, Veli, Thiruvananthapuram- 695 021, Kerala
Country :	India
Financials (as on) :	31.03.2012
Date of Incorporation :	18.11.1963
Com. Reg. No.:	09-002039
Capital Investment/ Paid-up Capital:	Rs.400.552 Millions
CIN No.: [Company Identification No.]	L26939KL1963PLC002039
Legal Form :	A Public Limited Liability Company. The company’s Shares are Listed on the Stock Exchange.
Line of Business :	The Company is engaged in the business of mining of clay (kaolin) and manufacturing of processed clay, starch and allied products.
No. of Employees:	Not Available

RATING & COMMENTS

MIRA’s Rating :

Ba (54)

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

Maximum Credit Limit :	USD 15200000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is part of ERSTWHILE Thapar Group. It is a well established and reputed company. Directors are reported to be an experience business men. Company performance capacity appears to good. But there appears dip in the profitability. However networth appears to be strong. Trade relations are reported to be fair. Business is active. Payments are reported to be regular. The company can be considered for normal 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

INDIAN ECONOMIC OVERVIEW

India is developing into an open-market economy, yet traces of its past autarkic policies remain. Economic liberalization, including industrial deregulation, privatization of state-owned enterprises, and reduced controls on foreign trade and investment, began in the early 1990s and has served to accelerate the country's growth, which has averaged more than 7% per year since 1997. India's diverse economy encompasses traditional village farming, modern agriculture, handicrafts, a wide range of modern industries, and a multitude of services. Slightly more than half of the work force is in agriculture, but services are the major source of economic growth, accounting for more than half of India's output, with only one-third of its labor force. India has capitalized on its large educated English-speaking population to become a major exporter of information technology services and software workers. In 2010, the Indian economy rebounded robustly from the global financial crisis - in large part because of strong domestic demand - and growth exceeded 8% year-on-year in real terms. However, India's economic growth in 2011 slowed because of persistently high inflation and interest rates and little progress on economic reforms. High international crude prices have exacerbated the government's fuel subsidy expenditures contributing to a higher fiscal deficit, and a worsening current account deficit. Little economic reform took place in 2011 largely due to corruption scandals that have slowed legislative work. India's medium-term growth outlook is positive due to a young population and corresponding low dependency ratio, healthy savings and investment rates, and increasing integration into the global economy. India has many long-term challenges that it has not yet fully addressed, including widespread poverty, inadequate physical and social infrastructure, limited non-agricultural employment opportunities, scarce access to quality basic and higher education, and accommodating rural-to-urban migration.

Source : CIA

EXTERNAL AGENCY RATING

Rating Agency Name	FITCH
Rating	A (Long Term Rating)
Rating Explanation	Having low risk of default. The capacity for payment of financial commitments is considered strong.
Date	June 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 :	TC-79/4, Veli Thiruvananthapuram -695 021 Kerala, India
Tel. No.:	91-471-2741133/4095111
Fax No.:	91-471-2742233
E-Mail :	Claysales.trv@eicl.in
Head Office :	N-75, Connaught Circus, New Delhi – 110001, India
Tel. No.:	91-11-47609900/47609955/47609966
Fax No.:	91-11-47609923
Email:	info@eicl.in
Corporate Office :	801-803, Tower-B, 8th Floor Global Business Park, Mehrauli-Gurgaon Road, Gurgaon-122 001, (Haryana), India
Tel. No.:	91-124-2803379-383
Fax No.:	91-124-2803372
Email:	sect@eicl.in
Factory 2 :	Radaur Road, P.O Yamunanagar – 135001, Haryana, India
Factory 3:	Plot no.145, SEZ Road, Machenahalli Industrial Area, Nidige Post, Shimoga – 577222, Karnataka, India

DIRECTORS

As on 31.03.2012

Name :	Mr. Karan Thapar
Designation :	Chairman
Name :	Mr. S. K. Toshniwal
Designation :	Director
Name :	Mr. J. K. Jain
Designation :	Director
Name :	Mr. Vijay Rai
Designation :	Director
Name :	Mr. Praveen Sachdev
Designation :	Director
Name :	Mr. T. Balakrishnan
Designation :	Director (w.e.f.01.05.2012
Name :	Mr. Rahul Gupta
Designation :	Executive Director
Date of Birth:	58 Years
Qualification:	B.Tech (IIT. Delhi), MS (Chemical Engineering )
Experience:	37 Years
Date of Appointment:	02.03.2009

KEY EXECUTIVES

Name :	Mr. S. K. Jain
Designation :	Senior. Vice president Corporate Finance Accounts and Administration

Name :	MR. P. S. Saini
Designation :	Company Secretary Head Corporate - Legal

Name :	Mr. Praneet Mehrish
Designation :	Senior Vice president (Corporation HR)
Date of Birth:	56 Years
Qualification:	PGD (PM and IR)
Experience:	32 Years
Date of Appointment:	01.06.2010
Lat employment held:	Essar Steel

