MIRA INFORM REPORT

Report Date :

15.02.2007

IDENTIFICATION DETAILS

Name :	USHA MARTIN LIMITED
Formerly Known As :	USHA BELTRON LIMITED
Registered Office :	Mangal Kalash, 2 A, Shakespeare Sarani, Kolkata – 700 071, West Bengal
Country :	India
Financials (as on) :	31.03.2006
Date of Incorporation :	26.05.1986
Com. Reg. No.:	21-91621
CIN No.: [Company Identification No.]	U99999WB2000PTC91621
TAN No.: [Tax Deduction & Collection Account No.]	CALU01301G
Legal Form :	Public limited liability company. The company’s shares are listed on the Stock Exchanges
Line of Business :	Manufacturer of jelly filled telephone cables, wire and wire ropes and steel. Its operations are spread cover Ranchi, Jamshedpur, Agra and Bangalore

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 23000000
Status :	Good
Payment Behaviour :	Regular
Litigation :	Clear
Comments :	Subject is a well-established and diversified company having satisfactory track. Available information indicates high financial responsibility of the company. Their trade relations are fair. Financial position of the company is good. Business is active. The company can be considered good for any normal business dealings. It can be regarded as a promising business partner in a long-run

LOCATIONS

Registered Office :		Mangal Kalash, 2 A, Shakespeare Sarani, Kolkata – 700 071, West Bengal, India
Tel. No.:		91-33-2282 8540 / 41 / 6737 / 8545
Fax No.:		91-33-2282 1660 / 1971
E-Mail :		gdsaini@ushamartin.com
Website :		http://www.ushamartin.india.com
Corporate Office :		2A, Shakespeare Sarani, Kolkata – 700 072, West Bengal, India
Tel. No.:		91-33-2282 8540 / 8541 / 8545 / 2248 3677
Fax No.:		91-33-2282 3866 / 2282 6498
E-Mail :		gdsaini@ushamartin.co.in r.jhawar@ubest.sprintrpg.ems.net.in
Website :		http://www.ushamartin.india.com
Administrative Office :		Usha Alloys and Steel Division, Post Box 147, Jamshedpur – 831001, India
Tel No.:	91-657-2386052 / 2386070
Factory :		v Wire and Wire Ropes \ Cable \ Usha Ismal Division v Tatisilwai, Ranchi – 835 103, Bihar, India v Steel Division v Adityapur, Jamshedpur – 831 001, Bihar, India v Rolling Mill Division v 12/16, Nawalganj, Agra – 282 006, Uttar Pradesh, India v Machinery Division v Main Road, Whitefield, Bangalore – 560 066, Karnataka, India

DIRECTORS

Name :	Mr. B. K. Jhawar
Designation :	Chairman
Name :	Brij K Jhawar
Designation :	Director
Name :	Mr. P. Jhawar
Designation :	Vice Chairman
Name :	Mr. R. Jhawar
Designation :	Managing Director
Name :	Dr. P. Bhattacharya
Designation :	Joint Managing Director
Name :	Mr. U. V. Rao
Designation :	Director
Name :	Mr. A. K. Choudhri
Designation :	Director
Name :	Mr. M J Subbaiah
Designation :	Director (Nominee of ICICI)
Name :	Mr. M J Subbaiah
Designation :	Director - Nominee (ICICI)
Name :	Mr. J K Roy
Designation :	Director - Nominee (IDBI)

KEY EXECUTIVES

Name :	Mr. A K Somani
Designation :	Company Secretary

KEY EXECUTIVES

Name	Mr. B K Jhawar
Designation	Chairman
Age	68 years
Qualification	Graduate
Date of Joining	Since Incorporation
Previous Employment	ICICI Limited - Director
Name	Dr. P. Bhattacharya
Designation	Executive Director
Age	53 years
Qualification	B.E.(Mech.), M. Tech. (Design Engg.), PHD (Solid Mechanics)
Experience	32 years
Date of Joining	02.02.1998
Previous Employment	Essar Steels Limited – Chief Operations Officer
Name	Rajeev Jhawar
Designation	Managing Director
Age	38 years
Qualification	B.Com. (Hons)
Experience	17 years
Date of Joining	01.10.1997
Previous Employment	Usha Martin Industries Limited – Joint Managing Director

