D&B – Company ReseaRCh RepoRt...D&B – Company Research Report Ion Exchange (India) Limited 4 General Details BSE code 500214 BSE Id IonEx Listing group B Industry Industrial machinery

Ion ExchangE (IndIa) LImItEd

D&B – Company ReseaRCh RepoRt

September 2011

D&B – Company Research Report 1

Ion Exchange (India) Limited

ExEcutIvE Summary


Ion Exchange (India) Limited (herein referred to as “the company” or “Ion Exchange”) was incorporated on 6th march, 1964 in calcutta as a 60% subsidiary of “the Permutit company of united Kingdom”. the company became a 100% Indian owned company in 1985 after Permutit divested their holding.

the company is engaged in providing water and environment solutions and it’s operations are divided into three segments namely:

Engineering •

chemicals •

consumer products •

the company belongs to the Ion Exchange group. It has ten subsidiaries and is in a joint venture with Waterleau, Belgium.

the company caters to both domestic and international markets. the company`s plants, ion exchange resins and water treatment chemicals are exported to South East asia, Japan, Europe, africa, Egypt, the middle East, uSa and uK, as well as to the neighboring countries of Bangladesh, nepal, mauritius and Sri Lanka.

the company is listed on the Bombay Stock Exchange limited (BSE). It got listed on the BSE in 1977.

Business highlights

Increasing revenue trend except in Fy 2009

revenue of the company has shown an increasing trend during the period under study except in Fy 2009 when there was a 10.22% decline in sales and 86.44% decline in net profits due to impact of recession in the global markets.

the engineering segment was the major contributor to the growth in the revenue of the company in Fy 2010. the revenue from engineering contracts increased from Inr 2,630,845 thousand in Fy 2009 to Inr 3,273,705 thousand in Fy 2010.

Business overviewD&B D-U-n-s® number 65-007-7076

Line of BusinessIndustrial machinery Water management ( Engineering, chemicals and consumer products)

managementChairman - gS ranganathanmanaging Director - mr. rajesh Sharma

shareholding pattern (%)mar 10 Jun 11

promoter 40.09 40.83

Indian 40.09 40.83

Foreign - -

public 59.91 59.17

FIs/Banks/mFs 5.95 2.20

FIIs 0.26 -

others 53.70 56.97

Custodians -

total 100 100

Financials (InR in Crore)year Fy2010 Fy2009no of months 12 12revenue 500.27 426.99net Profit after tax 6.61 1.44net Worth 134.50 128.62Ratios (%)EBItda margin 5.03 4.53nPm 1.32 0.34roE 4.92 1.12EPS (in Inr)* 5.20 1.13

Quarterly Results (InR in Crore)

Quarter Q1 Fy2012

Q1 Fy2011

Q4** Fy2011

number of months 3 3 3

revenue 132.73 114.86 -net Profit after tax 3.25 2.21 -

EPS (in Inr)* 2.41 1.70 -*Source: BSE website**Quarterly results for Q4FY2011 was not available on BSE website

*Source: BSE website

D&B – Company Research Report


2

Desalination plant for Chennai petroleum Corporation Limited (CpCL)

a desalination plant was designed, engineered, supplied and commissioned by Ion Exchange on lump sum turnkey basis for chennai Petroleum corporation Limited (cPcL). the plant is the largest reverse osmosis based sea water desalination plant in the industrial sector in India.

Key challenges

Volatility in prices of local raw materials for the Company

cost of raw materials and finished goods consumed form a major part around 70.62% in Fy 2010 of the sales of the company thus indicative of vulnerability of the profit margins to changes in raw material prices. there is a huge volatility in the prices of local raw materials like steel, cement, and petroleum products in the year 2008-09. Presently, the prices have not shown huge volatility but the prices are not entirely stable, thus affecting the cost of raw materials and thereby increasing the cost of production.

exports in north america and europe adversely affected

the economic slowdown in the united States of america and European markets adversely affected the earnings from exports from these markets. due to this reason, the company plans to consolidate its operations in these markets.

Competition in the domestic water purifier business

the domestic water purifier business attracted a lot of new entrants resulting in intense competition in this segment. this might have an impact on the market share and profit margins of the company in this segment.

Fluctuations in foreign exchange rate

Fluctuations in foreign exchange rate is also one of the risks that could impact export earnings as well as raw material imports. the company has incurred foreign exchange losses to the extent of Inr 28,844 (in thousands) in Fy 2010. the company states that it has a conservative forex management policy and does not speculate in the forex market.



