MIRA INFORM REPORT

Report Date :

07.02.2007

IDENTIFICATION DETAILS

Name :	ESSAR STEEL LIMITED
Registered Office :	Post : Hazira, District Surat – 394 270, Gujarat
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	01.06. 1976
Com. Reg. No.:	04-13787
CIN No.: [Company Identification No.]	L27100GJ1976PLC013787
TAN No.: [Tax Deduction & Collection Account No.]	SRTE00025E
Legal Form :	Public Limited Liability company. The company’s shares are listed on the Stock Exchanges.
Line of Business :	Manufacturers of Hot Briquetted Iron, Hot Rolled Coils/ Sheets and Pellets.

RATING & COMMENTS

MIRA’s Rating :

Ba

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

Maximum Credit Limit :	USD 161000000
Status :	Satisfactory
Payment Behaviour :	Usually Correct
Litigation :	Clear
Comments :	Subject is an important company of Essar Group managed and controlled by Ruia brothers. The company’s shares are listed on the stock exchange. Due to overall improvement in steel industry in India and internationally the company has improved its results. Its domestic suppliers are paid on an average 60 days beyond terms. Payments to overseas suppliers are regular and as per commitments. The company can be considered normal for business dealings at usual trade terms and conditions.

LOCATIONS

Registered Office :	Post : Hazira, District Surat – 394 270, Gujarat, India
Tel. No.:	91-261-28326260/26682400/2872400
Fax No.:	91-261-28326462/26698296
E-Mail :	webmaster@essar.com corporatecommunications@essar.com
Website :	http://www.essar.com
Corporate Office :	Essar House, 11, Keshavrao Khadye Marg, Mahalaxmi, Mumbai – 400 034, Maharashtra, India
Tel. No.:	91-22-24950606
Fax No.:	91-22-24954283
E-Mail :	webmaster@essar.com
Factory :	HRC Plant, 27 Km, Surat Hazira Road, Post Hazira, District Surat – 394 270, Gujarat, India
Branch :	Ahmedabad 172/2 Premchand Annexe, Behind Popular House, Ashram Road, Ahmedabad 380009, Gujarat, India Telephone: 91-79-26580277/ 3628 Fax: 91-79-26581917/ 5717 Chennai 77, C.P. Ramaswamy Road, Abhiramapuram, Chennai 600018, Tamilnadu, India Telephone: 91-44-24991992/ 1206 Fax: 91-44-24994922 New Delhi 21 Phiroze Gandhi Road, Lajpat Nagar III, New Delhi 110 024, India Telephone: Group : 91-11-29842563 / 9503 Essar Oil : 91-11-29836079 / 51727378 Fax: Group : 91-11– 29844370 Essar Oil : 91-11- 51017349 / 51716580 Email: corporatecommunications@essar.com Vadinar Essar Oil Limited Refinery Project Site Head Post Office, Post Box No. 24 Khambhalia 361 305, District Jamnagar, India Telephone: 91-2833-241444 Fax: 91-2833-241414 Vizag Hy-Grade Pellets Limited Scindia Road, Near Flyover, Visakhapatnam 530 004, Andhra Pradesh, India Telephone: 91-891-2559901-10 Fax: 91-891-2559383/ 2556907 Overseas Offices China Name: Mr. Deep Banerjee Company: Essar Steel Limited / Essar - Beijing Representative Office Unit 1509, China World Tower 1, China World Trade Centre, No 1 Jian Guo Men Wai Avenue, Beijing 100004, P R CHINA Telephone: +86-10-58669923 (Board) +86-10-58669925 (Direct) Fax: +86-10-58669924 Email: deepessar@hotmail.com Doha - Qatar P. O. Box 24086, Doha - State of Qatar Telephone: (+974) 467 4343 Fax: (+974) 467 0535 Indonesia Company: PT Essar Dhananjaya. Graha Essar, Bekasi Fajar Industrial Estate, Industri 3 , Area Kav # B1 Cibitung, Bekasi 17520 West Java, Indonesia. Telephone: (0062 21) 8980152/ 53/ 54, 8980203/ 4/ 6/ 7 Tlx: 64827 ESSAR IA Fax: (0061 21) 8980150/ 51 Email: marketing@essar.co.id United Arab Emirates Name: Essar Gulf FZE LOB 6, G-18, Post Box No. 61078, Jabel Ali, Dubai, UAE Telephone: (00 9714) 881 7278 Fax: (00 9714) 881 7281 USA - New York 36th Floor, 145, E 48th Street, New York, NY 10017 Telephone: (001 ) 212-7585520 Fax: (001 ) 212-7585860

DIRECTORS

Name :	Shashi Ruia
Designation :	Chairman
Name :	Ravikant Ruia
Designation :	Vice-Chairman
Name :	Prashant Ruia
Designation :	Managing Director
Name :	Vikram Amin
Designation :	Director – Marketing
Name :	V. G. Raghavan
Designation :	Director - Finance
Name :	Jatinder Mehra
Designation :	Director
Name :	S. V. Venkatesan
Designation :	Director
Name :	Sanjeev Shriya
Designation :	Director
Name :	Jitender Balakrishnan
Designation :	Nominee - IDBI
Name :	G. A. Nayak
Designation :	Nominee - UTI
Name :	G. D. Goswami
Designation :	Nominee - ICICI Bank
Name :	Narottam B. Vyas
Designation :	Company Secretary