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
Individuals / Hindu Undivided Family	116988	0.23
Bodies Corporate	39057615	77.69
Sub Total	39174603	77.92
(2) Foreign
Total shareholding of Promoter and Promoter Group (A)	39174603	77.92
(B) Public Shareholding
(1) Institutions
Foreign Institutional Investors	2993544	5.95
Sub Total	2993544	5.95
(2) Non-Institutions
Bodies Corporate	2568373	5.11
Individuals
Individual shareholders holding nominal share capital up to Rs. 0.100 Million	4948798	9.84
Individual shareholders holding nominal share capital in excess of Rs. 0.100 Million	420000	0.84
Any Others (Specify)	170695	0.34
Clearing Members	68682	0.14
Non Resident Indians	101743	0.20
Others	270	0.00
Sub Total	8107866	16.13
Total Public shareholding (B)	11101410	22.08
Total (A)+(B)	50276013	100.00
(C) Shares held by Custodians and against which Depository Receipts have been issued
Total (A)+(B)+(C)	50276013	-

BUSINESS DETAILS

Line of Business :

The Company is engaged in the business of mining of clay (kaolin) and manufacturing of processed clay, starch and allied products.

PRODUCTION STATUS As on 31.03.2011

Particulars	Unit	Licensed Capacity	Installed Capacity Annual*	Actual Production
Clay products.	MT		282200	170394*
starch and its allied products	MT		96383	55912**

Licensed capacity As per the latest Industrial Policy of the Government of India Clay and Starch manufacturing Industry is delicensed

* As certified by management and accepted by auditors, being a technical matter.

*Out of the above of Nil MT (2009-10 : Nil MT) were used for manufacture of High end Products.

** Out of the above of 25 MT (2009-10 : 107 MT) were used for manufacture of allied products.

GENERAL INFORMATION

No. of Employees :

Not Available

Bankers :

· Axis Bank Limited

· State Bank of India

· Yes Bank Limited

· ICICI Bank Limited

· Indusind Bank Limited

Facilities :

Rs. In Millions

Secured Loans	As on 31.03.2012	As on 31.03.2011
LONG TERM BORROWINGS
Rupee term loan from banks (note a)	446.875	358.750
Foreign currency loans from banks (note b)	72.285	0.000
SHORT TERM BORROWINGS
Cash credit account with scheduled	155.178	94.102
banks Working capital demand loans	350.000	200.000
	1024.338	652.852

Notes:

LONG TERM BORROWINGS

a)Rupee term loan from banks comprises of:

· Loan of Rs. 200.000 Millions taken from Axis Bank during the financial year 2007-08 and carries interest @ base rate+2.50% p.a. The loan is repayable in 16 equal quarterly installments starting from September 28,2008.

· Loan of Rs. 250.000 Millions taken from Axis Bank during the financial year 2010-1 land carries interest @ base rate+2.50% p.a. The loan is repayable in 16 equal quarterly installments starting from September 27,2011

.

· Loan of Rs.200.000 Millions taken from State Bank of India during the financial year 2008-09 and carries interest @ base rate + 3.50%p.a.The loan is repayable in 16 quarterly installments starting from June 30, 2009. It includes Rs.40.000 Millions (2010-11: Rs.120.000 Millions) borrowed from a bank and is convertible into equity shares in case of default.

· Loan of Rs.250.000 Millions taken from State Bank of India during the financial year 2010-11 and carries interest @ base rate +3.25% p.a. The loan is repayable in 16 equal quarterly installments starting from October 28,2011.

· Loan of Rs. 200.000 Millions taken from Yes Bank during the financial year 2009-10 and carries interest @ base rate+2.80% p.a. The loan is repayable in 8 equal quarterly installments starting from December 24,2010.

· Loan of Rs. 200.000 Millions taken from Indusind Bank during the financial year 2011-12 and carries interest @ base rate+2.00% p.a. The loan is repayable in 12 equal quarterly installments starting from September 30,2012.

b)Loan of Rs.275.000 Millions (including ECB of USD5,000,000) sanctioned by ICICI Bank of which USD 1.500,000 taken from ICICI Bank during the financial year 2011-12 and carries interest @Libor + 4.65%p.a.The loan is repayable in 56 quarterly installments starting from March 8,2012.

c)All term loans from banks are secured by an equitable charge of all immovable properties of the Company, both present and future and are also secured by way of hypothecation of the Company's movable properties including movable plant and machinery, machinery spares, tools and accessories and other movables both present and future (save and except book debts) subject to prior charges created in favour of the Company's bankers on stocks of raw materials, consumable stores, finished goods etc. For working capital facilities. The above charges rank pari-passu with charges created/to be created by the Company in favour of other term lending banks.

d)Deposits from public

Deposits from public carry interest rate ranging from 9.00% tol0.50% p.a. and the same is repayable within a period of 1 to 3 years from the date of deposit as per the scheme opted by the deposit holder.

e)Other loans and advances

Intercorporate deposits includes loan taken from Sewastuti Finance Private limited @ 10.00% and is repayable within 1 year from the date of deposit.

f)Current maturities of long term liabilities are disclosed under the head other current liabilities.