3

Low profit margins and low returns on funds invested

operating profit margin and net profit margin of the company showed a declining trend and were low at 2.90 % and 1.32 % respectively for Fy 2010. this indicates that the company needs to improve its margin by increasing its revenue and controlling cost.

return on tangible networth as well as return on capital employed of the company has shown an uneven trend during the period under study. return on networth declined from 8.39 % in Fy 2008 to 4.92 % in Fy 2010 and return on capital employed declined from 10.20 % in Fy 2008 to 8.59 % in Fy 2010. this indicates need to improve returns on funds invested.

high payable and receivable days with low liquidity

the account payable days of the company was quite high and stood at 923 days in Fy 2010. collection period of the company was also high at 175 days in Fy 2010. this indicates that the company is not able to collect its receivables on time, thus increasing the risk of bad debts. the company has written off bad debts amounting to Inr 42,871 thousand during Fy 2010.



4

General DetailsBSE code 500214

BSE Id IonEx

Listing group B

Industry Industrial machinery

market statistics as on 30th september, 2011Face value (Inr) 10

current market price 125.50

market cap (Inr crore) 169

Free Float m cap (Inr crore) 101

2W avg volume (Lakh) 0.26

circuit Filter aa: applicable, na: not applicable, w: WeekSource: BSE website

stock Returns (%) 1m* 6m* 1 yr*

Ion exchange (5.18) (6.73) (43.62)

Sensex (1.34) (14.70) (18.01)* m: represents duration in months, yr: represents year

Source: BSE websiteNote: Both Ion Exchange Limited and BSE Sensex values are indexed to 100 as on 30th September 2010

capital market overview

Ion Exchange Limited is listed on the Bombay Stock Exchange Limited (as part of group B shares).

shareholding Detail

the company has a total paid up capital of Inr 13.51 crores with 13,511,811 outstanding shares as on 30th June 2011. the Indian promoters hold 40.83 % stake in the company as on 30th June 2011.

stock market performance

the company’s total market capitalization stood at Inr 169 crore and the free float market capitalization at Inr 101 crore as on 30th September 2011. during the last one year, the stock decreased by 43.62% as against 18.01% decline in the benchmark BSE Sensex.



ExEcutIvE SummaryIndian water treatment industry has can be broadly classified into •household, industrial and utilities segment.

Water & wastewater treatment industry in India is estimated to •have grown at a cagr of ~15.2% over the period Fy 2006-10 to reach ~Inr 216 Bn in Fy 2010.

the industry is expected to grow at a cagr of ~16.9% over the •period Fy 2010-13 to have a market size of about Inr 345 Bn by Fy 2013.

Entry of new players sensing vast opportunity in the sector is •resulting in increasing competition, due to which a price war is expected which may pressurize margins of the sector.

InduStry ProFILEWater treatment is a process used to make water more acceptable •for a desired end-use. It can be further bifurcated into waste water treatment and water purification.

Waste water treatment is a process that removes majority of the •contaminants from waste water or sewage to produce a liquid suitable for disposal to the natural environment.

Water purification is the removal of contaminants from untreated •water to produce drinking water.

Water treatment industry caters to household, industrial as well •as utilities segments. household segment consists of purifiers while industrial and utilities involve water as well as waste water treatment.

municipal water & waste water treatment is the largest segment •followed by industrial water & waste water treatment.

household sector is fast growing segment due to increasing •awareness about benefits of clean drinking water.

different modes used in water treatment include dosing systems, •sand filters, carbon filters, softners, micron filter, reverse osmosis, ultraviolet sterliser and ozonator, etc.

InduStry ovErvIEW

the industry is expected to

grow at a CaGR of ~16.9%

over the period Fy 2010-13.

municipal water & waste

water treatment is the

largest segment in the

industry.



6

govErnmEnt rEguLatIonS the government of India has granted ‘infrastructure’ status to the •water treatment projects making them eligible for concessional bank finance as well as tax holiday of 10 years.

the government’s decision to allow 100% FdI in water treatment •industry also paved way for entry of the technically advanced global majors in India.

the government’s ambitious project to urban place - Jawaharlal •nehru national urban renewal mission (Jnnurm) - has been a great source for the water treatment industry. till march 2010, the mission has approved projects worth Inr 330 Bn (more than uSd 7 Bn) in the water supply and sewage treatment sector.

the government has also earmarked Inr 200 Bn under the •scheme- urban Infrastructure development for Small Scale and medium towns, for water supply and management projects in small towns.

dEmand SuPPLy dynamIcS

Demand Growth

Water & Waste water treatment Industry in India is estimated to •have grown at a cagr of ~15.2% over the period Fy 2006-10, to reach ~Inr 216 Bn in Fy 2010.

Lack of waste water treatment facilities, increased government •funding for water supply and treatment projects as well as demand from the industrial sector have contributed for the industry’s growth.