MAJOR SHAREHOLDERS

Equity Shares

Names of Shareholders	No. of Shares	Percentage of Holding
EQUITY SHARES
[A] Promoters and Promoter Group
1. Indian
Bodies Corporate	329691487	28.93
2. Foreign
Bodies Corporate	662894250	58.16
[B] Public Shareholding
1. Institutions
Mutual Funds / UTI	760590	0.07
Financial Institutions / Banks	4443259	0.39
Insurance Companies	4062199	0.36
Foreign Institutional Investors	22568578	1.98
Financial Corporation	190	0.00
2. Non-Institutions
Bodies Corporate	32076425	2.81
Individual shareholders holding nominal share capital up to Rs. 0.100 million	68729045	6.03
Individual shareholders holding nominal share capital in excess Rs. 0.100 million	12024688	1.05
Any Other : NRIs and OCBs	2560177	0.22
TOTAL	1139810888	100.000

MAJOR SHAREHOLDERS

[Preference Shares]

Names of Shareholders	No. of Shares	Percentage of Holding
EQUITY SHARES
[A] Promoters and Promoter Group
1. Indian
Bodies Corporate	31987658	15.76
2. Foreign
Bodies Corporate	87168035	42.96
[B] Public Shareholding
1. Institutions
Mutual Funds / UTI	433390	0.21
Financial Institutions / Banks	1530970	0.75
Insurance Companies	3631202	1.79
Foreign Institutional Investors	3971302	1.96
Financial Corporation	460	0.00
2. Non-Institutions
Bodies Corporate	11484999	5.66
Individual shareholders holding nominal share capital up to Rs. 0.100 million	49793943	24.54
Individual shareholders holding nominal share capital in excess Rs. 0.100 million	10979722	5.41
Any Other : NRIs and OCBs	1943151	0.96
TOTAL	202924832	100.00

BUSINESS DETAILS

Line of Business :	Manufacturers of Hot Briquetted Iron, Hot Rolled Coils/ Sheets and Pellets.
Products :	Product Description ITC Code Ferrous Products Obtained by Direct Reduction of Iron Ore & Other Spongy Ferrous Products in Lumps Pellets for Similar Forms 7203 Flat Rolled Products of Iron or Non- Alloy Steel of a Width of 600 mm or More Hot Rolled, Not Clad, Plated or Coated 7208 Flat Rolled Products of Iron or Non Alloy Steel of A Width of Lesr Tham 600 MM Hot Rolled Not Clad, Plated or Coated 7213 Flat Rolled Products of Iron or Non- Alloy Steel of a Width of Less Than 600 mm Hot Rolled, Not Clad, Plated or Coated 7211
Exports to :	Middle East Asia, South East Asia including China, U.S.A. and Western Europe

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Hot Briquetted Iron Plant	MT	3400000	2809284
Hot Rolled Coils / Sheets	MT	2400000	2324362

GENERAL INFORMATION

No. of Employees :	2732
Bankers :	ü State Bank of India ü Punjab National Bank ü Bank of India ü Allahabad Bank ü State Bank of Patiala ü State Bank of Mysore ü Indian Bank ü State Bank of Saurashtra ü State Bank of Indore ü Standard Chartered Bank ü Export Import Bank of India

Banking Relations :	Satisfactory
Auditors :	B.P. Jain and Company Chartered Accountants, A-16, Everest, Tardeo Road, Tardeo, Mumbai 400 034, Maharashtra, India
Group Companies :	ü ClickforSteel Services Limited (CFS) ü Essar Agrotech Limited (EAL) ü Essar Constructions Limited (ECL) ü Essar House Limited (EHL) ü Essar Information Technology Limited (EITL) ü Essar Investment Limited (EIL) ü Essar Oil Limited (EOL) ü Essar Projects Limited (EPL) ü Essar Properties Limited (EPRL) ü Essar Shipping Limited (ESL) ü Essar Teleholdings Limited (ETL) ü Futura Travels Limited (FTL) ü India Securities Limited (ISL) ü Bhander Power Limited (BPL) ü Essar World Trade Limited (EWTL)
Subsidiaries :	ü Steelco Gujarat limited
Membership :	ü Confederation of Indian Industry
Associates :	ü Essar Global Limited, Cayman Islands ü Essar Infrastructure Holdings Limited, Mauritius ü Essar Steel Holdings Limited, Mauritius ü Essar Energy Holdings Limited, Mauritius ü Essar Logistics Holdings Limited, Mauritius ü Asia Pacific Markets Limited, Mauritius ü Asia Pacific Corporation Limited, Mauritius ü Asia Pacific Enterprises Limited, Mauritius ü Asia Far East Limited, Mauritius ü Essar Sisco Ship Management Limited, India ü Essar Power Holdings Limited, Mauritius ü Essar Investments Limited, India ü Tetech Investments (India) Limited ü ETHL Global Capital Limited ü Hazira Steel 2, Mauritius  ü P T Essar Dhananjaya, Indonesia (PTED) ü Essar Power Limited (EPOL), India ü Hy-Grade Pellets Limited (HGPL)