MAJOR SHAREHOLDERS

Names of Shareholders	No. of Shares	Percentage of Holding
PROMOTERS HOLDINGS
Indian Promoters	5729311	21.69
NON - PROMOTERS HOLDINGS
Institutional Investors
Mutual Funds and UTI	2226818	8.43
Banks Fin. Inst. and Insurance	2459172	9.31
FII’s	545893	2.07
Other Investors
Private Corporate Bodies	3598070	13.62
NRI’s/OCB’s/Foreign Others	6489139	24.57
General Public	5365998	20.31
TOTAL	26414401	100.00

BUSINESS DETAILS

Line of Business :

Manufacturer of jelly filled telephone cables, wire and wire ropes and steel. Its operation are spread cover Ranchi, Jamshedpur, Agra and Bangalore

PRODUCTION STATUS

Particulars	Unit	Installed Capacity	Actual Production
Wire Drawing And Allied Machines
Wire Machines	Nos	50	25
Wire Rods	MT	228000	290035
Wire Ropes, Strands Including Locked Coil
Wire Ropes	MT	55000	63716
Wire	MT	41700	43998
Pig Iron /Hot Metal	MT	200000	195514
Billets	MT	360000	296192
Sponge Iron	MT	100000	46851
Hydralic Machines Including Presses. Proof Loading Machines Accessories	Pcs.	100	1
Blocks, Dies And Accessories		400	36
Ferrules, Slings, Fittings And Accessories Equipment And Materials For Prestressed Concrete System And Bargrip Seamless	Pcs.	700000	112637
Tubes For Splicing x	Pcs.	460000	1255672
Concrete System And Bargrip Seamless	Pcs.	--	43
Jelly Filled
Telecommunication
Cables	LCKM	64	0.02
Bright Bar	MT	12000	6519
Conveyor Cord	MT	840	787
House Wire	KM	1680	4

GENERAL INFORMATION

Suppliers :	Ø Eastern Steels Ø Acme Industries Ø Tatanagar Refractory and Minerals Company Limited Ø Sarvesh Refractory P Limited Ø Hytek Industries Kaypee Enterprises Ø Kaypee Enterprises Ø Bihar Precision Machine Tools Manufacturing Company Ø Metropoliton Casting and Engineering Works Ø Madhuraj Imprints Private Limited
No. of Employees :	8000
Bankers :	v State Bank of India v Canara Bank, Kolkata, West Bengal, India v ICICI Bank Limited v IndusInd Bank Limited v Allahabad Bank, Kolkata, West Bengal, India v The Hongkong & Shanghai Banking Corporation Limited, Kolkata, West Bengal, India v HDFC Bank Limited v BNP Paribas v American Express Bank Limited v The Bank of Tokyo Limited, Kolkata, West Bengal, India
Facilities :	--

Banking Relations :	Satisfactory
Auditors :	v Price Waterhouse Chartered Accountants Plot No. Y-14, Block EP, Sector V, Salt Lake Electronic Complex, Bidhan Nagar, Kolkata – 700 091, West Bengal, India
Group Company :	Ø Usha Martin international Limited Ø Usha Martin American Inc. Ø Usha Martin UK Limited Ø Usha Martin Scandanavia A/S Ø UMICOR Africa (Pty.) Limited Ø European Management and Marine Corporation Limited Ø EMM Caspian Limited Ø E.M.M Kazakhstan Limited Ø UMICOR Ropes (Pty.) Limited Ø Usha Siam Steel Industries Public Company Limited Ø Brunton Shaw UK Limited Ø Usha Martin Singapore Pte. Limited Ø Burntan Wolf Wire Ropes FZCO. Ø UM Cable Limited Ø Usha Martin Holdings Limited Ø Gustav Wolf Speciality Cords Limited
Membership :	Confederation of Indian Industry

CAPITAL STRUCTURE

Authorised Capital :

No. of Shares	Type	Value	Amount
100,000,000	Equity Shares	Rs. 5/- each	Rs. 500.000 millions
10,000,000	Redeemable Cumulative Preference Shares	Rs. 50/- each	Rs. 500.000 millions

Issued, Subscribed & Paid-up Capital :