Unsecured Loans	As on 31.03.2012	As on 31.03.2011
LONG TERM BORROWINGS
Public Deposits (note d)
From public	45.821	39.541
From related parties	19.000	0.000
Other loans and advances (note e)
Intercorporate deposits	0.000	0.000
SHORT TERM BORROWINGS
Loans repayable on demand
From banks	0.000	90.000
Total	64.821	129.541

SHORT TERM BORROWINGS

Notes:

a) Cash credit and working capital demand loans along with guarantees and letters of credit facilities given by the banks are secured by hypothecation of finished goods, semi-finished goods, consumable stores and spares, raw material and book debts at Yamunanagar, Puducherry, Thiruvananthapuram and Shimoga factories and second pari passu charge on block of fixed assets of the Company.

b)Cash credit and working capital demand loans from the bank comprises of the following :

· Cash credit of Rs.300.000 Millions sanctioned by Axis Bank is repayable on demand and carries interest rate at base rate + 2.50% p.a. (Including a sub-limit of Rs.300.000 Millions as working capital demand loan at base rate + 2.00% p.a.).

· Cash credit / working capital demand loan of Rs.200.000 Millions from State Bank of India is repayable on demand and carries interest rate at base rate + 3.25% p.a. Working capital demand loan of Rs.100.000 Millions is availed at 11.25% p.a.

· Cash credit /working capital demand of Rs.100.000 Millions from Yes Bank is repayable on demand and carries interest rate at base rate+2.25%p.a.

· Cash credit / working capital demand loan of Rs.150.000 Millions from Induslnd Bank is repayable on demand and carries interest rate at base rate + 2.25% p.a. Working capital demand loan of Rs.150.000 Millions is availed at 11.55 % p.a

Banking Relations :	--
Auditors :
Name :	Walker, Chandiok and Company Chartered Accountants
Holding Company	DBH International Private Limited
Associates	Karun Carpets Private Limited
Enterprises over which substantial shareholders of the Company and their relatives, have significant influence:	· Greaves Cotton Limited. · Premium Transmission Limited. · Pembril Industrial and Engineering Company. Private. Limited. · Greaves Leasing Finance Limited. · Dee Greaves Limited. · Bharat Starch Products Limited. · Aravali Sports and Cultural Foundation · DBH Consulting Limited · DBH Investments Private. Limited. · Greaves Farymann Diesel GmbH · Greaves Auto Limited. · Greaves Cotton Netherlands B.V.

CAPITAL STRUCTURE

As on 31.03.2012

Authorised Capital :

No. of Shares	Type	Value	Amount
90000000	Equity Shares	Rs.2/- each	Rs.180.000 Million
3000000	Preferences Shares	Rs.100/-each	Rs.300.000 Million
	Total		Rs.480.000 Million

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
50276013	Equity Shares	Rs.2/- each	Rs.100.552 Million
3000000	11% cumulative redeemable Preferences Shares	Rs.100/-each	Rs.300.000 Millions
	Total		Rs.400.552 Millions

NOTES

RECONCILIATION OF THE SHARES OUTSTANDING AT THE BEGINNING AND AT THE END OF THE REPORTING PERIOD

Equity Shares	As on 31.03.2012
	Number	Amount
Shares outstanding at the beginning of the year	50276013	100.552 Million
Shares outstanding at the end of the year	50276013	100.552 Million

During the previous year, the equity shares of the Company have been sub divided into 5(five) equity shares of Rs.2 each fully paid up against 1 (one) equity share of Rs.10 each fully paid up.

Preference Shares	As on 31.03.2012
	Number	Amount
Shares outstanding at the beginning of the year	3000000	300.000
Shares outstanding at the end of the year	3000000	300.000

TERMS AND RIGHTS ATTACHED TO EQUITY SHARES

The Company has only one class of equity shares having the par value of Rs. 2 per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividend in Indian Rupees.

During the year ended March 31, 2012 the amount of per share dividend recognised as distributions to equity shareholders was Rs. 0.30 (2010-11:Rs.1 per share).

In the events of liquidation of the Company, the holder of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

TERMS AND RIGHTS ATTACHED TO PREFERENCE SHARES

Preference shares carry a cumulative dividend of 11% p.a. Each holder of preference share is entitled to one vote per share only on resolutions placed before the Company which directly affect the rights attached to cumulative preference shares. The Company declares and pays dividend in Indian Rupees.