Increasing spread of water borne disease as well as health •consciousness has led to the rapid growth of the domestic purifier industry.

Demand Drivers

Increase in water usage across various segments augurs well for the •water treatment industry. Increasing demand from the industrial sector also augurs well for the sewage treatment industry.

most of the cities in India lack proper sewage treatment facilities. •Increased funding from the government to tackle sewage treatment problems in cities further bolsters the industry’s growth prospectus.

the Government of India

has granted ‘infrastructure’

status to the water treatment

projects making them

eligible for concessional

bank finance as well as tax

holiday of 10 years.

Lack of waste water

treatment facilities,

increased Government

funding for water supply and

treatment projects as well as

demand from the industrial

sector have contributed for

the industry’s growth.



7

many coastal areas in the India lack adequate drinking water •supply. In these areas desalination of sea water is emerging as a new option to provide drinking water. In January 2010, the water scarcity of chennai awarded Inr 11 Bn contract for construction of desalination plant. growing demand for such plants augurs well for the water treatment industry.

growing concerns of industrial waste has led to stricter pollution •as well as effluent norms. hence increasing numbers of industries are installing waste water treatment plants in their premises.

Emergence of township concept in metro as well as tier-I cities •is creating demand for water treatment industry as many of them plan to utilize their waste water and/or focus on rainwater harvesting.

Increasing health awareness as well as income levels is leading to •the growth of water purifier industry.

Future outlook

Water & Waste Water treatment industry in India is estimated to •grow at a cagr of ~16.9% over the period Fy 2010-13, to reach ~Inr 345 Bn in Fy 2013 from ~Inr 216 Bn registered in Fy 2010.

government initiatives as well as industrial demand are expected •to be major drivers for the growth of the industry over this period.

Increasing health awareness among people is expected to provide •momentum for the domestic purifier segment.

as the government projects (municipal segment) are key driver for •the industry, any reduction or slowdown on government spending can affect the industry’s growth.




Ion Exchange (India) Limited (herein referred to as “the company” or “Ion Exchange”) was incorporated on 6th march, 1964 in calcutta as a 60% subsidiary of “the Permutit company of united Kingdom”. the company became a 100% Indian owned company in 1985 after Permutit divested their holding.

the company is engaged in providing water and environment solutions and it’s operations are divided into three segments namely:

Engineering •

chemicals •

consumer products •

the company belongs to the Ion Exchange group. It has ten subsidiaries and is in a joint venture with Waterleau, Belgium.

the company caters to both domestic and international markets. the company`s plants, ion exchange resins and water treatment chemicals are exported to South East asia, Japan, Europe, africa, Egypt, the middle East, uSa and uK, as well as to the neighboring countries of Bangladesh, nepal, mauritius and Sri Lanka.

the company is listed on the Bombay Stock Exchange limited (BSE). It got listed on the BSE in 1977.

the company also undertakes research and development in specific areas along with efforts towards technology absorption, adaptation and innovation.

the company`s plants, ion exchange resins and water treatment chemicals are exported to South East asia, Japan, Europe, africa, Egypt, the middle East, uSa and uK, as well as to the neighboring countries of Bangladesh, nepal, mauritius and Sri Lanka.

all operating units of the company are International organization for Standardization (ISo) 9001:2000 certified and the resin and chemical division are ISo 14001 certified.

BuSInESS ovErvIEWBusiness overviewLine of BusinessIndustrial machinery – Water management ( Engineering, chemicals and consumer products)

products manufacturedEngineering, chemicals and consumer products

Contact DetailsRegistered address Ion house, dr. E moses road Post Box 6273, mahalaxmi,mumbai 400 011

Website www.ionindia.com

email [email protected]

telephone: 022-4939520/23/25/31/32Fax: 022-24938737

Company DetailsCompany secretary mr. milind Puranik

auditors m/s. S. r. Batliboi & co.

BankersBank of Indiacanara BankState Bank of IndiaaxIS Bank Ltd.Punjab national BankExport-Import Bank of IndiaIndian overseas Bank



9

operational overview

the Business of the company operates in three segments:

Engineering •

chemicals •

consumer Products •

In the engineering segment, the company designs, manufactures and sells medium and large size equipments for water and waste water treatment plants. the engineering segment has three sub segments namely turnkey projects, standard systems and membranes. the following table shows the products manufactured in each sub segment.

sub segment products

turnkey projects clarifiers, filters, demineralization units, desalination units, condensate polishers

Standard systems and membranes Standard systems and membranes

the chemical segment is divided into two sub segments namely resins and chemicals. the following table shows the products manufactured in each sub segment.

sub segment products

resins cationic resins, anionic resins, catalyst

chemicals chemicals to treat boiler/cooling water, chemicals used in manufacturing paper/sugar/ceramics, enzymes

the consumer products can be further divided into home and rural. the table shows the products manufactured and services provided for each sub segment.

sub segment products/services

home Packaged water ,water station, on tap purifier

rural disinfection units, hard and blackish water treatment, fluoride, iron, nitrate, arsenic removal, sewage treatment and recycle.

the company is the first ion exchange resin manufacturing company in India to have a Food and drug administration (Fda) approved facility for the manufacture of pharmaceutical grade specialty resins. the resin unit is also ISo 14001 certified. the chemical division is the first in the water treatment sector in India to be ISo 14001 certified.