No. of Shares	Type	Value	Amount
44,380,000	Equity Shares	Rs. 5/- each	Rs. 221.900 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		221.900	185.801	185.801
3] Reserves & Surplus		5605.100	4321.939	4095.823
NETWORTH		5827.000	4507.740	4281.624
LOAN FUNDS
1] Secured Loans		6717.700	7661.952	7755.220
2] Unsecured Loans		158.400	597.349	1016.683
TOTAL BORROWING		6876.100	8259.301	8771.903
DEFERRED TAX LIABILITIES		0.000	1076.817	1021.595
TOTAL		12703.100	13843.858	14075.122
APPLICATION OF FUNDS
FIXED ASSETS [Net Block]		8847.200	8501.988	8134.165
Capital work-in-progress		695.600	435.770	850.106
INVESTMENT		1525.700	1395.403	1408.353
DEFERREX TAX ASSETS		0.000	0.000	0.000
CURRENT ASSETS, LOANS & ADVANCES
	Inventories	2621.700	2840.534	2283.107
	Sundry Debtors	1982.500	2513.970	1785.495
	Cash & Bank Balances	517.500	389.655	281.209
	Other Current Assets	0.000	195.738	193.862
	Loans & Advances	2036.000	2100.403	1935.288
Total Current Assets		7157.700	8040.300	6478.961
Less : CURRENT LIABILITIES & PROVISIONS
	Current Liabilities	5354.900	4413.061	2766.830
	Provisions	210.200	176.380	116.816
Total Current Liabilities		5565.100	4589.441	2883.646
Net Current Assets		1592.600	3450.859	3595.315
MISCELLANEOUS EXPENSES		42.000	59.838	87.183
TOTAL		12703.100	13843.858	14075.122

PROFIT & LOSS ACCOUNT

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
Sales Turnover [including other income]	14183.100	11908.518	7970.745
Profit/(Loss) Before Tax	1007.400	582.759	232.700
Provision for Taxation	357.700	174.025	77.460
Profit/(Loss) After Tax	649.700	408.734	155.240
Import Value	NA	2.137	0.700
Total Expenditure	11632.800	11325.759	7738.045

QUARTERLY RESULTS

PARTICULARS	30.06.2006 [1^st Qtr.]	30.09.2006 [2^nd Qtr.]	31.12.2006 [3^rd Qtr.]
Sales Turnover	3039.000	3514.500	3513.900
Other Income	92.400	19.900	12.200
Total Income	3131.400	3534.400	3526.100
Total Expenditure	2511.700	2855.100	2758.600
Operating Profit	619.700	679.300	767.500
Interest	170.200	180.200	185.800
Gross Profit	449.500	499.100	581.700
Depreciation	194.200	187.400	190.600
Tax	43.000	57.500	79.000
Reported PAT	203.300	237.200	284.100

Notes

200606 Quarter 1

EPS is Basic 1. During the quarter under report the Company has invested in 24,970 Equity Shares of Rs.10/- each in CCL Usha Martin Limited, as a joint venture company, 600,000 Equity Shares of Rs.10/- each in Dove Airlines Private Stressing System invited, a subsidiary of the Company and has made an advance of Rs. 8 millions against application money for subscribing to 8,000,000 Equity Shares of Rs.101- each in Pengg Usha Martin Wires Private Limited, a joint venture company. 2. During the quarter under review the Mini Blast Furnace and Captive Power Plants of the Steel Division under went planned shutdown and completed major overhauling work, which adversely impacted the performance of the said Division. 3. Other Income for the quarter under review includes profit on sale of land of Rs. 90.100 millions 4. The Accounting standard (As-15) (Revised) on 'Employee Benefits' issued by the Institute of Chartered Accountants of India has become applicable with effect from 1^st April, 2006 and the Company is in the process of ascertaining impact on certain accrued employee costs up to the quarter ended 30th June, 2006 in terms of the said AS. This will be accounted for on completion of aforesaid process. 5. Figures for the previous periods have been regrouped/rearranged wherever necessary. 6. Details of number of investor complaints during the quarter ended 30th June, 2006 : beginning - Nil, Received - 9 , . Attended to/disposed of - 9 and pending - Nil. 7. The above results, after review by the Audit Committee, have been approved and taken on record by the Board of Directors at its meeting held on 31st July, 2006. 8. The Auditors of the Company have carried out a 'Limited Review' of the aforesaid financial results for the quarter ended 30th June, 2006 on Standalone basis in terms of Clause 41 of the Listing Agreement with Stock Exchanges.

