MIRA INFORM REPORT

Report Date :

10.04.2007

IDENTIFICATION DETAILS

Name :	RAMKRISHNA FORGINGS LIMITED
Registered Office :	6, Waterloo Street, 4^th Floor, Kolkata – 700069, West Bengal
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	12.11.1981
Com. Reg. No.:	21-34281
CIN No.: [Company Identification No.]	L74210WB1981PLC034281
TAN No.: [Tax Deduction & Collection Account No.]	CALR02277C
Legal Form :	Public Limited Liability Company. The Company’s shares are listed on Stock Exchanges.
Line of Business :	Manufacturer of Forged and Rolled Components for the Railways, Automobile, Defence, Mining and Bearing industry.

RATING & COMMENTS

MIRA’s Rating :

A

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 2400000
Status :	Satisfactory
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and reputed company having satisfactory track. Directors are reported as experienced and respectable businessmen. Trade relations are reported as fair. Business is active. Payments are usually correct and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered / Corporate Office :	6, Waterloo Street, 4^th Floor, Kolkata – 700069, West Bengal, India
Tel. No.:	91-33-22420018 / 22435613 / 22487164
Fax No.:	91-33-22420019
E-Mail :	info@ramkrishnaforgings.com nareshj@cal2.vsnl.net.in
Website :	http://www.ramkrishnaforgings.com
Head Office :	L&T Chambers, 16, Camac Street, 6^th Floor, Kolkata-700017, West Bengal, India
Tel. No.:	91-33-39840999/ 22420018/ 22435613/ 22436518/ 22487164
Fax No.:	91-33-39840998/ 22420019
E-Mail :	nareshji@cal2.vsnl.net.in
Factory :	Plot No. M – 6, Phase – VI, Gamaria, Jamshedpur – 832108, Jharkhand, India
Tel. No.:	91-657-2202810/ 2201721
Fax No.:	91-657-2220810
E-Mail :	forgings-division@ramkrishnaforgings.com
Factory 2 :	7/40, Duffer Street, Liluah, Howrah – 711204, West Bengal, India
Tel. No.:	91-33-26541349/ 26545729
Fax No.:	91-33-26545729
Factory 3 :	Plot No. M – 15, 16 & NS – 26, Phase – VII, Adityapur Industrial Area, Jamshedpur – 832109, Jharkhand
Branches :	91-657-5534146/ 3092900/ 3097779
Tel. No.:	cnc-division@ramakrishnaforgings.com

DIRECTORS

Name :	Mr. Mahabir Prasad Jalan
Designation :	Chairman
Name :	Mr. Naresh Jalan
Designation :	Managing Director
Name :	Mr. Pawan Kumar Kedia
Designation :	Whole Time Director
Name :	Mr. Sajjan Kumar Naredi
Designation :	Non Executive Director
Name :	Mr. Ramprasad Saraf
Designation :	Non Executive Director
Name :	Mr. Ram Awatar Agarwal
Designation :	Non Executive Director
Name :	Mr. Padam Kumar Khaitan
Designation :	Non Executive Director
Name :	Mr. Shailesh Ramanlal Parikh
Designation :	Non Executive Director
Name :	Mr. Satyanarain Agrawal
Designation :	Additional Director
Name :	Ms. Supriya Gupta
Designation :	Additional Director
Name :	Mr. Satish Kumar Mehta
Designation :	Additional Director
Name :	Mr. Saligram Nanjappa
Designation :	Additional Director
Name :	Mr. Manish Chaudhari
Designation :	Director [Resigned w.e.f. 27.07.2006]

KEY EXECUTIVES

Name :	Mr. Rajesh Mundhra
Designation :	Company Secretary

MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN

Names of Shareholders	No. of Shares	Percentage of Holding
Promoters and their associates	6465884	42.54
Mutual Funds	3680786	24.22
FII’s	597986	3.93
NRI’s / OCB	157398	1.04
Private Corporate Bodies	1608684	10.58
Indian Public	2598136	17.09
Clearing Members	90356	0.60
TOTAL	15199230	100.00