During the year ended March 31,2012 the amount of per share dividend recognised as distributions to preference shareholders was Rs.11.00 (2010-11:Rs. 11.00 per share) of which dividend proposed by the board of directors subject to the approval of the shareholders is Rs. 5.50 per share (2010-11 :Rs. 5.50 per share).

11% Cumulative redeemable preference shares are redeemable at par at the option of the Company not earlier than 18 months but not later than 5 years from the date of allotment / renewal September 4,2011 and October 1, 2009 for Rs. 200.000 Millions and Rs. 100.000 Millions respectively, i.e. between March 04, 2013 to September 04,2016 and March 31, 2011 to September 30, 2014 respectively.

Shares held by Holding Company

Equity Shares	As on 31.03.2012
	Number	Amount
DBH International Private Limited, Holding Company	25658240	51316480

Preference shares	As on 31.03.2012
	Number	Amount
DBH International Private Limited, Holding Company	2000000	200.000

e) Aggregate number of bonus shares, equity shares issued for considerations other than cash and shares bought back during the period of five years immediately preceding the reporting period.

Equity Shares	2010-11	2009-10	2008-09	2007-08	2006-07
Fully paid up by way of bonus shares	27931118	-	-	-	-

Particular	As on 31.03.2012
Name of Share holders	Number	Amount
Equity Shares :
DBH International Private Limited	25658240	51.03
Karun Carpets Private Limited	13399375	26.65
Lotus Global Investments Limited 11%	2993544	5.95
Preference shares
DBH International Private Limited	2000000	66.66
Karun Carpets Private Limited	1000000	33.34

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		400.552	400.552	344.690
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		1142.975	1050.419	899.322
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		1543.527	1450.971	1244.012
LOAN FUNDS
1] Secured Loans		1027.338	652.852	816.750
2] Unsecured Loans		64.821	129.541	254.811
TOTAL BORROWING		1092.159	782.393	1071.561
DEFERRED TAX LIABILITIES		228.043	203.680	190.881
TOTAL		2863.729	2437.044	2506.454
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		2435.977	2023.478	1968.200
Capital work-in-progress		85.265	312.297	145.085
INVESTMENT		0.500	0.500	0.500
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	425.428	366.203	295.016
	Sundry Debtors	463.196	460.421	381.822
	Cash & Bank Balances	56.190	52.104	67.882
	Other Current Assets	45.010	10.153	1.378
	Loans & Advances	225.154	203.840	138.264
Total Current Assets		1214.978	1092.721	884.362
Less : CURRENT LIABILITIES & PROVISIONS
	Sundry Creditors	307.970	303.283	317.813
	Other Current Liabilities	491.484	579.205	37.059
	Provisions	73.537	109.464	136.821
Total Current Liabilities		872.991	991.952	491.693
Net Current Assets		341.987	100.769	392.669
MISCELLANEOUS EXPENSES		0.000	0.000	0.000
TOTAL		2863.729	2437.044	2506.454

PROFIT & LOSS ACCOUNT

	PARTICULARS		31.03.2012	31.03.2011	31.03.2010
	SALES
		Income	3780.852	3561.498	3364.611
		Other Income	18.443	17.599	17.203
		TOTAL (A)	3799.295	3579.097	3381.814
Less	EXPENSES
		Cost of Material consumed	1583.948	1420.970
		Purchase of Trade goods	48.943	0.000
		Employee Benefit expenses	362.529	321.299
		Other Expense	1289.206	1134.404
		Increase in inventories of finished goods and work in progress	(51.655)	(4.796)
		TOTAL	3232.971	2871.877	2682.360
Less	PROFIT BEFORE INTEREST, TAX, DEPRECIATION AND AMORTISATION		566.324	707.220	699.454
Less	FINANCIAL EXPENSES		187.343	129.778	135.924
	PROFIT BEFORE TAX, DEPRECIATION AND AMORTISATION		378.981	577.442	563.530
Less/ Add	DEPRECIATION/ AMORTISATION		133.680	123.637	118.506
Less	EXCEPTIONAL ITEMS		22.169	0.000	0.000
	PROFIT BEFORE TAX		223.132	453.805	445.024
Less	TAX		74.764	149.900	150.922
	PROFIT AFTER TAX		148.368	303.905	294.102
Add	PREVIOUS YEARS’ BALANCE BROUGHT FORWARD		540.192	363.623	183.250
Less	APPROPRIATIONS
		Transfer to General Reserve		30.390	29.410
		Interim Dividend		41.638	36.095
		Proposed Dividend	NA	41.638	36.095
		Corporate Dividend Tax		13.670	12.129
	BALANCE CARRIED TO THE B/S		NA	540.192	363.623
	EARNINGS IN FOREIGN CURRENCY
		Clay products	208.178	166.300	177.344
		Starch and allied products	34.444	2.568	0.290
		By Products	10.572	4.603	0.000
	TOTAL EARNINGS		253.194	173.471	177.634
	IMPORTS
		Raw Materials	16.043	20.176	193.672
		Stores & Spares	32.182	40.830	18.997
		Capital Goods	3.298	1.206	10.541
	TOTAL IMPORTS		51.523	62.212	223.210
	Earnings Per Share (Rs.)
	Basic		2.19	5.28	5.21
	Diluted		2.19	5.23	3.83