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
3520000000	Equity Shares	Rs.10/- each	Rs. 35200.0000 millions
60000000	0.01% Cumulative Preference Shares	Rs.90/- each	Rs. 5400.000 millions
60000000	Redeemable Cumulative Preference Shares	Rs.90/- each	Rs. 5400.000 millions
100000000	10% Cumulative Preference Shares	Rs.10/- each	Rs. 1000.000 millions
300000000	0.01 % Cumulative Preference Shares	Rs.10/- each	Rs. 3000.000 millions
65000000	8 % Cumulative Preference Shares	Rs.350/- each	Rs. 22750.000 millions
	GRAND TOTAL		Rs. 72750.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
507312080	Equity Shares	Rs.10/- each	Rs. 5073.121 millions
4520703	Add : Shares Forfeited		Rs. 6.700 millions
55222000	0.01% Cumulative Preference Shares	Rs.90/- each	Rs. 4970.000 millions
	GRAND TOTAL		Rs. 10049.821 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
2785290000	Equity Shares	Rs.10/- each	Rs. 27852.900 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		27852.900	10049.800	5079.700
2] Redeemable Preference Shares		0.000	332.700	740.600
3] Reserves & Surplus		12461.800	6866.100	14429.600
4) Advance subscription towards share capital		0.000	0.000	4970.000
4] (Accumulated Losses)		0.000	0.000	(13563.000)
NETWORTH		40314.700	17248.600	11656.900
LOAN FUNDS
1] Secured Loans		75346.400	41263.200	44552.500
2] Unsecured Loans		6504.600	6842.700	6973.600
TOTAL BORROWING		81851.000	48105.900	51526.100
DEFERRED TAX LIABILITIES		0.000	0.000	688.700
Long-term Advances from Customer		0.000	660.500	1380.200
TOTAL		122165.700	66015.000	65251.900
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		63984.500	32489.000	34855.300
Capital work-in-progress		28873.600	5896.400	1380.200
INVESTMENT		1829.700	7683.800	7726.800
DEFERREX TAX ASSETS		0.000	4809.600	6768.300
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	14853.400	9332.200	6942.800
	Sundry Debtors	5401.600	4713.000	3936.600
	Cash & Bank Balances	7257.900	2531.500	956.300
	Loans & Advances	24970.600	7380.100	9672.400
Total Current Assets		52483.500	23956.800	21508.100
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities and Provisions	25005.600	8820.600	6986.800
Total Current Liabilities		25005.600	8820.600	6986.800
Net Current Assets		27477.900	15136.200	14521.300
TOTAL		122165.700	66015.000	65251.900

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	73358.700	61212.700	37176.500
Profit/(Loss) Before Tax	6959.800	7941.000	940.700
Provision for Taxation	1658.000	2039.500	340.800
Profit/(Loss) After Tax	5301.800	5901.500	599.900
Export Value	N.A.	20753.300	9887.100
Import Value	N.A.	7373.600	5420.300
Total Expenditure	66398.900	41845.200	28421.300

QUARTERLY RESULTS

PARTICULARS	30.06.2006 [1^st Quarter]	30.09.2006 [2^nd Quarter]	31.12.2006 [3^rd Quarter]
Sales Turnover	17190.900	20792.500	21073.600
Other Income	11.400	23.300	81.300
Total Income	17202.300	20815.800	21154.900
Total Expenditure	13274.800	15684.900	15860.500
Operating Profit	3927.500	5130.900	5294.400
Interest	1806.800	1368.600	1231.700
Gross Profit	2120.700	3762.300	4062.700
Depreciation	1491.900	1490.100	1489.100
Tax	66.200	(59.300)	22.300
Reported PAT	411.300	1543.400	1795.600

200606 Quarter 1

The above results were reviewed by the Audit Committee in it's meeting held on 31^st July, 2006 and taken on record at the meeting of Board of Directors held on that date, 2, The aggregate of non-promoters share holding was 147,122,743 equity shares 25.34% as on 30^th June, 2006. (130,347,417 equity shares 42.82% as on 30^th June, 2005). The paid up Equity Share Capital has increased from Rs. 580.50 millions as at 30^th June 2006 to Rs. 1,139.81 millions on 10^th July, 2006, pursuant to the Order of the Honourable High Court of Gujarat dated 17^th June, 2006. The earnings per share have been calculated based on the paid up capital outstanding as on 30^th June 2006. 3. The auditors qualifications on the accounts of the Company for the year ended 31^st March, 2006 have been adequately explained in the notes to the accounts as well in the previous such statement published under clause 41 of the listing agreement, 4. The number of investors complaints received during the quarter, resolved and pending are Pending as at 01.04.2006 : - Received during the Quarter ; 247 Disposed off during the Quarter: 235 Pending as at 30.06.2006 : 12 5, The figures have been regrouped l reclassified wherever necessary. The figures for the quarter ended 30.06.06 are not comparable with figures for the quarter ended 30.06.05 as the figures for the current quarter is after amalgamation of Hygrade Pellets Limited and Steel Corporation of Gujarat Limited with the Company.

200609 Quarter 2

Expenditure Includes Materials Consumed & Others Rs. 10598.100 million Energy Cost Rs.5493.800 million Staff Cost Rs. 360.400 million Other expenditure Rs 1460.300 million (Increase)/Decrease in Finished Goods/Works in Progress Rs. (2418.400) million Tax Includes Provision for Current Tax Rs 254.900 million Deferred Tax Rs 788.100 million Fringe Benefit Tax Rs 11.300 million MAT credit Rs (325.500) million EPS is Basic Status of Investor Complaints for the quarter ended 30.09.2006 Complaints Pending at the beginning of the quarter 12 Complaints Received during the quarter 301 Complaints disposed off during the quarter 311 Complaints unresolved at the end of the quarter 02 1. The above results were reviewed by the Audit Committee in it's meeting held on 31.10.2006 and taken on record at the meeting of Board of Directors held on 31.10.2006. 2. The aggregate of public share holding was 147,123,894 equity shares 12.92% as on 30.09.2006 (130,336,047 equity shares 42.82% as on 30.09.2005). 3. The Company is engaged in only one segment viz Steel hence there are no reportable segmet as per Accounting Standard As 17. 4. The auditors qualifications on the accounts of the Company for the year ended 31.03.2006 have been adequately explained in the notes to the accounts as well in such statement published under clause 41 of the listing agreement for the year ended 31.03.2006. 5. The figures have been regrouped / reclassified wherever necessary. The figures for the quarter and half year ended 30.09.2006 are not comparable with figures for the quarter and half year ended 30.09.2005 as the figures for the current quarter are after amalgamation of Hygrade Pellets Limited and Steel Corporation of Gujarat Limited with the Company.