Shareholding Pattern as on 30.09.2006

Category	Total Shares	Percentage
Promoter and Promoter Group
Indian
Individual / HUF	6611589	43.49
Central Govt./State Govt.(S)	-	-
Bodies Corporate	-	-
Financial Institutions/Banks	-	-
Others	-	-
Sub-Total	6611589	43.49
Foreign
Individuals NRIs/Forign Individuals	-	-
Bodies Corporate	-	-
Others	-	-
Sub-Total A(2)	0	0.00
Total	6611589	43.49
Public Shareholding
Institutions
Mutual Fund/UTI	4215584	27.73
Financial Institutions/Banks	-	-
Central Govt./State Govt.(S)	-	-
Venture Capital Funds	-	-
Insurance Company	-	-
Foreign Institutional Investors	564013	3.71
Foreign Venture Capital Investors	-	-
Others	-	-
Sub Total	4779597	31.44
Non Institutions
Bodies Corporate	1406245	9.25
Individuals
Individuals holding nominal share capital upto Rs. 1 lakh	1760614	11.58
Individuals holding nominal share capital in excess of Rs.1 lakh	488799	3.21
Others
Non Resident Indians	116645	0.76
Clearing Members	35741	0.23
Sub Total	3808044	25.05
Total	8487641	56.50
Total	15199230	100.00
Shares held by Custodians, against which Depository Receipts have been issued	-	-
GRAND TOTAL	15199230	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of Forged and Rolled Components for the Railways, Automobile, Defence, Mining and Bearing industry.

Products :

Item Code No.	Product Description
7326 19 10	Carbon Steel / Non Alloy Forgings [Rough / Machined]
7302 40 00	Hot Rolled – Non Alloy Steel Plates
7326 19 10	Alloy Steel Forgings [Rough / Machined]

v AS Forged and Heat Treated Items

v Machined Items

Exports :

Countries :

USA, Mexico, Germany, Bangladesh, Japan, Sri Lanka and Brazil

PRODUCTION STATUS

Particulars	Unit	Actual Production
Forgings of Railway, Wagon & Coach Components, Automobiles Components and General Suppliers	M.T.	26900
Automobile Items	Pcs.	1264370
Railway Items	Pcs.	819781
Defense Items	Pcs.	40112
Other Items	Pcs.	47497
Export Items	Pcs.	244422

GENERAL INFORMATION

Customers :

v Tata Motors

v Automotive Axles Limited

v BEML

v Hindustan Motors

v Indian Railways

v Arvin Maritor

No. of Employees :

About 1000

Bankers :

State Bank of India, Jamshedpur

Facilities :

	As on 31.03.2006 [Rs. in Millions]
SECURED LOANS :
From Scheduled Bank :
Cash Credit & Export Credit facilities	248.462
Packing Credit	6.380
Term Loans :
Rupee Loan	126.501
Foreign Currency Loan	44.860
Premises Loan	19.297
Vehicle Loan	5.591

Unsecured Loans :

Loan from Bodies Corporate	6.690
Sales tax under Deferred Scheme	1.543
Total	8.233

Banking Relations :	Satisfactory
Auditors :
Name :	Singhi & Company Chartered Accountants
Address :	1B, Old Post Office Street, Kolkata – 700001, West Bengal, India
Associates :	Basuki Portfolio Private Limited

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
16000000	Equity Shares	Rs. 10/- each	Rs. 160.000 millions

Issued Capital :

No. of Shares	Type	Value	Amount
15328540	Equity Shares	Rs. 10/- each	Rs. 153.285 millions

Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
15199230	Equity Shares	Rs. 10/- each	Rs. 151.992 millions
Add :	Warrant Allotment Money		Rs. 1.499 millions
	TOTAL		Rs. 153.492 millions

FINANCIAL DATA

[all figures are in Rupees Millions]