QUARTERLY RESULTS

PARTICULARS	30.06.2012 1^st Quarter
Net sales	1013.050
Total Expenditure	866.390
PBIDT (Excl OI)	146.660
Other Income	0.000
Operating Profit	146.660
Interest	46.590
Exceptional terms	0.000
PBDT	100.070
Depreciation	37.150
PROFIT BEFORE TAX	62.920
Tax	27.820
Provision and contingencies	0.000
Profit After Tax	35.100
Extra ordinary items	0.000
Prior Period Expense	0.000
Net Adjustments	0.000
Net Profit	35.100

KEY RATIOS

PARTICULARS		31.03.2012	31.03.2011	31.03.2010
PAT / Total Income	(%)	3.91	8.49	8.70
Net Profit Margin (PBT/Sales)	(%)	5.90	12.74	13.23
Return on Total Assets (PBT/Total Assets}	(%)	6.12	14.56	15.60
Return on Investment (ROI) (PBT/Networth)		0.14	0.31	0.36
Debt Equity Ratio (Total Liability/Networth)		1.27	1.22	1.26
Current Ratio (Current Asset/Current Liability)		1.39	1.10	1.80

LOCAL AGENCY FURTHER INFORMATION

Check List by Info Agents	Available in Report [Yes/No]
Year of Establishment	Yes
Locality of the Firm	Yes
Constitution of the firm	Yes
Premises details	No
Type of Business	Yes
Line of Business	Yes
Promoters background	No
No. of Employees	No
Name of Person Contacted	No
Designation of contact person	No
Turnover of firm for last three years	Yes
Profitability for last three years	Yes
Reasons for variation <> 20%	-
Estimation for coming financial year	No
Capital the business	Yes
Details of sister concerns	Yes
Major Suppliers	No
Major Customers	No
Payment Terms	No
Export / Import Details [If Applicable]	No
Market Information	-
Litigations that the firm / promoter involved in	-
Banking Details	Yes
Banking Facility Details	Yes
Conduct of the banking account	-
Buyer visit details	-
Financials, if provided	Yes
Incorporation details, if applicable	Yes
Last accounts filed at ROC	Yes
Major Shareholders, if applicable	Yes
Date of Birth of Proprietor/Partner/Director, if available	Yes
PAN of Proprietor/Partner/Director, if available	No
Voter ID No of Proprietor/Partner/Director, if available	No
External Agency Rating, if available	Yes

BACKGROUND AND NATURE OF OPERATIONS

English Indian Clays Limited, a Company incorporated in India in 1963, under the Companies Act 1956, was part of the erstwhile Thapar Group. The Company is engaged in the business of mining of clay (kaolin) and manufacturing of processed clay, starch and allied products.

OPERATIONS

During the year the operations of the Company were adversely impacted due to slow down in the manufacturing sector. The Company registered a marginal sales growth of 6% with a turn over of Rs. 3780.000 Millions as against Rs.3560.000 Millions in the previous year. However, higher cost of raw material particularly maize, and increased cost of fuel and chemicals in both business segments, impacted the overall profits of the Company as the increased cost of inputs and raw material could not be passed on fully to the customers. The profit from operations (PBDIT) has decreased from Rs.707.200 Millions to Rs. 566.300 Millions. In addition, the significant increase in interest costs by Rs. 580.000 Millions further reduced the PAT to Rs.148.300 Millions from Rs. 303.900 Millions in the previous year.

NEW PLANTS

Specialty Starch Plant at Shimoga

The Specialty Starch plant being established at Shimoga with a capital outlay of Rs. 450.000 Millions commenced its commercial production w.e.f. 27-06-2011. In this process, the small unviable unit at Puducherry was shut down and its assets were relocated to Yamunanagar and Shimoga.

CLAY PROJECT AT BHUJ

As reported earlier that the Company was exploring possibility of establishing a clay manufacturing unit at Bhuj, Gujarat, the Company has bought 10.50 Hectares land at Bhuj and is in the process of getting various approvals required for the project.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

COMPETITIVE AND EXTERNAL ENVIRONMENT

The growth in manufacturing slowed down significantly to 3.7% from 8.7% last year. The industry segments of concern to EICL that are impacted adversely, were Paper and Board (throughout the year) and Paint (during peak season in Q3). In addition, the recession in 2. Textile Industry continued. Superimposed on the above was the inception of the down turn in the Starch commodity cycle from August 2011 onwards, the significant increase in fuel prices, and imposition of anti dumping duty on some of the major imported chemicals.