200612 Quarter 3

The above results were reviewed by the Audit Committee in its meeting held on 29.01.2007 and taken at the meeting of Board of Directors held on that date 2. The Agreement of Public share holding was 147225151 equity shares(12.92 %) as on 31.12.2006. (130336047 equity shares (42.82) as on 31.12.2005 3. The Company is engaged in only one segment viz Steel hence there are no reportable segments as per AS-17 4. Other expenditure for the current quarter includes Rs.147.300 millions towards reversal of Profit on sale of investment recorded during the year ended 31.03.2006. The reversal is on account of non completion of the transaction 5. The number of investors complaints received during the quarter, resolved and pending are Pending as at 01.10.2006 2 Received during the quarter 366 Disposed off during the quarter 368 Pending as at 31.12.2006 - 6. Upon request of the principal promoters of the Company, the Board of Directors of the Company have decided to obtain approval of the shareholders for delisting of Equity Shares of the Company form Bombay Stock Exchange & National Stock Exchange 7. The Comments made by the auditors in the quarters ended 30.09.2006 pertaining to credit of Minimum Alternative Tax (MAT) and creation of Deferred Tax Assets(DTA) are being explained based on the Management projection of the profit for the future period. The management is therefore of the opinion that the credit taken therein shall be suitably dealt with through the attainment of profit in the future period. As regards auditors comment regarding provisional set off the 'Securities Premium Account' in the accounts for the year ended 31.03.2006 it is stated that the company has since obtained the shareholder approval for the same and has made application to the Honorable High Court of Gujarat under section 78 and 100 of the Companies Act for confirmation of the same. The sanction of the Court is awaited.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Debt-Equity Ratio	2.27	4.41	10.80
Long Term Debt-Equity Ratio	1.93	3.89	9.76
Current Ratio	1.43	1.41	1.35
TURNOVER RATIOS
Fixed Assets	0.79	0.95	0.60
Inventory	5.66	8.03	6.31
Debtors	13.55	15.11	11.86
Interest Cover Ratio	2.06	2.75	1.13
Operating Profit Margin(%)	23.80	29.88	24.79
Profit Before Interest And Tax Margin(%)	16.76	23.84	14.77
Cash Profit Margin(%)	13.59	17.32	11.13
Adjusted Net Profit Margin(%)	6.55	11.28	1.11
Return On Capital Employed(%)	12.28	22.70	8.12
Return On Net Worth(%)	30.44	46.88	2.42

STOCK PRICES

Face Value	Rs. 10.00/-
High	Rs. 45.80/-
Low	Rs. 44.00/-

LOCAL AGENCY FURTHER INFORMATION

HISTORY

Promoted by the Bombay-based Essar group controlled by the Ruias, Essar Steel initially commenced operations of specialized construction in Jun.'76 as Essar Constructions. Its name was changed to Essar Offshore and Explorations in May '87 and later to Essar Gujarat in Aug.'87. It became Essar Steel in 1995. 

Its energy division was operating the largest fleet of rigs in the private sector. In 1987-88, it diversified into sponge iron and set up a 8,80,000 tpa gas-based plant at Hazira, Gujarat. The plant incorporating technology innovated by Midrex Corporation, US, commenced production in Aug.'90 with two 4,40,000 tpa modules. A third module, of similar capacity, commenced operations in 1993. The total capacity was increased to 1.6 mtpa in 1993, with a capability to reach 1.76 mtpa. The company again diversified into the manufacture of steel by setting up a 2-mtpa hot-rolled strip plant which was part-financed by a rights issue in Oct.'92. The plant commenced production in Sep.'95. Later the company transferred its energy and offshore divisions to Essar Oil. 

A pelletisation project was set up at Visakhapatnam as a strategic backward integration in collaboration with Lurgi, Germany, which commenced trial run production in Nov'96. It has a joint venture namely PT Essar Dhananjaya in Indonesia with technology from Hitachi, Japan, to produce cold rolled products with a capacity of 2,00,000 tpa was commissioned.

In 1996-97, the company also commissioned its downstream complex with a plateline capacity of 4,00,000 metric tones comprising two slitting lines, one light gauge shear line and one heavy gauge shear line to cater to the lucrative plates market.

The company has become the country's first integrated steel plant to receive both ISO 9002 and TUV certifications. During 1998-99, Essar Minerals Limited presently Hy-Grade Pellets Limited (HGPL) has become wholly owned subsidiary of the company. 

To enhance brand equity for "Essar 24 Carat Steel brand and to ensure long term relationship with customers, the company plans to launch more campaigns during the fiscal 2002. HGPL is ceased to be a subsidiary of the company consequent to allotment of 51% of its equity capital to Stemcor Minerals.

The company has acquired the balance 51% equity stake in Hy-Grade pellets Limited and 100% equity stake in Steel Corporation of Gujarat Limited. Further the company proposed amalgamation of both these subsidiaries with the Company with effect from 1st April 2005 and this is subject to approvals.  

The Company has planned to increase the capacity to 4.6 Million MTPA in next 2 years. The company has planned to increase the pellet making capacity at Visakhapatnam from 4 to 8 Million tonnes in the current year. The company has initiated production and sales of HR Pickled and Oiled, Cold Rolled and Galvanised Products. Further the company has launched shot blasted and primer coated plates for shipbuilding and general engineering applications.

The company has increased its installed capacity of Hot Briquette Iron Plant by 1400000 MT during 2004-05 and with this expansion the total installed capacity of Hot Briquette Iron Plant has increased to 3400000 MT.

OPERATIONS AND PERFORMANCE HIGHLIGHTS 

Operations

HR Coil production for the year ended March 31, 2006 grew by 10.8% to 2.58 million tones. 

The Company introduced Cold Rolled Close Annealed products (CRCA) and Extra Deep Drawing (EDD) grade in a record time of five months after completion of successful trials. The development and successful introduction of dual phase steel has put the Company in the list of select few producers of this grade internationally. This grade finds growing application in the highly demanding automotive and auto component sectors. 