ABRIDGED BALANCE SHEET

SOURCES OF FUNDS		31.03.2006	31.03.2005	31.03.2004
SHAREHOLDERS FUNDS
1] Share Capital		153.492	127.743	66.500
2] Share Application Money		0.000	0.000	0.000
3] Reserves & Surplus		447.134	145.548	56.300
4] (Accumulated Losses)		0.000	0.000	0.000
NETWORTH		600.626	273.291	122.800
LOAN FUNDS
1] Secured Loans		451.093	316.595	157.300
2] Unsecured Loans		8.233	25.688	13.100
TOTAL BORROWING		459.326	342.283	170.400
DEFERRED TAX LIABILITIES		41.772	28.649	0.000
TOTAL		1101.724	644.223	293.200
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		422.349	317.694	159.900
Capital work-in-progress		85.215	46.603	25.100
INVESTMENT		130.169	0.000	0.000
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	286.813	180.057	85.200
	Sundry Debtors	203.547	209.195	65.900
	Cash & Bank Balances	103.869	17.620	13.400
	Other Current Assets	0.000	0.000	0.000
	Loans & Advances	60.057	43.547	22.900
Total Current Assets		654.286	450.419	187.400
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities & Provisions	190.404	170.540	82.700
Total Current Liabilities		190.404	170.540	82.700
Net Current Assets		463.882	279.879	104.700
MISCELLANEOUS EXPENSES		0.109	0.047	3.500
TOTAL		1101.724	644.223	293.200

PROFIT & LOSS ACCOUNT

PARTICULARS		31.03.2006	31.03.2005	31.03.2004
Sales Turnover		946.046	752.616	354.600
Increase / [Decrease] in Stock		30.917	32.256	10.000
Other Income		9.673	6.614	6.200
Total Income		986.636	791.486	370.800
Profit/(Loss) Before Tax		130.436	93.383	23.300
Provision for Taxation		45.348	27.097	8.500
Profit/(Loss) After Tax		85.088	66.286	14.800
Earnings in Foreign Currency :
	Export Earnings	79.105	45.129	NA
	Commission Earnings	0.000	0.000	NA
	Other Earnings	1.309	2.647	NA
Total Earnings		80.414	47.776	NA
Imports :
	Raw Materials	0.000	0.000	NA
	Stores & Spares	0.000	0.526	NA
	Capital Goods	37.964	27.960	NA
	Others	0.000	0.000	NA
Total Imports		37.964	28.486	NA
Expenditures :
	Purchases [Finished Goods]	0.000	89.216	0.000
	Manufacturing Expenses	236.575	161.010	48.100
	Sales Tax	17.925	9.651	0.000
	Raw Material Consumed	495.591	401.520	153.300
	Selling and Administration Expenses	0.000	0.000	23.500
	Excise Duty	0.000	0.000	43.900
	Payment to and provisions for Employees	45.336	28.229	18.900
	Interest	30.835	12.512	7.800
	Power & Fuel	0.000	0.000	34.000
	Depreciation & Amortization	29.936	17.344	13.200
	Other Expenditure	0.000	0.000	4.800
Total Expenditure		856.198	719.482	347.500

QUARTERLY RESULTS

PARTICULARS	30.06.2006 1^st Qtr.	30.09.2006 2^nd Qtr.	31.12.2006 3^rd Qtr.
Sales Turnover	285.100	374.700	408.600
Other Income	5.300	2.200	0.700
Total Income	290.400	376.900	409.300
Total Expenditure	237.100	305.400	329.500
Operating Profit	53.300	71.500	79.800
Interest	9.400	8.900	10.200
Gross Profit	43.900	62.600	69.600
Depreciation	8.500	8.800	10.000
Tax	10.600	9.800	15.700
Reported PAT	23.900	38.100	39.800

Notes

200606 Quarter 1

1. The above Financial Results were taken on record by the Board at its Meeting held on 27th July, 2006. 2. Sales (Income from Operations is inclusive of Excise Duty and Sales Tax. 3. These accounts has been prepared in accordance with the applicable Accounting Standards issued by the Institute of Chartered Accountants of India. 4. The Company operates only in one segment i.e. Forgings. 5. The Limited Review as required under clause 41 of the Listing Agreement has been carried out by the Statutory Auditors. 6. During the quarter the company has received 22 complaints and has resolved 22 complaints. There are no complaints pending at the end of the quarter. 7. Out of the Proceeds of Preferential Issue of Rs. 242.246 millions the amount of Rs. 145.753 millions has been paid towards Plant & Machinery & Land, Rs. 8.934 millions towards issue raising expense and the balance 87.559 millions is invested in Fixed Deposits and Mutual Funds. 8. In terms of Revised Accounting Standard (AS-15) employee benefit applicable w.e.f. 01.04.05 the liabilities are being ascertained by the company and the necessary adjustments will be done at the year end. 9. Other Expenditure includes Rs. 1.58 millions on account of unrealised Exchange Rate Difference. 10. Previous year figures have been regrouped / rearranged wherever necessary to confirm to this year classification.