The macro economic environment is not very healthy. The company is impacted in the short-medium term by higher interest rate and increasing cost of fuel and chemicals. On the positive side, exports are becoming increasingly more viable, and the company is focusing sharply on leveraging this opportunity.

There is an increasing competition in Calcined Clay Business segment from a few smaller companies that have commenced commercial production in Gujarat. The company has responded by setting up warehouses in strategic locations to offset the long delivery cycle in Kerala. The Company has also acquired land in Bhuj for setting up a manufacturing facility.

There is increasing competition in the modified starch business segment from domestic players who have, like us, migrated up the value chain. The Company is responding by increased effort in developing of import substitution products and applications; also in development of export markets in Asia and Africa. It is expected that the high oil prices will drive some switch back to Starch from the petroleum based substitutes.

A number of multinational majors have been actively looking at manufacturing opportunities in India. While in Clay Business the raw material integration is creating an entry barrier, in Starch Business there are reports of MandA activity in process

The Company is tracking these developments carefully and is taking appropriate measures to protect its market positioning. The commissioning of the modern facility at Shimoga (Karnataka) is a step in this direction.

OVERALL PERFORMANCE

Net Sales Turnover increased to Rs.3780.000 Millions showing growth of 6% over the previous year. EBIDTA and PAT declined by 20% and 50% to Rs. 570.000 Millions and Rs.150.000 Millions respectively, mainly due to the adverse business environment.

The Greenfield Specialty Starch plant was commissioned during the year at Shimoga, Karnataka at expense of approx. Rs. 450.000 Millions The smaller unviable Unit at Pondicherry was shut down and assets relocated to Yamuna Nagar and to Shimoga. This would result in a more competitive fixed cost base. The settlement expenses relating to employees have been provided in the P and L statement.

Various modernization projects were undertaken at total expense of approx. Rs. 100.000 Millions at all the locations towards reduction in energy costs, other operating cost, and production of higher level of Value Added Products.

The land bank of Kaolin raw material at Kerala continued to be augmented. Total committed during the year was approx. Rs.80.000 Millions. In addition, various opportunities were also explored outside Kerala and outside India.

The Company's R and D Unit continued to play a key role in developing new products, and new applications; also in offering application support to the customers. The new products that were developed and commercialized included Delaminated Clays, high DS Starch, and One Shot Starch formulation for Textile sizing.

Direct export of Starch products was commenced during the year with notable success in the mid east region. It is expected that 2012-13 would be the year of growth in the export activity.

Segment wise Business Performance

Rs. In Millions

	2010-11			2011-12
	Starch	Clay	Total	Starch	Clay	Total
Net Sales	1658.100	1894.300	3552.400	1727.500	2053.300	3780.800
EBIDTA	165.600	551.900	717.500	82.000	491.900	573.900
EBIT	125.500	474.500	600.000	39.000	406.700	445.700

The Cash un –allcoable expense for the year were Rs.7.600 Millions

Clay

The Sales of the Clay Business were flat in volume terms and 8% higher in Sales realization due to higher price and richer product mix. Export volumes grow by about 10%.

The margins reduced substantially due to fuel and chemicals price increase, which could not be fully passed on. The R and M expenses were also higher than the earlier years due to the campaign to reduce downtime through predictive maintenance.

The commercialization of delaminated Clay products developed by in-house R and D augers well for future growth.

The plant at Kollam, acquired from Wolkem, has been found to be unviable due to various external and internal factors. It is intended to be closed down.

Starch

There was a marginal increase of 3% in net Sales, resulting from increase in Sales realization.

The margins reduced very significantly due to higher raw material and fuel cost which could not be passed on due to the depressed off-take from the paper and other industry segments; also due to the slow pace of product approval from the newly commissioned Shimoga plant, which incurred EBIDTA loss during the Financial Year.

The peaceful closure of Pondicherry plant was successfully completed during the year. There was however, some production loss during the process of plant relocation.

OUTLOOKFOR 2012-13

The macro economic environment has shown no sign of recovery and the market growth forecast has been scaled down to about 6-8% for Clays and 4-5% for modified Starches.

It is expected that there would be further currency devaluation leading to higher fuel and chemical prices.

Interest rates may reduce marginally during the course of the year.

The competitive environment is expected to remain at the present level with no significant capacity increase during the coming year, other than in Calcined Clay and in Paper Starches.

Considering the above factors, no significant capacity increase is being planned during the year. Focus will be on consolidation, improving the operating efficiency and capacity utilization.

Shimoga plant is expected to reach 80% capacity utilization by Q3, thereafter no longer incurring cash losses.

Overall, we expect to recover from the dip experienced during 2011-12, in both businesses.

Various areas of diversification and growth are under study and there are expected to take shape by H2 of 2012-13, for following year implementation.