Sales and Marketing 

Total sales value for the year registered a growth of 8% at Rs.70585.9 millions as against Rs.65378.1 millions in 2004-05. 

Sales volumes at 2,479,802 tonnes showed an increase of 9.45% over 2,265,599 tonnes in the corresponding period of the previous year. The Company's domestic sales volume at 1,788,120 tonnes registered an increase of 21.02% over 1,477,555 tonnes sold in the previous year. The strong domestic demand saw the Company's sales to domestic markets grow at the cost of export volumes which showed a reduction of 12.22% at 691,682 tonnes from a level of 788,044 tonnes in the previous year.  

The Company's focus on increasing its share in high value, speciality segments resulted in the share of such products going up to 48% of total sales as compared to 37% in the previous year. 

The Company received letters of appreciation from major auto and white goods manufacturers regarding the successful trial and introduction of CRCA and EDD grades of steel. 

The 'Sona' brand of products for the construction segment performed extremely well in the year under report with sales volumes going up from 30,000 tonnes to 57,000 tonnes. 

The Company's exports constitute approximately 27.89% of overall revenues and continue to be well balanced across several markets in Europe, Middle East, NAFTA countries, Africa, Australia and South East Asia. The Company received the top national and regional exporter's trophy from the Engineering Export Promotion Council. The Company's multi pronged strategy on focusing on speciality products and offering a diverse range in the value added segment in Cold Rolled as well as Hot Rolled products has yielded excellent results. The Company received its largest ever single order of USD 186 million for the supply of API grade steel to Iran. This product is a winner in the Middle East markets due to their requirements of high quality and speciality grades for the transportation of crude and finished petroleum products. 

Essar Steel was the only Indian Steel company to successfully contest anti dumping action in the United States of America. 

Operations 

The year under report has seen some significant developments at Essar Steel. The Company implemented several measures to ensure long term growth, stability and profitability and protect it from the cyclicality that is inherent in the industry. The first and major achievement was making Essar Steel a totally integrated steel producer from iron ore to ready-to-market products, and ensure control at every stage in the manufacturing chain. The Company completed the acquisition of Hy-Grade Pellets (HGPL) and Steel Corporation of Gujarat (SCGL). The Company also commissioned the 267-km pipeline, which transports the beneficiated iron ore slurry from Bailadilla in Chattisgarh to Visakhapatnam where the Company's pellet plant is located. At the other end of the manufacturing process, the Company commissioned the Cold Rolling Mill in September 2005. The commissioning of an additional 355 MW power capacity at Hazira by Essar's Power Group will meet the enhanced requirements of the steel plant for its expansion projects. 

The capacity expansion to 4.6 million tonnes per annum is on track and they expect to complete this by the third quarter of this year. During the year, the Company further strengthened its information technology platform and extended the implementation of SAP to several other areas of operations, including marketing, HR, logistics and distribution. This will improve the accuracy and timeliness of decision making and contribute to better efficiencies.

The Company believes that these steps will yield considerable benefits of costs, seamlessness in operations, assurance of adequate raw material and infrastructure and most importantly value addition in the product range.

Finance 

The year has seen some significant developments on the financial front, the most important one being the repayment of the entire CDR debt. This, they believe offers the Company greater leeway in operational matters and positions the company in an advantageous position in financial markets for its future plans. 

The Company's net worth has gone up from Rs.17250 millions to Rs.40320 millions and the Company's financial ratios have improved significantly. The Company expects the full benefits of integration and expansion to accrue in the coming years. 

The Company's ability to exit from the Corporate Restructuring Programme (CDR) has resulted in a reduction in the average cost of funds. The company has also brought in additional preference shares aggregating to Rs 19576 millions which was utilized towards acquisition of Stemcor's 51% stake in Hy-Grade Pellets Limited (Pelletisation Plant) and 100% stake in Steel Corporation of Gujarat Limited, (Cold Rolling Mill). Essar steel is today fully integrated with control at every stage of manufacture. During the year, the Company raised and utilized Term facilities/ Debentures of over Rs 10000 millions to finance the capital expansion programme to increase the current capacity from 2.4 MPTA to 4.6 MTPA at Hazira. 

Similarly, over Rs 3500 millions was raised and utilized during the year to part finance a beneficiation plant at Bailadilla, a slurry pipe line between Bailadila and Visakhapatnam and the second Pelletisation Plant of 4 MTPA capacity at Visakhapatnam. A further sum of over Rs 1000 millions has been raised and utilized during the year for the expansion from 1.19 million tonnes per annum to 1.40 million tonnes per annum at the Cold Rolling Mill complex at Hazira. 

The company had Technical Tie-up with Thyssen Krup Consultancy to improve Hot Strip Mill plant performance.

The company is in trade terms with :

Ø MIDREX Corporation, U.S.A./Voest Alpine, Austria

Ø METCHEM Inc. Canada

Fixed Assets:

Ø Land

Ø Buildings

Ø Plant and Machinery

Ø Furniture and Fixtures

Ø Office Equipment

Ø Vehicles

Ø Ships and Vessels

Ø Railway Sidings

Ø and Wagons

The company is the second largest private sector steel company.

The company has technical collaboration with :

˜ Voest Alpine, Austria

AS PER WEBSITE

About Us

The Essar Group is one of India's largest corporate houses with interests spanning the manufacturing and service sectors in both old and new economies: steel, oil & gas, power, telecom & BPO, shipping and construction. The group’s enterprise value is approximately US$ 15 billion (Rs. 67,0000 millions)  and a turnover of over US$ 2.2 bn (Rs. 100 billion). Strategic investments made by the group over the past decade have resulted in the creation of tangible and intangible assets that are at the heart of the Indian economy.

The Group takes pride in being a high-performance multinational organisation, providing world-class services and products. Manned by a highly efficient and dynamic team of employees, the Group is growing stronger every day. A committed corporate citizen, the group provides unwavering support to the community as well as initiates various social and ecological drives that have a positive impact on society.