200609 Quarter 2

EPS is Basic Status of Investor Complaints for the quarter ended September 30, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 5 Complaints disposed off during the quarter 5 Complaints unresolved at the end of the quarter Nil 1.The above Financial Results were taken on record by the Board at its meeting held on October 27, 2006. 2.These accounts has been prepared in accordance with the applicable Accounting Standard issued by the Institute of Chartered Accounts of India. 3.The Company Operates only in one Segment i.e. Forgings. 4. The Limited Review as required under clause 41 of the Listing Agreement has been carried by the Statutory Auditor. 5. Out of the proceeds of Preferential issue of Rs 242.246 million the amount of Rs 148.264 million has been paid towards Plant & Machinery & Land, Rs 8.934 million towards issue raising expenses and the balance 85.048 million is invested in Fixed Deposits. 6. In terms of Revised Accounting Standard (AS-15) employee benefit applicable w.e.f. April 1, 2006 the liabilities are being ascertained by the Company and the necessary adjustments will be done at the end. 7.Previous period figures have been regrouped/rearranged wherever necessary to confirm to this year classification.

200612 Quarter 3

1. The above Financial Results were taken on record by the Board at its meeting held on 19th January, 2007. 2. These accounts has been prepared in accordance with the applicable Accounting Standards Issued by the Institute of Chartered Accountants of India. 3. The Company Operates only in one Segment i.e Forgings. 4. The Limited Review as required under clause 41 of the Listing Agreement has been carried by the Statutory Auditor 5. During the quarter the company has received 5 complaints and has resolved 5 Complaints. There are no Complaints pending at the end of the Quarter. 6. Out of the Proceeds of Preferential Issue of Rs. 242.246 millions the amount of Rs. 170.812 millions has been paid towards Plant & Machinery, Rs. 8.934 millions towards Issue Raising Expense and the balance 62.500 millions is invested in Fixed Deposits. 7. In terms of Revised Accounting Standard (AS-15) employee benefit applicable w.e.f 1.04.06 the liabilities are being ascertained by the company and the necessary adjustments will be done at the year end. 8. Previous Year figures have been regrouped/ rearranged wherever necessary to confirm this year classification.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	0.92	1.29	1.53
Long Term Debt-Equity Ratio	0.39	0.60	0.83
Current Ratio	1.24	1.14	1.18
TURNOVER RATIOS
Fixed Assets	2.45	2.94	2.22
Inventory	4.60	6.34	5.60
Debtors	5.21	6.11	6.13
Interest Cover Ratio	4.90	6.26	3.99
Operating Profit Margin(%)	18.05	12.42	12.49
Profit Before Interest And Tax Margin(%)	15.27	10.35	8.77
Cash Profit Margin(%)	10.70	7.58	7.90
Adjusted Net Profit Margin(%)	7.92	5.51	4.17
Return On Capital Employed(%)	19.60	19.22	14.07
Return On Net Worth(%)	19.51	23.38	16.79

STOCK PRICES

Face Value	Rs.100.00/-
High	Rs.134.50
Low	Rs.131.50

LOCAL AGENCY FURTHER INFORMATION

Industry outlook: 

The outlook of the Indian forging industry is optimistic, influenced by the growth of its automobile, auto-components and railways sectors. The sectoral optimism is based on the following developments: 

Automobile industry:  

It is estimated that the Indian commercial vehicle (CV) industry will double by 2008. The industry produced 3.5 millions CVs in the year 2005-06 and will roll out additional 0.235 million CVs annually by 2008. In the second quarter of 2006 the CV industry recorded a growth of 47.18% and passenger vehicle recorded a growth of 20.4% whereas two-wheelers grew by 18.5%. India is the fourth largest vehicle manufacturer with a market share of 7% in the global market after China (24%), Brazil (8%) and Korea (8%) according to a statistic released by Paris-based International Organisation of Motor Vehicle Manufacturers (OICA). 