10

corporate Structure

Ion Exchange (India) Limited belongs to the Ion Exchange group.

Ion exchange has ten subsidiary companies. the company has set up subsidiaries in united States of america, oman, India and other asian countries to strengthen its position and expand in the domestic as well as international markets.

the following are the subsidiary companies and their lines of business.

Company Line of business

aqua Investments (India) Limited Water management

Watercare Investments (India) Limited Water management

Ion Exchange Enviro Farms Limited (IEEFL)

Production and marketing of internationally certified organic produce

Ion Exchange Infrastructure Limited Provides integrated solutions for water treatment

Ion Exchange asia Pacific (thailand) Limited, thailand Water management

IEI Environmental management [m] Sdn. Bhd., malaysia

Water treatment systems, projects, service, consultancy etc.

Ion Exchange Environment management (Bd) Limited, Bangladesh Water management

Ion Exchange LLc, uSa Water managementIon Exchange & company LLc, oman Water managementIon Exchange asia Pacific Pte Ltd., Singapore Water management

Ion Exchange Waterleau Limited is a joint venture of Ion Exchange (India) Limited and the Waterleau group, Belgium .It offers a complete portfolio of advanced environmental solutions and services for industrial, infrastructure and municipal applications.

Ion Exchange India also has associations with some specialist water treatment companies in the world through which they have acquired competent technologies.

Licensing agreement with Country acquired technology

Butler manufacturing Services (BmS) Ireland Packaged Sewage treatment Plant

Eutech Instruments Singapore Water Quality monitoring Instruments

nordic Water Products Sweden continuous Sand Filters

Elf antar Sa France oil Separators/ coalescers and drum Skimmers

Note: The number of subsidiaries is 10 as per FY 2010 financials. However, in FY 2011 a new subsidiary Ion Exchange WTS (Bangladesh) Limited was formed in Bangladesh with an objective of trading in water treatment plants and equipments.



11

revenue composition

the company is engaged in engineering, chemicals and consumer products. the revenue of the company has depicted an uneven trend during the period under the study.

revenue of the company has shown an increasing trend except during Fy 2009 when there was a 10.22% decline in sales due to impact of recession in the global markets.

Engineering contracts and consumer products have been the major contributors to the revenue growth during the period under study. revenue from engineering contracts and consumer products grew by 24.44% and 3.91% respectively in Fy 2010.

In Fy 2009, revenue declined by 10.22% majorly due to impact of recession in the global markets. revenue from engineering contracts declined by 15.09% from Inr 3,098,504 thousand in Fy 2008 to Inr 2,630,845 thousand in Fy 2009.

revenue from engineering contracts constituted a major portion of total revenue generated by the company during the period under study. revenue from engineering contracts constituted 62.55% of revenue in Fy 2010 while revenue from chemicals constituted 23.06% of revenue in Fy 2010.



12

geographic Spread

domestic market has remained the major market for the company for the period under study with major share of revenue being generated out of domestic sales.

In Fy 2010, the domestic market contributed 85.07% to the total revenue. as informed by the management, the company intends to further increase its revenue share from export market on account of growing demand so as to strengthen its position in the international market.

major growth drivers

Future growth in water treatment industry

Lack of waste water treatment facilities, increased government funding for water supply and treatment projects, stricter pollution norms, increasing spread of water borne diseases, increasing health and environmental awareness as well as high demand from the industrial sector are going to be major drivers in the industry’s growth.

Increased investment in infrastructure projects and power plants

Increased investment and greater focus on infrastructure projects and power plants will result in a higher growth of the engineering segment, the major revenue contributing segment of the company. the proposed contracts in engineering are expected to bring about an increase in the margins of the company.

new product developments to fuel growth

the launch of new products in mining and refinery process treatment as well as new applications developed for specialty resins are likely to give significant growth in the chemical division in the coming years.

expansion through subsidiaries

the company has been expanding its presence in the domestic as well as international markets by setting up subsidiaries in various states in India as well as other growing markets around the world thereby indicating good future growth potential for the company.