World - class standards

They insist on setting and surpassing world-class benchmarks in everything they do. No wonder they have the world’s largest gas-based sponge iron plant and are one of the world’s largest integrated sea logistics companies that owns India’s largest double hull, double bottom VLCC. All their businesses are highly integrated across the value chain and use the latest technology to stay strong and agile. They have invested several billion dollars on exclusive state-of-the-art technology because they believe that it confers strong strategic advantages.

History

The Essar group was founded over three decades ago by the Ruia family and is headed by Chairman Shashi Ruia and Vice-Chairman Ravi Ruia. The Ruia family has been in business and trading since the 1800s, when the family first moved to Mumbai from Rajasthan in Western India. In 1956, Nand Kishore Ruia, the group founder, moved south to Chennai to begin independent business activities. In 1969, following the untimely demise of Nand Kishore Ruia, his sons Shashi and Ravi Ruia took over the group. Along with a team of seasoned professionals, the Ruias have built the perfect platform for Essar's accelerating growth. With a strong foundation at India’s industrial core and in the sunrise services sector, Essar has stayed firmly in the forefront of new opportunities. An early start has made them a key player in India's exploding telecom market. Similarly, they set up India’s first independent power plant and its first new generation private steel plant.

Touching millions of lives

For decades, they have quietly touched the lives of millions of people with the steel to build cars, the oil to fuel factories, the power to light up thousands of lives and the pipelines to bring drinking water to remote villages. Today, they have come closer by connecting customers with their cellular phone services and talking to thousands of people through their call centres, a countrywide chain of fuel outlets and marketing steel at the retail level.

Mission

To create enduring value for customers and stakeholders in core manufacturing and service businesses,

through world-class operating standards, state-of-the-art technology and the 'positive attitude' of their people.

Management Team

Essar Group

Shri. Shashi Ruia Chairman

Shri. Ravi Ruia Vice Chairman

Shri. Prashant Ruia Director

Shri. Anshuman Ruia Director

Corporate Functions

Mr. Suresh Sundaram Director - Corporate Aviation

Mr. S. V. Venkatesan Resident Director - Chennai

Mr. J. Mehra Resident Director - New Delhi

Mr. Harsh Shah Resident Director - Gujarat

Mr. Madhu S. Vuppuluri Resident Director - New York

Mr. Sunil Bajaj President - Corporate Affairs

Mr. V Krishnan Head - Corporate Communications

Mr. Y. M. Shivamurthy Head - Legal

Mr. N. S. Paramasivam Head - Forex & Treasury

Mr. Dinyar M. Jivaasha Head - Corp. Risk & Ins. Mgmt.

New Room

Essar to set up Rs 15k cr refinery in Jamnagar SEZ

Economic Times - August 28, 2006

Tushar Prabhune

Another big-ticket investment is being lined up in petro-town Jamnagar. The Essar group has decided to set up a Rs 15,0000 millions, 16-20 million tonne greenfield refinery in its upcoming SEZ near Jamnagar. This will be in addition to Essar's new 10.5-MT Vadinar refinery, which will go on stream in October this year.

Jamnagar already boasts of the world's largest grassroots refinery built by Reliance Industries (RIL). RIL is also setting up a Rs 25,0000 millions, 27-MT refinery in its SEZ in the district. Essar has set a target of touching a cumulative refining capacity of 32 MT by '09-10.

The capacity expansion will be carried out in a phased manner. While the refinery at Vadinar in Jamnagar is ready for commissioning, the new capacities will be a part of Essar's 1,000-hectare SEZ in the same district.

The conglomerate is planning to commission the Vadinar refinery in the first week of October as construction work on the Rs 16,0000 millions refinery has been completed, a source said. An Essar spokesperson told ET: "They are looking at various growth opportunities. But it is too premature to comment.

Essar has already got a formal approval for developing the 1,000-hectare SEZ, for which it would pump in an estimated Rs 15,0000 millions - most of which would be invested in constructing the new refinery.

Essar Oil, the group company executing the refinery project, has already begun the groundwork for construction of the new refinery as well as other downstream petrochemicals units that would be set up in the SEZ.

Executives of Essar Oil have begun parleys with the state ports regulatory authority, asking the latter to suggest suitable locations for putting up single buoy moorings (SBMs) in Gujarat waters.

The company has sought approval for two SBMs. The company is preparing a detailed project report for the new refinery as well as the two SBMs, the source added.

Press Releases

Essar Oil signs two production sharing contracts with
Myanmar Govt. for oil exploration

May 09, 2005

Essar Oil Limited (EOL) signed a Production Sharing Contract with the Government of Myanmar for exploration of oil exploration in two Blocks - one each for onshore and offshore blocks. The contracts were signed by Mr. U.San Lwin- Managing Director of Myanmar Oil & Gas Enterprise, on behalf of the Government of Myanmar. The Minister for Energy, Brigadier General Lun Thi was also present. Mr. A. N. Sinha signed the contracts on behalf of Essar Oil Limited.

Essar is the first Indian private sector company to sign an agreement in this area in Myanmar
EOL's bid for the two contiguous exploration blocks in offshore (Block A2) area and adjoining on land area (Block L).was made after detailed examination of geo-scientific data at MOGE office in January 2005 by the EOL team.

The blocks are ideally located between proven gas blocks and aligned along the regional corridor of gas discoveries south of Bangladesh, including the highly productive Sangu Gas field in Bangladesh. The Rakhine coast lies along the eastern side of these blocks, providing favourable logistic support.

Essar Oil is a fully integrated oil company with operations covering the entire value chain of oil exploration to retailing of petroleum products. It is currently setting up a 10.5 mmtpa refinery at Vadinar, Gujarat on the West Coast of India. It plans to set up 2500 retail outlets by mid 2006 which will further be increased to 5000 retail outlets by 2008. The company has commissioned over 500 retail outlets across the country.