200609 Quarter 2

Expenditure Includes (Increase)/Decrease in stock in Trade Rs 35.30 million Consumption of Raw Material Rs 1491.90 million Purchase of General Merchandise Rs 2.90 million Power and Fuel Rs 365.00 million Consumption of stores and Spare parts Rs 264.60 million Staff Cost Rs 204.00 million Other expenditure Rs 491.40 million Tax Includes Provision for Current Tax Rs 55.00 million Deferred Tax Rs 17.00 million Fringe Benefit Tax Rs 2.50 million 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 11 Complaints disposed off during the quarter 11 Complaints unresolved at the end of the quarter Nil 1. During the quarter under review the Company has invested in 2,30,000 Equity share of Rs 10/- each in CCL Usha Martin Stressing System Ltd and has made an advance of Rs 8.00 million against application money for subscribing to 8,000,000 equity shares of Rs 10/- each in Pengg Usha Martin Wires Private Limited the Joint Venture Companies. 2. Figures for the Previous periods have been regrouped / rearranged wherever necessary. 3. The above results after review by the Audit Committee have been approved and taken on record by the Board of Directors at its meeting held on October 25, 2006. 4. The Auditors of the Company have carried out a Limited Review of the aforesaid financial result for the quarter ended September 30, 2006 on standalone basis in term of Clause 41 of the Listing Agreements with Stock Exchanges.

200612 Quarter 3

Expenditure Includes (Increase)/Decrease in stock in Trade Rs (236.20) million Consumption of Raw Material Rs 1496.60 million Power and Fuel Rs 363.90 million Consumption of stores and Spare parts Rs 259.80 million Staff Cost Rs 206.50 million Other expenditure Rs 668.00 million Tax Includes Provision for Current Tax Rs 76.00 million Deferred Tax Rs 28.00 million Fringe Benefit Tax Rs 3.00 million EPS is Basic Status of Investor Complaints for the quarter ended December 31, 2006 Complaints Pending at the beginning of the quarter Nil Complaints Received during the quarter 10 Complaints disposed off during the quarter 10 Complaints unresolved at the end of the quarter Nil 1. During the quarter under review the Company has received allotment of 800,000 equity shares of Rs 10/- each in Pengg Usha Martin Private Limited a joint venture company against advance made by it in earlier quarter and has made fresh advance of Rs 8.00 million for subscribing to 800,000 Equity shares of Rs 10/- each in the said joint venture Company. 2. On December 29, 2006 the Company has allotted 2,900,000 Equity shares of Rs 5/- each to certain companies in the promoter group upon conversion of Convertible Equity Warrants issued in earlier year on preferential basis, against receipt of balance 90% of the consideration amount of Rs 153/- per warrant. The Shares allotted rank pari passu in all respect with the existing equity shares. 3. Pursuant to a Business Transfer Agreement the Company has acquired the business of U-Tor Construction Steel Limited’s Rolling Unit at Agra along with specified Assets & Liabilities for a consideration of Rs 75.30 million with effect from December 01, 2006 and its performance part of steel segment. 4. Figures for the Previous periods have been regrouped / rearranged wherever necessary. 5. The above results after review by the Audit Committee have been approved and taken on record by the Board of Directors at its meeting held on January 31, 2007. 6. The Auditors of the Company have carried out a Limited Review of the aforesaid financial result for the quarter ended December 31, 2006 on standalone basis in term of Clause 41 of the Listing Agreements with Stock Exchanges.

KEY RATIOS

PARTICULARS	31.03.2006	31.03.2005	31.03.2004
-Equity Ratio	1.46	1.94	2.03
Long Term Debt-Equity Ratio	1.26	1.58	1.70
Current Ratio	1.14	1.13	1.19
TURNOVER RATIOS
Fixed Assets	0.93	0.95	0.67
Inventory	4.89	4.89	4.15
Debtors	5.95	5.83	4.80
Interest Cover Ratio	2.22	1.69	1.18
Operating Profit Margin(%)	19.39	16.96	21.70
Profit Before Interest And Tax Margin(%)	13.70	11.35	13.79
Cash Profit Margin(%)	10.55	8.87	9.32
Adjusted Net Profit Margin(%)	4.86	3.26	1.40
Return On Capital Employed(%)	14.44	11.08	9.20
Return On Net Worth(%)	12.57	9.30	2.81

STOCK PRICES

Face Value	Rs. 5/-
High	Rs. 193.75/-
Low	Rs. 175.40/-

LOCAL AGENCY FURTHER INFORMATION

FIXED ASSETS

Ø Land and Site Development

Ø Freehold

Ø Leasehold

Ø Buildings

Ø Plans and Machinery

Ø Electrical Installation

Ø Water Treatment

Ø Office Equipment

Ø Vehicles

Ø Computer Software’s

ISO 9001 Certification:

The company has received ISO 9001 certification

HISTORY

Incorporated in 1986, Usha Beltron was jointly promoted by Usha Martin Industries and the Bihar State Electronic Development Corporation. The company manufactures jelly-filled cables in technical collaboration with AEG Kabel, Germany. The company has developed PCM system cables used to transmit digital signals. It has developed foam-skin type cables for the first time in India. The company also provides software application services. Later in May 2001 the two subsidiares viz Usha Martin Telecom Holding and UBL Industries were merged with the company. Subsequent to this merger, the company name was changed to Usha Martin Ltd in May, 2003. 