13

Key challenges

Volatility in prices of local raw materials for the Company

cost of raw materials and finished goods consumed form a major part (around 70.62% in Fy 2010) of the sales of the company thereby indicating vulnerability of the profit margins to changes in raw material prices. there is a huge volatility in the prices of local raw materials like steel, cement, and petroleum products in the year 2008-09. Presently, the prices have not shown huge volatility but the prices are not entirely stable, thus affecting the cost of raw materials and thereby increasing the cost of production.

exports in north america and europe adversely affected

the economic slowdown in the united States of america and European markets adversely affected the earnings from exports from these markets. due to this reason, the company plans to consolidate its operations in these markets.

Competition in the domestic water purifier business

the domestic water purifier business attracted a lot of new entrants resulting in intense competition in this segment. this might have an impact on the market share and profit margins of the company in this segment.

Fluctuations in foreign exchange rate

Fluctuations in foreign exchange rate is also one of the risks that could impact export earnings as well as raw material imports. the company has incurred foreign exchange losses to the extent of Inr 28,844 (in thousands) in Fy 2010. the company states having a conservative forex management policy and does not speculate in the forex market.

Low profit margins and low returns on funds invested

operating profit margin and net profit margin of the company showed a declining trend and were low at 2.90 % and 1.32 % respectively for Fy 2010. this indicates that the company needs to improve its margin by increasing its revenue and controlling cost.

return on tangible networth as well as return on capital employed of the company has shown an uneven trend during the period under study. return on networth declined from 8.39 % in Fy 2008 to 4.92 % in Fy 2010 and return on capital employed declined from 10.20 % in Fy 2008 to 8.59 % in Fy 2010. this indicates need to improve returns on funds invested.



14

high payable and receivable days with low liquidity

the account payable days of the company was quite high and stood at 923 days in Fy 2010. collection period of the company was also high at 175 days in Fy 2010. this indicates that the company is not able to collect its receivables on time, thus increasing the risk of bad debts. the company has written off bad debts amounting to Inr 42,871 thousand during Fy 2010.

Profitability

gross Profit of the company has shown an increasing trend during the period under study. the gross profit increased in Fy 2009 in spite of a 10% decline in sales indicating better control over manufacturing cost.

operating Profit and net Profit have shown an uneven trend during the period under study with a significant decline in the profits in Fy 2009 due to a decline in sales coupled with an increase in general and administration expenses.

gross Profit margin, operating Profit margin and net Profit margin have shown an uneven trend during the period under study.

gross Profit margin showed an uneven trend for the period understudy. It improved and stood at 16.66 in Fy 2010 due to a better control over raw material and manufacturing cost.

operating Profit margin and net Profit margin also witnessed and uneven trend and stood at 2.90% and 1.32%.



15

revenue distribution

cost of materials and goods forms the major cost for the company. there has been a decline in the contribution of cost of materials and goods to total cost from 72.75% in Fy 2008 to 69.95% in Fy 2010. however, there has been a significant increase in the contribution of general and administration cost to the total cost from 5.36% in Fy 2008 to 10.10% in Fy 2010.

the total operating cost and other main costs of Ion Exchange as a percentage of revenue are given below.



PEEr comParISonLine of Business: companies engaged in Water treatment Industry

no. of companies: 24

networth range: Less than Inr 3150 crore

In Fy 2010, the company performed relatively well on profit growth in comparison to its peers.

however, it underperformed relative to its peers on parameters like collection days, total debt equity ratio, return on return on networth, return on capital employed, return on revenue, return on fixed assets and current ratio.

peer Group Comparison based on Fy 2010

particulars min Value

25th percentile

40th percentile

60th percentile

75th percentile

max Value

Ion exchange

revenue (Inr crore) 0.26 7.78 28.15 116.67 247.68 3,142.17 500.27

Profit after tax (Inr crore) (2.25) 0.38 0.91 4.95 8.28 141.44 6.61

revenue growth (%) (42.49) (1.06) 10.35 22.09 29.43 311.61 17.16

Profit growth (%) (233.33) - 0.25 26.28 86.64 2,860.00 358.00

current ratio (times) 0.73 1.17 1.30 1.61 2.10 20.82 1.17

Quick ratio (times) 0.33 0.71 0.92 1.09 1.30 17.74 1.02

collection Period (days) 39 79 88 120 174 505 175

total debt Equity ratio (times) - 0.02 0.09 0.32 0.88 7.01 0.67

return on revenue (%) (66.96) 1.31 4.16 5.78 6.47 15.96 1.32

return on Fixed assets (%) (142.86) 0.98 11.73 25.15 60.79 687.50 11.24

return on networth (%) (66.18) 0.78 6.61 13.38 21.39 71.43 4.92

return on capital Employed (%) (99.12) 8.81 11.20 21.21 29.39 103.90 8.59 Source: CMIE