The growth of the Indian automobile industry was robust due to an increase in per capita incomes, declining prices, soft interest rate, increased fuel efficiency of new models, better road infrastructure, greater demand for commercial vehicles and strict pollution regulations, favouring accelerated replacement. 

India's automobile sector accounted for a bulk of the purchase of forgings; correspondingly, RKFL's customers emerged as attractive industry proxies. As a result, the industry growth is expected to translate into the Company's growth as well. 

Auto-components industry:  

With India's automobile industry growing at 13% and the outsourcing of components rising, the Indian auto-components industry sustained its growth. 

* The Indian auto-component industry was estimated at USD 8.7 billion with a CAGR of 21.70% for the 2001-05. 

* Auto-component export increased by a CAGR of 22.3% in 2005-06 to a size of USD 1.4 billion in FY2005 (global auto-component industry valued at USD 1,200 billion according to Industry Outlook, 2006-07). 

 * Domestic production increased by 17% in 2005-06 to USD 10 billion (approximately Rs. 450000 millions) while exports jumped 30% to USD 1.8 billion (approximately Rs. 89100 millions). 

 * Export of Indian auto-component industry is expected to touch USD 25 billion by 2015. 

The Company supplies forged automobile components for commercial vehicles in forged and CNC machined conditions; It also supplies finished auto gears in up to seven modules as well as other products. Thus it will be reasonable to assume that the industry growth will translate into sustainable growth for the Company. 

Railways:

The highlights of India's Rail Budget of 2006-07 comprised the following features: 

* Increase in Railways' total plan outlay from Rs. 153490 millions in 2005-06 to Rs. 234750 millions in 2006-07. 

* Proposed commissioning of 55 pairs of new passenger train services and the extension of 37 pairs of trains. 

* Wagon and electric locomotive manufacturing capacity increased by 25% and 17% respectively. 

* Increase in production capacity at the rail wheel factory, integral coach factory and Samastipur workshop. 

The Railways represent an important customer segment for RKFL. The Company supplied Forged and fabricated spares for railway wagons, coaches, diesel and steam locos like hanger, screw, coupling, side frame key, shackle stone, lower spring seats, block hangers and other products. With an increase in the budgetary allocation for wagon and loco manufacturing and proposed increase in the number of new trains, the demand for related products will increase, benefiting the Company. 

Performance review: 

The Company reported an improved performance in 2005-06 compared to the previous year reflected in the following numbers: 

 * 23% increase in production from 10,824 tons in 2004-05 to 13,410 tons in 2005-06. 

 * 27% increase in the topline from Rs. 843.8 millions in 2004-05 to Rs. 1076.7 millions in 2005-06. 

 * 87% increase in the EBIDTA from Rs. 101.9 millions in 2004-05 to Rs. 191.3 millions in 2005-06. 

* 28% increase in the bottomline from Rs. 66.3 millions in 2004-05 to Rs. 85.1 millions in 2005-06. 

In addition to a growth in absolute numbers, the Company strengthened key performance derivatives as well: 

* 402 basis points increase in the EBIDTA margin from 16.60% in 2004-05 to 20.62% in 2005-06.  

* 20% growth in the earning per share from Rs. 5.38 per share in 2004-05 to Rs.6.46 per share in 2005-06. 

* 78 basis points increase in the ROCE from 17.72% in 2004-05 to 18.50% in 2005-06. 

Enhancement of machining facility: 

The Company strengthened its competitive industry position by enhancing its machining and gear-cutting facilities during the year under report. This initiative enabled the Company to scale the value chain: from the manufacture of forging blanks to ready-to-use automotive products like gears and shafts used in commercial vehicles. As a result, the Company transformed from a basic forging unit into an integrated auto component manufacturer. 