The manufacturing operation of the company cover Ranchi, Jamshedpur, Agra & Bangalore, also distribution centre are spread across India, Europe, Africa & USA. 

The company is among the largest telecom cables manufacturer in India, with an annual capacity of 55 LCKM - rising to 64 LCKM recently. The company's other operation includes a specialized machinery division catering to the wire, ropes and cable industry & also has a rolling mill in Agra & division to make mechanical splicing equipment and fitting for wire ropes in Ranchi. 

Usha Beltron is the fifth largest manufacturer of wire ropes in the world. The company also integrated from iron ore to ropes; its intermediate production capacities are supported by technologically advanced routes of production and a high capacity utilization, helping to deliver excellent quality and productivity in the process. 

Among the other industrial interest managed by the promoters of Usha Beltron are Usha Telekom - a cellular service company in collaboration with Telekom Malaysia. Usha Breco - designs, manufacturer and operates ropeways & Summit Usha Martin Finance - Joint Venture with Sumitomo Corporation of Japan. 

During the year 2000, Usha Beltron demerged its software division into a separate company - Usha Martin Infotech. The company also acquired the wire rope business of Brunton Shaw, UK, a division of Carclo Plc of the UK in an all cash deal for around Rs 85 millions.  

The company entered into financial tie-up with IFC, Washington and DEG, Germany for funding of new projects at Jamdshedpur and Ranchi which are under implementation stage. IFC has awarded loan of USD 21 Million and also has acquired 5264727 equity shares at a premium of Rs.28 per share, and DEG-Deutsche Investitions-und Entwicklungsgesellschaft mbH-Germany,is funding the project by way of loan Euro 10 Million and in addition it has also invested Rs.176.4 Millions consisting 5345455 equity shares at a premium of Rs.28 per share. 

The company has executed a term sheet during January 2005 with JCT Ltd for acquiring JCT's Steel Division located at Hoshiarpur. JCT's steel division is engaged in the business of manufacture and sale of steel wire rope and wire products. The acquisition is likely to be completed by March 2005.

DIVIDEND

The Board of Directors recommends a dividend at the rate of 55% per cent on the equity shares of the Company for the year ended 31st March 2006 amounting to Rs.139 Million, including dividend tax, surcharge and cess @14.025%. 

REVIEW OF OPERATIONS

During the year under report the Company achieved net turnover of Rs.12352 Million. as against Rs.11,899 Million. in the previous year, higher by 3.8%. The level of activity before adjusting inter divisional sales was Rs.17054 Million. registering a growth of 10.8% over the previous year. 

The Company has achieved profit before tax of Rs. 1007 Million. as against Rs. 583 Million., higher by 72.8% and net profit of Rs. 650 Million., as against Rs. 409 Million. in the previous year, higher - by 58.9%. 

The collective turnover of the subsidiaries (without inter company/division sales) stood at Rs.8526 Million. 

The consolidated net turnover (net of excise duty and inter company/division sales) increased 16.2% to Rs. 18020 Million. and consolidated profit before tax moved up by 78.9% to Rs. 1265 Million. 

STEEL BUSINESS

Steel business achieved a turnover (net of excise duty) of Rs.9012 Million in the year under review as against Rs.9067 Million in the previous year. The gross profit margin has, however, increased to 21.3% during the year under report compared to 18.9% in the previous year. 

During the year under report, the Company commenced iron ore mining activities in State of Jharkhand. The Railway Siding, 40 TPH Boiler and 3rd Laddle Furnace were put to commercial use. The benefits of these would be available in the coming years. 

Wire Ropes & Speciality Products Business

The Company achieved a turnover (net of excise duty) of Rs.6,496 Million. in the business of Wire Ropes & Speciality Products in the year under review against Rs.5,289 Million in the previous year, registering a growth of 22.8%. Gross profit margin was 13.4% against 13.3% in the previous year. 

During the year, the Company acquired wire and-wire rope division of JCT Limited at Village Chhohal, District Hoshiarpur in State of Punjab. This division, named as Wire & Wire Rope Division [North], achieved a net turnover of Rs.1053 Million. since it commenced operations on 1st June, 2005. 