FInancIaL StatEmEntS -Ion ExchangE (IndIa) Ltdprofit & Loss account

For the period ended mar-06 mar-07 mar-08 mar-09 mar-10

number of months 12 12 12 12 12

Income / Revenue / sales 2,942,048 4,087,634 4,755,806 4,269,906 5,002,738

Less: Direct expenditure (2,470,048) (3,515,471) (4,161,953) (3,647,446) (4,169,300)

cost of materials and Finished goods consumed (1,981,198) (2,979,620) (3,506,750) (2,987,677) (3,533,094)

Electricity / Power and Fuel and Water Expenses (33,819) (37,906) (44,324) (58,977) (56,843)

Salaries and Wages (245,753) (292,564) (354,179) (374,342) (424,598)

other direct Expenditure (209,278) (205,381) (256,700) (226,450) (154,765)

Gross profit / (Loss) 472,000 572,163 593,853 622,460 833,438

add: other operating Income - - - - -

Less General and administration expenses (188,164) (204,814) (217,653) (338,825) (375,344)

Less: selling and Distribution expenses (75,921) (108,427) (105,220) (125,697) (97,431)

Less: Employee compensation under ESoP (1,902) (17,898) (11,525) (16,168) (13,162)

Less: Loss on Sale of Fixed assets - (933) (1,299) (1,093) -

Less: Loss on Foreign Exchange transactions - - - - (28,844)

Less: Bank and Finance charges (16,970) (15,775) (23,724) (22,847) (22,490)

Less: Bad debts written off - (28,473) (27,762) (18,983) (42,871)

Less: Provision for Bad debts (11,823) - - - -

Less: other Expenses written off (6,162) (2,206) - (318) (49,997)

Less: depreciation / amortization and depletion (42,279) (43,852) (44,859) (54,200) (58,236)

operating profit/(Loss) 128,779 149,785 161,811 44,329 145,063

add: other non operating Income 25,876 27,498 64,450 94,872 48,344

earnings Before Interest and tax (eBIt) 154,655 177,283 226,261 139,201 193,407

Less: Interest Expenditure (84,284) (73,980) (69,572) (101,838) (91,304)

profit before tax and extraordinary Items 70,371 103,303 156,689 37,363 102,103

Less: total tax Provision (19,823) (43,450) (50,210) (22,926) (35,981)

profit after tax 50,548 59,853 106,479 14,437 66,122

Less: dividends (13,149) (21,206) (30,662) (14,928) (22,348)

transfer to reserves - (2,993) (8,000) - (3,400)

Plus: retained Earnings b/f 59,629 97,028 132,682 200,499 200,008

Retained earnings c/f 97,028 132,682 200,499 200,008 240,382

(Inr in thousand)