CONTINGENT LIABILITY AND COMMITMENTS

(Rs. In Millions )

Particular	31.03.2012	31.03.2011
a)Outstanding bank guarantees and letter of credits	23.258	35.725
b)Bills and cheques discounted	155.142	92.438
c)Indemnity bond countersigned by the Company and given to bank with respect to release of interest on deposit received by group companies	24.985	24.985
d) Excise and Sales-tax matters
i) Demand received from Commissioner of Central Excise, Panchkula on account of misclassification of plain maize starch against which stay has been granted by CESTAT, New Delhi (including penalty of 31.747 Millions; (2010-11: 31.747 Millions) against which an amount of 0.507 Millions (2010-11: 0.507 Millions ) deposited under protest	63.495	63.495
ii) Haryana Local Area Development Tax levied by the State Government on the goods received from other state, pending before Supreme Court of India against which an amount Rs.3.3216 Million (2010-11: Rs.3.216 Millions) deposited under protest	3.216	3.216
iii)Entry tax levied by the Government of Kerala on Special Kerosene Oil (SKO), pending before Supreme Court of India against which an amount of Rs. 15.134 Million (2010-11: Rs. 15.134 Millions) deposited under protest	15.134	15.134
Income tax matters	15.422	40.275

UNAUDITED FINANCIAL RESULTS FOR THE QUARTER ENDED 30^th JUNE 2012

Rs.in Millions

Particulars	3 Months Ended
	30.06.2012
	Unaudited
a)Net Sales/ Income from Operations	1011.411
1. (b) Other Operating Income	1.634
Total Income From operations	1013.045
2. Expenditure
a. Cost of Raw Materials consumed	379.495
b. Purchases of stock in trade	11.056
c. Changes in inventories of finished goods , work in progress and stock in trade	(8.882)
d. Employee benefit expenses	107.141
e. Depreciation and amortisation expense	37.150
f. Other expenses
- Power and fuel	232.553
- Admin, selling, other manufacturing expenses	127.022
Total Expenditure	903.534
3. Profit from Operations before Other Income, Interest and Exceptional Items (1-2)	109.512
4. Other Income	-
5. Profit before Interest and Tax	109.512
6. Interest	46.594
7. Profit from Ordinary Activities before Tax and exceptional items	62.917
8. Exceptional items	-
9. Profit from Ordinary Activities before Tax but before exceptional items	62.917
10. Tax Expenses	27.817
11. Net profit/(loss) for the period	35.100
12. Paid-up Equity Share Capital (face value Rs.2 per share)	100.552
13. Reserves excluding revaluation reserve as per balance sheet of previous accounting year	3000.00
14. Earning Per Share
a. Basic and b. Diluted	0.51
15. Public shareholding
- No. of shares	11101410
- % of holding (to total shareholding)	22.08
Promoters And Promoter Group Shareholding a) Pledged/ Encumbered
-Number of Shares	-
-% of Shares (As a % of the total Shareholding of Promoter and Promoter Group)	-
-% of Shares (as a % of the total share capital of the Company)	-
b) Non Encumbered
- Number of Shares	39174603
-% of Shares (As a % of the total Shareholding of Promoter and Promoter Group)	100.00
-% of Shares (as a % of the total share capital of the Company)	77.92

INVESTOR COMPLAINTS	30.06.2012
Pending at the beginning of the quarter	Nil
Received during the quarter	Nil
Disposed if during the quarter	Nil
Remaining unresolved the end of the quarter	Nil

Segment Results for the quarter ended 30.06.2012

	30.06.2012
Segment Revenue
Net Sales/income from the Segment
a) Clay Products	567.666
b) Starch and Allied Products	445.384
	1013.05
Segment Results
Profit before tax and interest from each segment
a) Clay Products	120.331
b) Starch and Allied Products	(7.856)
	112.475
Less :
i) Interest (net)	46.594
ii) Un-allocated expenses (net)	2.963
iii) Exceptional items	-
iv) Tax expense	27.817
Net profit	35.100
Capital employed
a)Clay Products	1934.330
b)Starch Product	1351.379
c) Un-allocated	(216.754)
Total	3068.955

Notes :

The above results for the quarter ended 30th June, 2012 has been reviewed and recommended by the Audit Committee and approved by the Board of Directors at their respective meetings held on 26th July, 2012.

2. The above unaudited financial results have been reviewed by the Auditors of the Company.

3. The name of the Company has been changed from English Indian Clays Limited to EICL Limited w.e.f. 27th June, 2012.

4. Figures for the previous quarter / year have been regrouped and rearranged to conform to the current quarter / year classification.

FIXED ASSETS:

· Land and Site Development

· Factory and other

· Buildings

· Plant and Machinery

· Furniture and Fixtures

· Lease Hold Improvements

· Vehicles and Cycles

· Computer software

· License fees

WEB SITE DETAILS

Subject a Company incorporated in India, was part of the erstwhile Thapar Group.   The Company was incorporated in 1963 in technical and financial collaboration with English China Clays Limited., U.K, the pioneer and the then world leader in Kaolin processing.   This collaboration with ECC ceased in the year 1992. 