CNC turning centre and gear-cutting facility:  

The Company additionally commissioned two state-of-the-art CNC machines from Mazak, Japan, among the leaders in this business segment. In addition, the Company installed a Hobbing machine (H-400) from HMT and three CNC Hobbing machine from (PAL Cooper). These investments now positioned the Company among leading technology-efficient units in its industry in India; besides, they helped the Company develop 35 new products, of which six addressed the needs of international customers and 13 moved towards the gear-cutting section. 

These investments also translated into the following benefits: 

* Flexibility in making different types of critical gears with an accuracy of up to 20 micron. 

* Versatility in the manufacture of critical components in lower time cycle with greater ease. 

* Enhanced productivity due to high-speed machines with a product quality to match international standards. 

* Capacity to manufacture finished auto-gears upto eight modules. 

The Company's gear-cutting facilities comprised of hobbing machines, broaching machines, shaving, shaping equipment, gear chamfering among other facilities. This infrastructure enabled the Company to add value to its product basket, graduating from the supply of forged blanks to machined gears. During the year, 13 such products were manufactured, including the Reverse and Engaging Gears. The Company marketed its gear products to Tata Motors, from whom it received repeat indents. 

Horizontal Machining Centre (HMC) facility:  

The Company invested in an HMC machine sourced from Mazak, Japan, among the leaders in this technology. This initiative enabled the Company to emerge among the few in Eastern India to possess this technology, strengthening its competitive edge. This unit is being used to make gear box assemblies. The benefits of this facility comprise: 

* The ability to manufacture assembled gear box assemblies. Going ahead, it will be able to manufacture other high-value components, namely clutch housing, carrier housing, flywheel housing and cylinder blocks, among other products, significantly widening the proportion of value-added items in its product basket. 

* A high accuracy standard (upto one micron) and is especially suited for the machining of critical components. 

* Performance of drilling, milling, slotting, profile milling, contour milling, champhering, counter sinking, tapping, tread milling, spot facing, boring, back boring, accentric grooming and retaining grain grooming. 

* The machine configuration facilitates the machining of four to five setups in one pallet, significantly reducing time and enhancing productivity. 

* This investment helped the Company emerge as one of the biggest supplier for machining of assembled housing assemblies in finished condition in Eastern India. 

Corporate highlights: 

The Company strengthened its financial structure to part finance the fully automated Ring Rolling Line and installation of the Heat Treatment facilities at Jamshedpur to prepare the Company to capitalize on vibrant business opportunities over the foreseeable future. 

 * The authorised share capital of the Company increased from Rs. 140 millions to Rs. 160 millions with a consequential amendment in the Memorandum and Article of Association. 

 * The Company issued 2252520 equity shares of Rs. 10 each for cash at a premium of Rs. 88 per share aggregating to Rs. 220.7 millions in 2005-06 on a preferential allotment basis to Unit Trust of India Investment Advisory Services Limited-A/c Ascent India Fund in the current financial year 

* The Company issued upto 172410 equity shares of Rs. 10 each at a premium of Rs.106 per share to foreign financial investors on a preferential allotment basis. 

* The paid-up share capital of the Company increased from Rs. 127.743 millions to Rs.151.992 millions during the year on account of the above preferential issue. 

* The Company issued up to 1,29,310 warrants with an option to subscribe up to 1,29,310 shares of Rs.10 each at a price of Rs.116 per share to Basuki Portfolio Private Limited, a promoter group, on a preferential allotment basis. 

Operational review:

The Company reported an impressive performance reflected in improved manufacturing and marketing achievements. 

In-plant performance Operations:  

The Company reported the following operational improvement during the year under report: 

* De-bottlenecking increased production by 23.90% from 10,824 tons in 2004-05 to 13,410 tons in 2005-06. 

 * Streamlining shop-floor efficiency resulted in a decline in the rejection rate from 1.10% to 0.85% and reduction of the reworking hours from 23 hours to 14 hours. 

 * Manufacture of 80 critical dies in the vertical machining centre facility; this helped the Company to develop 10 new items for the mining sector and the automobile industry. 

 * Commissioning of an upsetter forging facility which helped introduce 18 new products for use in the automobiles industry. 

 * Leverage of the CNC and gearcutting facility resulting in the development of 29 new products for the OEM's in the domestic market and six new products for the international market, largely directed at the automobile industry. 