EOL is a part of the Essar Group, one of India's largest corporate houses, with interests spanning the manufacturing and service sectors - steel, shipping, power, oil and gas, telecom and construction. The Group has an asset base of over Rs. 200000 millions (USD 4.4 billion).

Castrol And Essar Oil In Strategic Tie-Up

December 11, 2004

Essar Oil Limited and Castrol India Limited have announced the signing of an agreement for sale of Castrol lubricants through Esaar Oil Fuel outlets throughout the country. Commenting on the agreement, Mr. Naveen Kshatriya, Managing Director, Castrol India, said, "this is a win win situation for both companies. Whilst Castrol will have access to an additional distribution channel through Essar's fuel forecourts across the country, Essar will be able to offer premium quality international lubricants to its customers. The agreement will be especially beneficial to scooter owners, who hitherto did not have access to Castrol lubricants at petrol forecourts. It will also increase availability of their products along the highways".

Mr. A N Sinha, Managing Director, Essar Oil Limited said, "This agreement will give Essar customers access to Castrol lubricants at Essar outlets with the promise of reliability, right price and good customer service. Essar Retail outlets will be serviced by authorized Castrol distributors. Essar has ambitious growth plans in fuel retailing and they look towards strategic partners like Castrol who can support them in this growth journey."

In a short span of time, Essar has built up strong brand equity and their 200 fuel outlets are fondly referred to as 'Laal Pump' by truckers.

The tie up will use the promotion synergy of both companies, through highway promotion vans, mechanic and fleet owners meets to the mutual benefit of both companies.

Castrol has been in India for over 85 years and is a market leader in the retail automotive lubricants business. Most Castrol brands are market leaders in the segment in which they operate.

Essar Forays Into Wind Power

Signs Licence Agreement with REpower AG, Germany

September 15, 2006

Essar Global's Power business today signed a Licensing Agreement with REpower Systems AG for the design and manufacture of 1.5 MW (and 2 MW) Wind Turbines in India and marketing in South East Asia. The two corporations have agreed to set up a joint venture in the near future which will allow access to 3MW and 5 MW turbines as well other future developments and wider market reach.

Commenting on the occasion, Mr. Anshuman Ruia Director, Essar Power said, "They are happy to be associated with Re-power for their foray into the wind energy business. They are confident that this is the beginning of a long and mutually beneficial relationship. The agreement comes at a time when there is a huge demand for power in India and it also fits in perfectly with their strategy of diversifying into renewable energy sources."

This wind turbine technology is widely accepted for usage Europe for generation of power. REpower's 1.5 megawatt turbine installations in Germany operate with an average availability of approx. 99%. This technology is ideally suited for Indian wind conditions.

Essar proposes to set up the manufacturing plant in a port based location which the Group hopes to finalize soon. The initial investment required to set up the plant is in the region of Rs. 500.000 Millions and this will be financed through internal resources. Essar expects to start commercial production by the middle of next year.

India with approx. 5300 megawatts of installed wind power capacity (as on March 2006) will see additional capacity of 1700 MW -1800MW in the current financial year. The Indian market for wind energy is the largest in Asia and the fourth largest on a global scale. India has wind resources to harvest around 45000 MW of power.

About Essar's power business :

Essar has been in power generation business for the last one decade. It currently operates four power plants with a capacity of over 1000 MW. Essar, with its proven experience of developing power projects is well positioned to implement large sized power projects.

About Essar :

The Essar Group is one of India's largest corporate houses with interests spanning the manufacturing and service sectors - Steel, Shipping, Power, Oil & Gas, Telecom & BPO and Construction. The Group has an asset base of over US $ 6 billion (Rs.270000.000 Millions).

About REpower :

REpower Systems AG is one of the leading manufacturers of onshore and offshore wind turbines. The international engineering company develops, produces and sells wind turbines with outputs ranging from 1.5 to 5 megawatts and rotor diameters of 70 to 126 metres for almost all locations. It also provides a comprehensive service and maintenance range. The high performance, reliable turbines are designed at the REpower development centre in Rendsburg and produced at the sites in Husum (North Frisia) and Trampe (Brandenburg).

Listed on the German stock exchange since March 2002 and with around 700 employees worldwide, the Hamburg-based company relies on its experience in the production and installation of more than 1,400 wind turbines worldwide. REpower is represented in European markets such as France, the United Kingdom, Italy, Portugal and Spain and in the international markets of Japan, China and Australia through its subsidiaries and investments..

Essar Global consolidates its Shipping and Logistic business under ESLL

August 17, 2006

Essar Global Limited (EGL) has investment interests in the Infrastructure sector, Telecommunication & Technology and Industrial Construction and Engineering. The group has its offices in. U.S.A, U.K., Middle East, India, Singapore and China. Essar Global employs over 15,000 people and has an asset base in excess of US $ 6 billion.

EGL announced the restructuring of its businesses in shipping, terminalling and logistics. In order to provide a sharper focus to its business and increase shareholder value, the Company has formed a fully owned subsidiary, Essar Shipping and Logistics Limited (ESLL), registered in Cyprus.

As per the re-organization plan of the shipping business, ESLL will have three operating companies under its umbrella:

1. Essar Shipping Limited. (ESL) - 77% owned by ESLL, Essar Shipping is a leading sea transportation company, with a special focus on transportation solutions for the global energy business. A strong management team of experienced marine professionals steers the company, maintaining intense customer focus, world class operations, an impressive safety record and consistent financial performance. The Company owns a modern fleet of 27 vessels, including VLCCS, tankers and bulk carriers. The Company has long standing relationships with major global and Indian oil companies like Shell, Exxon Mobil, Chevron BP Aramco, Texaco, Bharat Petroleum and Indian Oil Corporation. The Company is ISO 9000:2000 and ISO 140001 certified and has been recognized as the "Safest Indian Shipping Company" by DG Shipping, India in 2004.