EICL has two key Divisions, viz., Clay and Starch Divisions.  The Clay Division, having three manufacturing locations in Kerala, specialises in mining and processing of high end kaolins. 

The Starch Division has two manufacturing units, one located at Yamuna Nagar, Haryana, manufacturing Starch and its derivatives, and the other located at Shimoga exclusively specializing in the manufacture of value added Modified Starches for various Industrial applications. 

The Starch Division was started under the name of Bharat Starch Industries in the year 1937.  It was subsequently taken over by EICL Limited in the year 2002. 

Both the Divisions of EICL have grown to be market leaders in their respective fields.  This growth has been chiefly driven by prudent investment in world class R and D facilities for research in Kaolins and Starches, enabling these Businesses to be specialized solution providers for various applications spanning diverse Industries

Their Values

· To develop a professional, knowledge based, system driven work culture.

· Respect for ethical integrity, environmental protection, and safety.

· Believe in people and system driven performance.

· “Thinking Organization” with pro-active action.

· Team performance is more important than individual performance.

· Customer satisfaction.

· Quality and Cost conscious.

DIRECTORS

Mr. Karan Thapar, Chairman

Mr. Karan Thapar, Chairman of the Company, is a Chartered Accountant and belongs to the Promoter family.   He joined the Board of the Company in 1990.  He has work experience of over 24 years in different companies.

Mr. Rahul Gupta, Executive Director

Mr. Rahul Gupta is a Chemical Engineer from IIT, Delhi and and thereafter he did his MS from McGill University, Montreal.  He had about 35 years of experience in diverse industries, including Engineering, Chemicals, Polymers, Metals, Textile, Telecom.  His previous assignment was with Usha Martin Limited, as the CEO/ Director of their Telecom Cable and Construction subsidiaries.

Mr. Praveen Sachdev

Mr. Praveen Sachdev aged 65 years, a B.Sc. Mechanical Engineer, retired as the Managing Director from Greaves Cotton Limited. and holds expertise of over 45 years in diverse fields such as manufacturing, marketing and administration. He has been appointed as Director (Independent) w.e.f 28th January, 2011.

Mr. Jainender Kumar Jain

Mr. J. K. Jain is a Chartered Accountant. He retired from Gas Authority of India Limited. (GAIL) as Director (Finance) and was appointed as an Independent Director of the Company w.e.f 14th April, 2009. 

Mr. Vijay Rai

Mr. Vijay Rai is B.Tech in Mechanical Engineering from IIT, Kharagpur. He has rich experience of over 38 years in different industries, including Industrial Chemicals, Pharmaceuticals and Engineering. He was the Vice President of Bombay Chamber of Commerce and Industry and has been member of several industry associations.

Mr. T. Balakrishnan

Mr. T Balakrishnan is an IAS Officer, retired from Government of Kerala as Additional Chief Secretary and holds a rich experience of 32 years. At present, he is also the Managing Director of M/s INKEL Limited. He has been appointed as Director (Independent) w.e.f. 01.05.2012.

MILESTONES

1963 EICL incorporated on 18.11.1963.

1964 Commerical manufacturing started for Hydrous Clay at Veli, Kerala.

1992 Stake of English China Clays Limited UK (now merged with IMERYS PTE Limited-France) in EICL bought by Thapars.

1993 Mr Karan Thapar appointed as Chairman cum Managing Director of the Company (CMD).

1994 Shares of EICL listed on the Bombay Stock Exchange

1994 EICL commissions a Speciality Starch Plant at Puducherry.

2002 Merger of Bharat Starch with EICL.

2003 Capacity expansion in calcined clay at a greenfield location (Thonnakkal, Kerala) by commissioning of a RandD project for the manufacture of 25000 MTA of Calcined clay.

2005 Capacity expansion in Hydrous Clay at Thonnakkal, Kerala.

2007 EICL acquires clay reserves and manufacturing assets of Wolkem Clays Private Limited at Kollam (Kerala).  This becomes the third manufacturing location for Clay Business.

2008 2 MW Co-gen plant commissioned at Yamunanagar to reduce the cost of steam and power significantly.

2008 De-merger of the Investment Division of EICL to Bharat Starch Products Limited

2008 Capacity expansion in Calcined clay at Thonnakkal, Kerala.

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 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.55.54
UK Pound	1	Rs.88.23
Euro	1	Rs.70.01

INFORMATION DETAILS

Report Prepared by :

BYI

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	6
--PROFITABILIRY	1~10	6
--LIQUIDITY	1~10	6
--LEVERAGE	1~10	6
--RESERVES	1~10	6
--CREDIT LINES	1~10	6
--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		54

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.