SUBSIDIARIES: 

Usha Martin Americas Inc., Brunton Wolf Wire Ropes FZCO and UMICOR Africa Pty Limited, which were subsidiaries of Usha Martin International Limited [UMIL], a wholly owned subsidiary of the Company, have become direct subsidiaries of the Company with effect from 1st October, 2005. At the same time, Brunton Shaw UK Limited (BSUK); a wholly owned subsidiary of the Company, was made a wholly owned subsidiary of UMIL, and business of BSUK has been transferred to UMUK, another subsidiary of UMIL. These changes have been done to ensure greater focus on the performance and growth of the businesses in the respective geographical regions. 

The Company is setting up wire rope manufacturing facility in the United States of America under Brunton Shaw Americas Inc., a new subsidiary company jointly promoted by the Company along with UMIL. This company is expected to commence production in the financial year 2006-07. 

With the approval of the shareholders in the court convened extra ordinary general meeting held on 1^st March, 2006, and Hon'ble High Court of-Kolkata, Usha Martin Holdings Limited, a wholly owned subsidiary of the Company, has been merged with the Company with effect from 1^st April, 2005. The annual accounts of the Company have been prepared accordingly. 

The Statement required under Section 212 of the Companies Act, 1956 in respect of subsidiaries of the Company is annexed to this Report. The Company has, vide letter No. 47/98/2006-CL-III dated April 3, 2006, received approval from Ministry of Company Affairs, Government of India for exemption from annexing the accounts and other documents pertaining to the subsidiaries, under Section 212(8) of the Companies Act, 1956. 

U M Cables Limited, the only Indian unlisted subsidiary company, is not a material subsidiary (in terms of Clause 49 of the Listing Agreement) requiring appointment of an independent director of the Company, as director of this Company. 

RAISING OF CAPITAL: 

During the year under report, the Company has successfully raised US $25 Million by issue of 7,223,763 Global Depository Receipts [GDRs], each priced at Rs. 156 and representing 1 equity share of Rs.5/- of the Company. The GDRs have been listed at Luxembourg Stock Exchange along with GDRs outstanding out of earlier issues. 

With the approval of the shareholders in the Extra Ordinary General Meeting held on 28th September, 2005, the Company has also issued 5,800,000 convertible equity warrants to promoter group companies, as per prevailing SEBI guidelines. The warrants, priced at Rs.153/- each, were subscribed with an advance payment of 10% and are convertible into equal number of equity shares of Rs.5 each, in phases, by 9th April, 2007 at the option of warrant holders. 

The funds raised as above, are proposed to be utilized for expansion of steel manufacturing capacity and wire ropes and speciality products business, for mining activities, meet needs for additional working capital and/or general corporate purposes. 

The Directors place on record their appreciation for confidence reposed by the investors in the Company and state that the issue proceeds are being utilized for the declared purposes. 

CORPORATE GOVERNANCE

The Company recognizes the importance of good Corporate Governance as step for building stakeholders' confidence, improving investor protection and enhancing long-term enterprise value. A detailed report on Corporate Governance is annexed. 

The Company has implemented revised Clause 49 of the Listing Agreement from 1st January, 2006. 

During, the year, the practice has been introduced for Senier Management personnel to make disclosures to the Board of Directors relating to any material financial and commercial transactions where they have any personal interest, with a potential conflict with the interest of the Company at large. 

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. 44.09
UK Pound	1	Rs. 86.59
Euro	1	Rs. 57.92

SCORE & RATING EXPLANATIONS

SCORE FACTORS	RANGE	POINTS
HISTORY	1~10	7
PAID-UP CAPITAL	1~10	7
OPERATING SCALE	1~10	7
FINANCIAL CONDITION
--BUSINESS SCALE	1~10	7
--PROFITABILIRY	1~10	7
--LIQUIDITY	1~10	7
--LEVERAGE	1~10	7
--RESERVES	1~10	7
--CREDIT LINES	1~10	7
--MARGINS	-5~5	--
DEMERIT POINTS
--BANK CHARGES	YES/NO	YES
--LITIGATION	YES/NO	NO
--OTHER ADVERSE INFORMATION	YES/NO	NO
MERIT POINTS
--SOLE DISTRIBUTORSHIP	YES/NO	NO
--EXPORT ACTIVITIES	YES/NO	YES
--AFFILIATION	YES/NO	YES
--LISTED	YES/NO	YES
--OTHER MERIT FACTORS	YES/NO	YES
TOTAL		56

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