2. Essar Logistics Limited (ELL) - Fully owned subsidiary of ESLL will carry out the business of logistics management, transshipment and port services. The Company specialises in the handling, storage distribution and movement of cargo by sea, road and rail.

3. Vadinar Oil Terminal Limited (VOTL) - Fully owned subsidiary of ESLL will focus on ports and terminals. VOTL has set up a 32 million tonne terminal facility in Vadinar, Gujarat, India, which will be operational by the end of September,2006. Vadinar port is an all weather, deep draft port, and will serve major oil refineries and traders in the region.

The reorganization will make ESLL a leading integrated logistics provider for steel mills, oil refineries and thermal power generation companies across the world.

Mr. Sanjay Mehta will assume the responsibility of CEO of Essar Shipping & Logistics Limited. and continue as Managing Director of ESL. Mr. A.R. Ramakrishnan who is currently Chief Operating Officer has been inducted into the Board of ESL as an Executive Director and will be designated CEO.

About Essar Global

Essar Global Limited investments in Infrastructure portfolio comprises of investments in :

Essar Steel Limited : The largest integrated producer of steel in Western India, with a capacity of 4.6 million tonnes per annum, with plans to set up manufacturing facilities in Qatar, Sharjah and Trinidad.

Essar Oil Limited : A leading integrated oil major involved in Exploration & Production, Refining and Retailing of petroleum products.

Essar Power Limited : Power generation capacity close to 1000 MW with plans to increase capacity to 2500 MW and enter transmission and distribution

Essar Shipping and Logistics Limited : Leading sea logistics solutions provider involved in sea transportation, ports and terminalling activities.

Telecommunication & Technology : Investment portfolio comprises of investments in Hutchison Essar provides cellular services in association with Hutchison Whampoa, Hong Kong.

Aegis Communications is an integrated customer solutions provider in BPO and IT.

Industrial Construction and Engineering : Investment portfolio comprises of investment in Essar Construction - one of India's foremost engineering, procurement and construction specialists.

Essar Steel Completes expansion to 4.6 million tones is now the largest producer of Flat Steel in India’s Private Sector

Essar Steel announced today that it had completed the expansion of steel manufacturing capacity at its Hazira Complex in Gujarat, India to 4.6 million tonnes. The expansion project was completed in 18 months with an investment of Rs. 19750.000 Millions Company said that this is the culmination of Essar Steel's strategy to be a low cost, high quality and value added producer for the niche, high end markets in India and abroad.

The expansion makes Essar Steel India's largest producer of flat steel in the private sector, accounting for close to 23% of the country's flat steel capacity. The Company also installed two more modules for HBI/DRI production, increasing total capacity to 5.5 million tonnes per annum. This makes Essar Steel the largest, single location producer of HBI in the world.

It also increases the share of value added products in Essar Steel's portfolio to 75% from the existing 45% and will contribute significantly to reduction in imports of critical special grades of steel meant for sophisticated applications. The Company also said that it expects a quantum jump in exports of its products and this will consolidate its pre-eminent position as India's largest exporter of flat steel.

Mr. Prashant Ruia, Director, Essar Group said, "They are extremely pleased that this capacity expansion will make India an even more potent force in international steel markets. This expansion and modernisation puts Essar Steel in the premium league of high end steel producers. They are privileged to be at the core of India's economic development at a time when the country is being recognized as one of the fastest growing economies in the world."

The expansion entailed adding a new electric arc furnace, a third caster, RH degasser and allied equipment. In order to meet the requirements of the expanded steel capacity, infrastructure facilities have also been enhanced. This includes a captive power plant of 500 MW capacity, increase in capacity of the port to 12 MTPA and allied machinery and equipment workshops.

The Company's R & D centre has also been modernized and expanded and houses state-of-the-art equipment and highly qualified and trained scientists and engineers.

About Essar Steel

Essar Steel is the largest integrated producer of steel in Western India, with a capacity of 4.6 million tonnes per annum. Its seamless integration ensures total control at every stage of manufacture - from iron ore to finished products. It is also India's largest exporter of flat steel products. Essar Steel has manufacturing locations in Hazira, Visakhapatnam and Bailadilla in India.

About Essar

The Essar Group is one of India's largest corporate houses, with interests spanning the core and infrastructure sectors of industry - steel, oil & gas, power, telecom & BPO, shipping & logistics and construction. It has an asset base in excess of US $ 6 billion (Rs. 270000.000 Millions). It employs 15,000 people and has offices in over 50 locations world-wide

CMT REPORT [Corruption, Money laundering & Terrorism]

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

1] INFORMATION ON DESIGNATED PARTY

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

2] Court Declaration :

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

3] Asset Declaration :

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

4] Record on Financial Crime :

Charges or conviction registered against subject: None

5] Records on Violation of Anti-Corruption Laws :

Charges or investigation registered against subject: None

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

Charges or investigation registered against subject: None

7] Criminal Records

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

8] Affiliation with Government :

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

9] Compensation Package :

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

10] Press Report :

No press reports / filings exists on the subject.

CORPORATE GOVERNANCE

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

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

CONTRAVENTION

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

FOREIGN EXCHANGE RATES

Currency	Unit	Indian Rupees
US Dollar	1	Rs.44.06
UK Pound	1	Rs.86.34
Euro	1	Rs. 57.46

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	5
PAID-UP CAPITAL	1~10	5
OPERATING SCALE	1~10	5
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	5
--PROFITABILIRY	1~10	5
--LIQUIDITY	1~10	5
--LEVERAGE	1~10	5
--RESERVES	1~10	5
--CREDIT LINES	1~10	5
--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		45

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		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

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