soURCes oF FUnDs 2006 2007 2008 2009 2010

shareholders Fund

Equity Share capital 114,102 119,910 126,569 126,925 127,259

Employee Stock option 4,522 16,885 15,162 30,683 43,214

capital reserve 2,668 2,668 2,668 2,668 2,668

general reserve 124,206 127,198 135,198 135,198 138,598

Specific reserve 1,600 1,600 1,600 1,600 1,600

contingency reserve 40,000 40,000 40,000 40,000 40,000

revaluation reserve 1,248 1,220 1,192 1,163 1,134

Securities Premium account 688,146 698,890 745,747 747,983 750,175

retained Earnings 97,028 132,682 200,499 200,008 240,382

total shareholders Fund 1,073,520 1,141,053 1,268,635 1,286,228 1,345,030

non-Current Liabilities

Long term Loans : Secured 45,319 41,863 81,913 51,547 21,181

Long term Loans : hire Purchase 862 355 10,979 7,861 4,584

deferred tax Liability 423 24,223 29,432 33,359 35,840

due to customers (Long term) 130,412 216,312 206,189 252,538 356,117

Public deposits (Long term) 25,131 44,077 57,335 61,282 66,696

other deposits (Long term) 83,445 84,670 47,448 19,885 32,654

other non current Liabilities 97 30 412 30 82

total non-Current Liabilities 285,689 411,530 433,708 426,502 517,154

totaL soURCes oF FUnDs 1,359,209 1,552,583 1,702,343 1,712,730 1,862,184

appLICatIon oF FUnDs 2006 2007 2008 2009 2010

Fixed assets

Property, Plant, machinery and Equipment 92,813 92,779 230,034 228,136 227,042

Land and Buildings 226,280 236,520 292,620 294,510 252,148

Leasehold Land 16,750 16,479 16,209 18,758 18,455

transportation vehicles 12,138 8,819 19,251 16,803 13,799

Furniture, Fixtures and Fitting 66,747 68,607 79,230 78,041 72,177

capital Work in Progress 9,925 70,588 14,062 5,663 4,820

total Fixed assets 424,653 493,792 651,406 641,911 588,441

Intangible assets 2,006 - - - -

total Investments 41,567 64,175 91,730 102,415 254,390

other assets 480,896 602,649 646,404 736,859 581,333

Current assets

cash and Bank 52,025 60,436 38,448 20,211 44,075

remittances in transit 1,095 475 - - -

margin deposit account 19,857 24,208 30,164 24,895 44,508

accounts receivable 1,326,520 1,833,218 1,985,829 2,129,553 2,395,544

Inventory 290,164 302,749 477,309 376,002 393,545

other Loans and advances 178 343 254 263 130

other current assets 123,167 85,700 70,687 90,448 68,280

total Current assets (a) 1,813,006 2,307,129 2,602,691 2,641,372 2,946,082

Current Liabilities and provisions

accounts Payable 682,054 1,341,022 1,423,840 1,457,345 1,804,911

Bank Loans 380,738 307,305 466,053 456,913 317,351

other current Liabilities 340,127 266,835 399,995 495,569 385,800

Less: Current Liabilities & provisions (B) (1,402,919) (1,915,162) (2,289,888) (2,409,827) (2,508,062)

net Current assets (a - B) 410,087 391,967 312,803 231,545 438,020

totaL appLICatIon oF FUnDs 1,359,209 1,552,583 1,702,343 1,712,730 1,862,184

(Inr in thousand)BaLancE ShEEt



KEy FInancIaL ratIoS

Key Financial Ratios 2006 2007 2008 2009 2010

GRoWth RatIos

revenue growth (%) - 38.94 16.35 (10.22) 17.16

net Profit growth (%) - 18.41 77.90 (86.44) 358.00

operating Profit growth (%) - 16.31 8.03 (72.60) 227.24

pRoFItaBILIty RatIos

gross Profit margin (%) 16.04 14.00 12.49 14.58 16.66

operating Profit margin (%) 4.38 3.66 3.40 1.04 2.90

return on revenue (%) 1.72 1.46 2.24 0.34 1.32

return on tangible networth (%) 4.72 5.25 8.39 1.12 4.92

return on average tangible networth (%) - 5.41 8.84 1.13 5.03

return on capital Employed (%) 8.50 9.34 10.20 5.96 8.59

return on average capital Employed (%) - 9.54 10.99 6.11 8.43

return on Fixed assets (%) 11.90 12.12 16.35 2.25 11.24

return on total assets (%) 1.83 1.73 2.67 0.35 1.51

LIQUIDIty RatIos

Quick ratio (times) 1.09 1.05 0.93 0.94 1.02

current ratio (times) 1.29 1.20 1.14 1.10 1.17

tURnoVeR RatIos

Inventory turnover ratio (times) 8.54 11.64 8.75 9.73 10.63

Fixed asset turnover ratio (times) 6.93 8.28 7.30 6.65 8.50

soLVenCy RatIos

Long term debt Equity ratio (times) 0.27 0.34 0.32 0.31 0.36

total debt Equity ratio (times) 0.70 0.66 0.75 0.82 0.67

total Liabilities to tangible networth (%) 157.59 203.91 214.69 220.52 224.92

Interest coverage ratio (times) 1.83 2.40 3.25 1.37 2.12

eFFICIenCy RatIos

Payment Period (days) 770 1,483 1,197 1,056 923

average Payment Period (days) - 1,127 1,129 1,046 841

collection Period (days) 165 164 152 182 175

average collection Period (days) - 141 147 176 165

WoRKInG CapItaL RatIos

current Liabilities to tangible networth (%) 130.93 167.84 180.50 187.36 186.47

Working capital turnover ratio (times) 7.17 10.43 15.20 18.44 11.42



these Standard terms & conditions (“t&cs”) apply to the user of this report (the “user”) provided by dun & Bradstreet Information Services India Private Limited (“d&B-India”). the information contained in this report comprising of, inter alia, all data, diagrams and representations contained therein are collectively referred to as “the Information”. the user is deemed to have agreed to these t&cs without any qualifications.