Power saving:  

The rising price of crude oil is a matter of concern for the Company which impacted the fuel cost of the Company during the year under review. The Company embarked on initiatives to reduce the consumption of furnace oil, which is expected to improve its profitability. 

* Modification of the furnace, enabling reduced fuel consumption and idle time and enhancing furnace productivity. 

* Redesigning of the furnace specifications, which optimized heat and reduced furnace oil consumption. 

Products manufactured:  

The Company stabilized its CNC facility, evolving from a supplier of forged products to machined components. It helped the Company introduce about 35 new-machined products. The Company introduced about 94 products in the forging arena out of which 13 products were exported in 2005-06. Out of the new products developed during the year, 50 products catered to the needs of the automobile sector, 16 towards mining, three towards Railways, three towards Defence and nine towards general engineering. 

Marketing Domestic market: The Company strengthened its competitive position within India through the following initiatives: 

* Increased turnover from Rs. 843.9 millions in 2004-05 to Rs. 1076.7 millions in 2005-06. 

 * Extended its focus from the eastern region to other parts of the country. 

 * Supplied products to Indian railways with a presence all over India as well as pan-national brand-enhancing OEMs in Central, East end South India. 

International markets:  

The Company grew its global presence through timely and quality supplies. 

* Increased exports from Rs. 50 millions to Rs. 89.2 millions. 

 * Widened the client base in the international market through the enlistment of two new customers in 2005-06. 

Quality: 

The Company received the TS:16949 certification, the required quality standard for entering into supply agreements with international automobile OEMs. This accreditation will enhance the acceptability of the Company's products in the quality-conscious US and European markets.

Outlook: 

The Company's outlook is optimistic for a number of reasons:  

* The Indian automobile industry grew 13% in the year 2005-06. In the second quarter of the calendar year 2006, commercial vehicle off take grew faster at 47.18% creating a huge replacement market opportunity for forged and auto components. 

* The export of auto components from India is expected to touch USD25 billion by 2015. Auto component exports grew 33% CAGR over the last three years, owing to a huge increase in the outsourcing of auto components from India, translating into a significant boost to India's forging industry. 

* The budget allocation for Indian Railways increased from Rs. 15,3490 millions in 2005-06 to Rs. 23,4750 millions in 2006-07, which will increase the demand for forged products. An increase in the capacity to manufacture wagons and locomotives by 25% and 17% respectively will help the Indian forging industry grow. 

The commissioning of the CNC machining and gear cutting facilities and HMC machining facilities helped the Company migrate up the value chain - from forgings to finished products and diversification into machining of castings - and capture a significant share of the growing auto components market. 

The Company plans to integrate forwards through the installation of heat treatment and grinding facilities, which will help manufacture finished products and enable the Company to emerge as a ore-stop solution for OEMs and Tier I customers in India. 

The Company also plans to install a fully robotic Ring Rolling Line from Germany at Jamshedpur at an estimated investment of about Rs. 600 millions to manufacture crown wheels and bearing races. The line will facilitate the cost-effective manufacture of components by improving productivity and optimizing raw material consumption. 

Fixed Assets :

Land & Land Development, Factory Shed & Building, Office Building, Plant & Machinery, Vehicles, Furniture & Fixtures, Computer and Office Equipments.

Website Details :

Subject was founded on 11th November, 1981. On a bed of integrity, fuelled by burning ambition. Years of staying true to their principles and tireless endeavour has produced rich results. They became a limited company on 25th May, 1995. And today they are an organisation manned by qualified people, with state - of - the - art manufacturing facilities and international levels of quality control. 

The Company is in the approved panel of R.D.S.O. for the manufacture of Screw Couplings, Draw Gear Assembly, Snubber Assembly, Hanger, Block Hanger Side Frame Key and various other forgings items of Railway Coaches and Wagon. It is also in the approved panel of Hindustan Motors Limited., TELCO Limited., BEML Limited., and many other Engineering Units. The Company is an ISO 9002 approved unit accredited by BVQI since 15th August 2000 for manufacture & supply of open & closed plain carbon and low alloy steel forgings in the as- Forged, Heat Treated and Machined condition for Railways, Automobile and General Engineering Purposes.