oWnErShIP

d&B-India is the sole owner and proprietor of all rights including copyrights, trademarks and all other intellectual property rights (“IP rights”) in the Information. all research, analysis, data and any other Information provided in any form, is also proprietary to d&B-India and is protected by Indian laws and applicable treaties and conventions governing intellectual property. the user shall not copy, reproduce, repackage, resell, display, publish, transmit, transfer, disseminate or otherwise redistribute the Information, in whole or in part, in any form or manner or by any means whatsoever without the express written permission of d&B-India. the user acknowledges that the Information is proprietary to d&B-India and comprises of: (a) works of original authorship, including compiled information containing selection, arrangement and expression of such information or pre-existing material that has been created, gathered or assembled by d&B-India; (b) confidential and trade secret information of d&B-India; and (c) information that has been created, developed and maintained by d&B-India at great expense of time and money such that misappropriation or unauthorized use by others for commercial gain would unfairly and irreparably harm the proprietary and intellectual property rights in the Information of d&B-India.

dIScLaImEr and LIaBILIty

d&B-India does not give any warranty whatsoever, including without limitation, as to the availability, accuracy, currency, completeness, correctness, or reliability of the Information made available and expressly disclaims (to the maximum extent permitted in law) all liability for any direct or indirect damage or loss resulting from the user’s use of, or reliance on the Information or the contents provided therein. Such Information, usually, may not be the outcome of an independent investigation prompted by each customer inquiry, but is updated and revised on a periodic basis. through these t&cs, the user acknowledges that every business decision, to some degree or the other, represents the assumption of risk and that d&B-India, in furnishing the Information does not and cannot underwrite or assume the user’s risk, in any manner whatsoever. the user, therefore, agrees that d&B-India shall not be liable to the user in any manner for any direct or indirect loss or injury arising out of or caused, in whole or in part, by d&B-India’s negligent or other acts or omissions in procuring, compiling, collecting, interpreting, reporting, communicating or delivering the Information or its contents, or in otherwise performing its obligations under these t&cs, whether or not any such matter amounts to a fundamental breach of these t&cs. Further, d&B-India shall not be liable, at any time, for special, incidental, exemplary or consequential

stanDaRD teRms & ConDItIons

damages (including, without limitation, damages for loss of business projects or loss of profits), even if advised of the possibility of such damages, arising in contract, tort or otherwise from the use of the Information or its contents, or from any acts or omissions arising as a result of use of the Information or for any failure of performance, error, omission, interruption, defect or delay in the activities undertaken by the user as a result of reliance on the contents of the Information. If notwithstanding the foregoing, liability can be lawfully imposed and enforced on d&B-India, then the user agrees that d&B-India’s aggregate liability for any and all losses or injuries to the user arising out of any negligent or other acts or omissions of d&B-India in connection with anything furnished as the Information, regardless of the cause of the loss or injury and regardless of the nature of the legal or equitable right claimed to have been violated, shall never exceed rs.3 lakh (rupees three Lakh) and the user covenants not to sue d&B-India for a greater amount. d&B-India provides no advice or endorsement of any kind through this report. the availability of data in this report does not constitute a recommendation by d&B-India to enter into any transaction or follow any course of action.

all decisions made by the user must be based solely on the user’s evaluation of the circumstances and objectives. d&B-India recommends that the user independently verify the current accuracy of any data made available in the Information upon which the user intends to rely.

IndEmnIty

the user agrees to hold harmless and indemnify d&B-India and its officers, agents, employees or partners, from and against any third party claim that is settled or compromised, including any liability or expense arising from all claims, losses, damages (actual and consequential), suits, judgements, litigation costs and attorneys’ fees of every kind and nature, arising from or in any way related to the user’s use of the Information or from any breach of these t&cs by the user, its employees and its agents.

tErmS oF uSE

the Information and all content provided therein shall be for the sole and exclusive use of the user. the user is prohibited to use the Information and its contents to engage in any unfair or deceptive practices. the user shall not use the Information in connection with providing advice or recommendations to others, it being understood that the Information is only for the user’s internal use. Except as otherwise agreed or required by law, neither d&B-India nor any of its trade names, trademarks, or service marks may be used for any purpose as the identification of the user’s source of reference. d&B-India shall not be required to divulge either its sources of or the procedures for obtaining the Information. In addition to the restrictions specified hereinabove, the user shall not use the Information for inducing the prospective investors to subscribe to the securities that may be offered by the evaluated entity in the capital market, since the Information reflects the overall performance of the evaluated entity and is not meant for mass consumption.

Submitted to BSE under the Sponsored research InitiativePublished on behalf of the Stock Exchange Investors’ Protection Fund

Bombay stock exchange Ltd. P J towers, dalal Street, mumbai. tel: 22721233/34 www.bseindia.com

D&B – Company ReseaRCh RepoRt...D&B – Company Research Report Ion Exchange (India) Limited 4 General Details BSE code 500214 BSE Id IonEx Listing group B Industry Industrial machinery

Documents