PRODUCT FEATURES

v Forgings for railway coaches, wagons & locomotives 

v Forgings for automobiles, mining, earthmoving, farm equipment industries and general engg.

v Forgings for valve bodies

v Transmission items 

v Track links, Master Links, Trade Rollers

v Drop forgings from 1 kg to 125 kgs

v Upset forging upto 25 kgs, Ring Rolled items upto 5 kgs

v Forged and Fabricated spares for railway wagons, coaches, diesel and steam locos - like hanger, screw coupling, side frame key, shackle stone, guide, lower spring seats, draw gear assembly, snuber assy, block hangers, draw hook, drawbar etc

v Forged automobile components for heavy commercial vehicles and passenger vehicles in forged and CNC machined condition

v Forged Flanges in M.S. and Stainless Steel in finished condition as per customer specification

v CNC machining capacity for machining any component up to 1200 mm

v CNC machining capacity for machining any component up to 450 mm Dia

v Machining accuracy of 20 microns

v Biggest integrated Forging and CNC machining plant of Eastern Region

v Upset Forgings facility from 50 mm to 125 mm Dia

v Finish auto gears up to 7 modules

v Ring Rolling and Finishing facility for bearing races

v Having latest equipment i.e. CMM (CNC Co-ordinate Measuring Machine) for product quality approval and CNC Gear Tester for Gear quality approval

Apart from standard products, the company undertakes turnkey development of forgings and stampings from raw samples. It also designs and develops special dies for customers.

CMT REPORT (Corruption, Money Laundering & Terrorism]

The Public Notice information has been collected from various sources including but not limited to: The Courts, India Prisons Service, Interpol, etc.

1] INFORMATION ON DESIGNATED PARTY

No records exist designating subject or any of its beneficial owners, controlling shareholders or senior officers as terrorist or terrorist organization or whom notice had been received that all financial transactions involving their assets have been blocked or convicted, found guilty or against whom a judgement or order had been entered in a proceedings for violating money-laundering, anti-corruption or bribery or international economic or anti-terrorism sanction laws or whose assets were seized, blocked, frozen or ordered forfeited for violation of money laundering or international anti-terrorism laws.

2] Court Declaration :

No records exist to suggest that subject is or was the subject of any formal or informal allegations, prosecutions or other official proceeding for making any prohibited payments or other improper payments to government officials for engaging in prohibited transactions or with designated parties.

3] Asset Declaration :

No records exist to suggest that the property or assets of the subject are derived from criminal conduct or a prohibited transaction.

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

6] Records on Int’l Anti-Money Laundering Laws/Standards :

Charges or investigation registered against subject: None

7] Criminal Records

No available information exist that suggest that subject or any of its principals have been formally charged or convicted by a competent governmental authority for any financial crime or under any formal investigation by a competent government authority for any violation of anti-corruption laws or international anti-money laundering laws or standard.

8] Affiliation with Government :

No record exists to suggest that any director or indirect owners, controlling shareholders, director, officer or employee of the company is a government official or a family member or close business associate of a Government official.

9] Compensation Package :

Our market survey revealed that the amount of compensation sought by the subject is fair and reasonable and comparable to compensation paid to others for similar services.

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

MIRA INFORM as part of its Due Diligence do provide comments on Corporate Governance to identify management and governance. These factors often have been predictive and in some cases have created vulnerabilities to credit deterioration.

Our Governance Assessment focuses principally on the interactions between a company’s management, its Board of Directors, Shareholders and other financial stakeholders.

CONTRAVENTION

Subject is not known to have contravened any existing local laws, regulations or policies that prohibit, restrict or otherwise affect the terms and conditions that could be included in the agreement with the subject.

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.42.74
UK Pound	1	Rs.84.90
Euro	1	Rs.57.79

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	8
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--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	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		57

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	Unfavourable & favourable factors carry similar weight in credit consideration. Capability to overcome financial difficulties seems comparatively below average/normal.	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
NR		In view of the lack of information, we have no basis upon which to recommend credit dealings	No Rating

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